Michael Schwartz will tell you that strategic acquisitions are about people.
Sure, the deal may begin with a focus on the business itself, as it did when MetLife’s vice president of dental product management began eyeing SafeGuard Health Enterprises Inc.
MetLife was looking to couple its preferred provider organization products with SafeGuard’s dental health maintenance organization ones, providing customers dual options.
But Schwartz, who became SafeGuard’s president, knew even a strategically sound acquisition would fizzle if the deal didn’t have a foundation bigger than the basics.
“It tends to start with the financial implications of the business,” says Schwartz, who maintains his roles at both companies now. “Sometimes you’ve got to think broadly about this. It’s not just the financials: It’s the people. It’s the infrastructure. It’s the process.”
“Such an important part is assessing how the organizations are going to fit together. At the end of the day, it’s people and it’s the leadership. The underlying components … are really the folks that are going to make this successful.”
Schwartz looked beyond the books of business, focusing on setting expectations, understanding the culture and using regular communications to make the integration a success.
“You try to build trust and get feedback and have people engaged and bring the cultures together,” Schwartz says. “You do an enormous amount of that up until your close, and then you do more. Think about that as an ongoing commitment to the success of a transaction.”
Through the process, SafeGuard became a successful MetLife company with 2008 revenue in excess in $200 million. Here’s how Schwartz’s focus on people smoothed the acquisition.