It didn’t seem like the best time for Lisa Sachs to start her own business. It was the early 1990s and the recession that would ultimately cost President George H.W. Bush his job had taken hold of the U.S. economy.
Sachs didn’t see it that way, however. In her eyes, this was a great time to start a business.
“That was an opportunity for me because the company I was working for went out of business,” Sachs says. “The clients I was servicing bought me out and wanted to know what I was going to do about it. So that became an opportunity to start my own business.”
And so Construction Controls Group Inc. was born. As a registered architect and certified construction manager, Sachs launched her business and things began to take off. But soon, she was faced with another challenge. The business was growing too fast.
“What I quickly learned was when you grow quickly, which started to occur in the late ’90s and early 2000s, in order to sustain that growth, you have to continue to grow and that’s another challenge,” Sachs says. “I needed to either seek a partnership or consider an acquisition or merger.”
Anyone who has built a business of his or her own has a high level of confidence in the ability to make things happen. But the best leader is rarely the one with the biggest ego.
“Servicing clients was what I could do very well,” Sachs says. “But sales and marketing was going to be my downfall downstream. Knowing in the back of my mind what that weakness was, I went in with a very strong opinion of either a strong partner that would have that strength or a strong firm that would have that capability. I knew if I didn’t do something, I was going to be in worse shape. But it’s still a tough decision.”
Think before you jump
As you begin searching for a partner to either merge or sell your business, you need to make sure you’re clear in your own mind as to why you’re taking this step.
“If you’re doing it just for the money, it’s not going to be successful,” Sachs says. “Maybe it’s successful for you, but it’s not successful for the team you’re leaving behind. You have to stay involved and have skin in the game to really make a transition successful.”
When Sachs began searching for a partner for her business, she set some clear parameters to guide the process.
“You need to figure out what company is the right fit for your organization, your vision and your culture,” Sachs says. “I’ve seen companies get swallowed up by larger firms and they lose themselves.”
Sachs was proud of what she had built at CCG, and she didn’t want to just throw all that away. But she recognized that it would be useful to have a third party that could help steer her toward a partner that matched her desires.
“Don’t go after something like this on your own,” Sachs says. “Get a consultant. It’s very important to have a third party that knows how to do the research and investigate what types of firms to go after. More importantly, in the negotiations, they know how to negotiate on your behalf better than you could on your own.”
The consultant Sachs hired gave her insight on marketing her company and the kind of information that potential partners would want to know before making a deal. A consultant can provide a lot of support, but they can’t make the final decision for you.
“You definitely have to trust your instincts and read people,” Sachs says. “If you’re not just selling and jumping ship and you’re going to stay involved in the business and sign an agreement for a period of time, it’s a marriage. You want to make sure you like who you are getting in bed with. You have to trust them, but you also want to like them.”
Sachs and her team built a list that grew to 20 potential partners and was eventually whittled down to four to six firms. But one of the names that had always been high on the list for Sachs was Finlay Cumming and Cumming Corp.
“I had known Finlay Cumming for many years before that,” Sachs says. “I knew what he was made of, I knew his culture and beliefs, and I really felt a connection to him.”
Sachs acknowledges that doing business with friends often isn’t a good idea. But in this case, the relationship between Sachs and Cumming was professional.
“I never had worked with him or for him,” Sachs says. “If we had worked closely, it’s like going into business with family. There is always a danger that you have expectations and once you work with someone, you’ll be sorely disappointed.”
Lead with integrity
As negotiations moved along between Sachs and Cumming, she wanted to make sure her people were not left in the dark about what was going on. She couldn’t tell them exactly what was happening, but she didn’t want to mislead them either.
“What we did was we explained we were doing an internal audit process, which was the truth,” Sachs says. “Never lie. So that worked out very well. We also had a Christmas party that December, and I announced that there were some exciting new changes ahead in the coming year. I didn’t expand on what that would be, but I wanted to give them a heads-up that something was in the works.”
When the deal was finalized in January 2008, Sachs immediately set up site visits to her company’s two locations in Los Angeles and Orange County.
“We made a breakfast, a lunch and an evening cocktail time,” Sachs says. “We gave people the option of going to any one of those three, depending on where they lived. We presented what was going on and made sure to have the leadership of the new organization as well as myself at these meetings.”
As much as you talk about the benefits of a merger or the great things that can happen now that your company has been acquired, it’s going to create some nervous moments for your employees. The best thing you can do is keep the best interests of your people in mind and find ways during the negotiating process to make the transition as seamless as possible.
“Cumming was very open to letting us operate the way we had been operating for quite some time and with very little interference,” Sachs says. “The biggest impact was the benefit changes because there are obviously bigger plans when you’re part of a larger organization. That was the part where we had to show you were getting apples to apples. It took a lot of work to structure that for people so they understood. You have to make people feel whole during this process.”
Set the right tone
In the interest of making the transition easier, Sachs and her group kept the CCG name for a while after the deal had been completed.
“We gradually transitioned it to CCG, a division of Cumming Group and then within two years, I realized we just needed to be called Cumming,” says Sachs, who is now a managing principal at the $50 million company, which has about 250 employees. “It’s better not to confuse people and to move forward to complete the transition.”
That doesn’t mean it was easy when Sachs saw the legacy she had built begin to fade away.
“I’ll never forget my first meeting with the marketing director,” Sachs says. “It was, ‘OK, now we’re going to change your letterhead and everything else to Cumming.’ It was like a slap in the face. I don’t think of myself as a person with an ego, so I can imagine a person with a huge ego and how that would have hit them. It really hit me hard and took two years before I was really willing to let go of the name.”
When you’re becoming part of another organization, you have to find your place initially to become part of the new team without forgetting certain things that you think are good principles with which to run a business.
“If you bring up every little thing that bothers you and you’re a negative person, it’s like the little boy who cried wolf,” Sachs says. “They’ll start to ignore you and not pay attention. If you bring some valuable ideas to the table and you prioritize what’s really important and approach it in a positive, constructive manner, you can be very successful.”
Sachs is pleased with the organization she and the team at Cumming Corp. have built together and has high hopes for the future.
“Bring value and you will be respected and appreciated,” Sachs says. “Most of all, have a sense of humor and never take yourself too seriously. That goes a long way toward gaining acceptance.” •
Takeaways
- Think before you act.
- Remember your team.
- Pick your battles.
The Sachs File
Name: Lisa Sachs
Title: Managing principal
Company: Cumming Corp.
Born: Melrose, Mass.
Education: Rhode Island School of Design
How did your life change at 10 years of age? My mother at a very young age had breast cancer and was basically told she had four years to live. So my father sold his business, sold the house in a day and because she knew some French, we decided to go to France. As it turned out, my mother only died a few years ago, so there’s a good story to this. It brought our family very close together to go on a Robinson Caruso adventure.
What was it like going through that at that age? It definitely influences you as an adult having to learn to cope with new situations, languages and cultures at an early age. It probably helped me be the strong individual I am and someone who doesn’t hold a chip on their shoulder because I know how to communicate with people and have empathy for the differences. So what could be a negative turned out to be a positive. Some people in those changing situations don’t adapt well. But being a positive person, I think I was able to benefit from it.
What one person would you like to have met? Golda Meir. When I was in Israel, I believe she was the prime minister or maybe it was before I was there. She was such a strong woman who had so much integrity and had a family and did everything she set out to do, but was so important and relevant in history. What an amazing experience that would be to sit down and talk to her.
How to reach: Cumming Corp., (888) 676-3211 or www.ccorpusa.com
