Break in your new team
Suriyakumar knows that American Reprographics is the biggest
in its industry, but that’s no reason to be a bully.
“We have to bring about best practices and things which are
required by a larger company, but it can be done in a way that we
are not disrespecting the local owners, in a way that lets them
keep their pride and their dignity,” he says.
Suriyakumar wants to keep the entrepreneurial spirit alive by
taking a hands-off approach. While you want to begin to implement your company’s procedures to better the acquisition, the first
goal should be easing minds to keep the acquired company’s energy alive.
“We never change a president’s job title,” he says. “The key element of that is for us to understand that we’re not just buying a
company because we have the money but to win the hearts and
minds of the people over in the company we acquired. Failing to do so would actually put our investment in jeopardy.”
When you’re acquiring a smaller company, you have to quickly let
people know that being part of a larger organization won’t kill the
entrepreneurial spirit.
“The important element is right at the beginning of the acquisition for us to be able to protect ourselves as a company to let them
know you are actually going to improve the company,” he says.
“When people get acquired, their biggest worry is that their title
will change, their jobs will be cut off and somebody is going to
bring improvement by cutting cost. Our strategy has been, whenever we acquire a company, we want to look to grow the company. Our first objective is to say, ‘OK, how do you take this company from this level to the next level in terms of profitability?’”
The more clearly you can lay out your plans for the company at
the beginning — showing the ways you want to improve the company without sharp cuts — the easier it will be to win people over.
With a very successful track record, for example, American
Reprographics is able to show new people times that it has
improved things like accounting and purchasing without personnel changes to sharpen a company. If you can show potential success because of your involvement, you can actually drive away
concern.
“We are able to tell them, ‘Our company is an open book. Look at
the numbers we have; look at so many of your colleagues that have
gone from 8 to 10 percent (profit margins) to 15, 16, 18 percent,’”
he says.
“You say that to somebody who has been long enough in the
industry and you really get them fired up, they say, ‘Heck, if Tom
can do it and Peter can do it and Martha can do it, I can do it, too.’”
