After an acquisition, the acquired company's leaders can carry the integration so well that their culture, processes, and people become the template for the combined company.
Borderline: whether this move is justified depends on the situation, and only the person in it can judge.
An example
A national insurer bought a small digital insurer for its claims platform, and the deal announcement said so: the acquired company's speed in settling claims justified the price. The acquired company's chief operating officer took that sentence into every integration meeting. Her team arrived at the first steering session with its claims process documented, running, and measured, with median settlement in nine days against the insurer's thirty-one. They offered a pilot on one of the insurer's regional books within sixty days. The insurer's claims teams were absorbed in two other integrations and had no comparable data ready. The pilot settled claims in eleven days. Within a year the acquired company's process was the template for all personal lines, and its chief operating officer ran claims for the combined company.
Why it works
Tying its way of working to the deal thesis, the reason the board paid the price, makes the acquired team's approach look better. Adoption is easier, because its processes are already documented and running while the acquirer's need explanation and adaptation. The acquirer's habits start to look worse, cast as the reason the company had to buy growth, and defending them looks costly, as blocking the synergies the board approved. This works when the deal thesis named the acquired capability, the acquired leaders have retention packages tied to outcomes, they are smaller and more cohesive, and the acquirer's senior team is distracted.
The thinking behind it
Jeffrey Pfeffer Managing with power, from Managing with Power: Politics and Influence in Organizations (1992): getting things done requires diagnosing who has power and whose support is needed, then building and using power deliberately. An acquired team that arrives with documented processes, measured results, and a pilot offer is doing that diagnosis, with the deal thesis as its claim and the integration committee as its forum.
Mancur Olson The collective action problem, from The Logic of Collective Action: Public Goods and the Theory of Groups (1965): small groups organize more easily than large ones, which is why concentrated interests tend to prevail over diffuse ones. A small, cohesive acquired team with retention tied to the outcome organizes faster than a large acquirer whose executives are spread across other duties, and that gap explains much of the reverse takeover.
Erving Goffman Teams, from The Presentation of Self in Everyday Life (1956): people performing together act as a team that shares an interest in the show succeeding. An acquired leadership team that presents as one at every steering session gives a coherent performance a scattered acquirer cannot match. What the team shows in front must hold up when the acquirer looks behind it, which is why the evidence has to be real.
When it fits
This suits the leaders of an acquired company whose capability was named as the reason for the deal, and who are convinced their way of working will serve the combined company better. You need a cohesive team, processes that are documented and already running, data that shows results, and the focus to work the integration while the acquirer's attention is spread across other priorities.
How to use it well
The window between close and the point where the combined culture settles is the only one you get, so prepare before close.
- Quote the deal thesis back to the integration steering committee, and connect each proposal to it.
- Arrive with your processes documented, running, and measured against the acquirer's.
- Offer pilots on the acquirer's own business, with a short deadline and agreed measures.
- Keep your team coordinated and present at every integration forum.
Win on evidence, and give credit to the acquirer's people who adopt the new way. The team that runs the combined company will include theirs.
What it costs and where it backfires
Acquirer executives who lose ground remember it, and some of them will outlast the integration. If the acquirer installs strong integration leadership early and ring-fences its own processes, the push stalls. The clean version is a contest on evidence. Slowing the acquirer's own integration work so your processes win by default, running the acquirer's people down through consultants, or labeling everyone who disagrees as parochial stops being an argument you win and starts damaging the company you are about to run.
When it is used on you
If you are the acquirer and your processes are being displaced, treat integration as the political contest it is. Install strong integration leadership early, decide which of your processes are worth keeping and ring-fence them, and match the acquired team's focus and preparation. Test their results on your own business before adopting them.