Photo by Max Felner on Unsplash

In 2016 the founders of the company I worked for decided it was time to sell the business. It was understandable. They wanted to realize a financial return on the 20+ year investment they had put into growing the company. They also wanted to prepare it for the next stage of growth. So, they hired a board advisor (who I fondly refer to as “Captain Corporate America”), found themselves an investment banker, and began the M&A process.

I joined the company in 2002 as employee #16 in an entry-level tech support role. By 2016 I had become a member of the executive team. I had been with the company almost fourteen years and in many ways I had grown up there. I had seen the culture naturally evolve into one that I felt was healthy and strong. To say I had mixed feelings about the sale and the prospect of such a massive change would be an understatement.

I was faced with a decision: stay and work to make it a success for everyone (myself included), or leave it all behind.

I decided that I wasn’t prepared to leave. I wanted to see things through. I wanted to do what I could to find the best possible partner possible, one that would be a fit culturally and strategically. After a lengthy sales process the company was acquired by a large US public company for a quarter of a billion dollars. (Yep, that’s ‘billion’ with a big old capital ‘B’.)

At the time it felt like a very long and thorough process. But looking back now I would compare it to a whirlwind of speed dating that suddenly ended in a wedding. 

Or more specifically, fifty first dates, followed by half a dozen or so second dates, a couple third dates, then a wedding. I realize there are many happy couples who dated just a handful of times before getting married. However, I think for most people a successful marriage requires time to get to know our future life partner. It still amazes me how quickly two workplace cultures got married. (Full disclosure: I dated my beautiful wife for seven years before popping the question. But that was due to my horrible procrastination rather than to any fear of commitment.)

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But I digress.

When I consider the craziness of that year, I remember the mixed feelings of excitement, stress, optimism, and anxiety that permeated my daily life. I truly believed that this sale would ultimately be good for everyone at the company, either financially, professionally, or both. I believed that because we were going through a “process” we would find our perfect match. Maybe we did, but only time will tell. However, when I reflect more deeply on that roller coaster year, my mind keeps coming back to one question.

Could we have better prepared our people by creating a company culture that was ready, even eager, to adapt to massive change?

We did not tell the broader organization we were selling the company until the deal was done. Only a select few were officially “in the tent” – one of many M&A catchphrases I still roll my eyes at – but many suspected. The sale was a secretive process with the “dating” happening between executive teams behind closed doors and in hotel conference rooms.

I’ll never know if keeping it secret was the right decision or not. I’ve heard good arguments for and against.

Local Vancouver company Vega was supposedly very open and transparent with people about their intention to sell and they successfully sold for $550M in 2015. They continue to operate very successfully today and have a reasonably high rating on Glassdoor. I know in our case it impacted people’s trust in senior management and how prepared they were, mentally and emotionally, for the eventual sale.

Photo by Kristina Flour on Unsplash

Could we have done more to intentionally build our culture and prepare it for a sale? In most start-ups the founders are incredibly busy. They’re trying to build product, hire people, and simply survive. They don’t have time for much else. Then the company starts growing and products start shipping. People get paid more and have better work-life balance.

The assumption is that the culture is doing just fine. And from that assumption comes a careless approach to culture.

Left alone culture will evolve by itself. However, whether it evolves into something that can survive and adapt to massive change – an acquisition, a disruptive competitor, an economic decline – becomes a roll of the dice, a game of chance. In Neal Doshi’s book “Primed to Perform”, he talks about creating a high performing, adaptive culture using the science of total motivation. I believe this type of culture must be deliberately designed and built.

A healthy culture requires a clear PURPOSE, vision, and values; opportunities for PEOPLE to play and grow; and the right PROCESSES to support each.

Here is a consideration for founders out there who are contemplating, or have already decided, to sell their business. If you care about the people involved as well as the money, design your culture to achieve the outcome you desire. If your goal is to grow to $1B and take the company public, prepare them for all the highs and lows that come with an IPO and with being accountable to thousands of shareholders. If the goal is to sell the company, whether it’s to a private equity firm or a strategic partner, prepare them to adapt to a new culture and new systems and processes. There’s no quick-fix recipe, but a few key ingredients and a little help from those who have lived through it will go a long way. Get help from experts who have experience doing this. Don’t leave your culture up to chance.