Dümmen Orange fleshes out its acquisition integrations

 

Dümmen Orange, one of the world’s top breeders of flowers and plants, has around 5,000 U.S. and Canadian customers, but the average gardener likely doesn’t know its name — a name that itself is only a few years old. Dümmen Orange’s plants are sold to growers who then sell them at their retail locations, and big box channels often label its plants under a store brand, says Operations Director Kate Santos.

The Columbus team, which is also the North American headquarters, has grown to more than 30 individuals who handle finance, accounting, executive management, marketing, customer service, logistics and IT. Additional sales managers and technical team members work throughout the U.S. and Canada. The majority of the 7,000-plus employees work in the global production facilities.

Dümmen Orange, headquartered in the Netherlands, formed when two major plant breeders merged and then acquired several more companies, Santos says. The organization’s portfolio and standing in the industry grew markedly.

“I came on board right after those acquisitions happened,” she says. “My initial role was building the team support for a wider assortment of products that we were supporting in the market. We went from essentially five employees, to in total, just shy of 60 in North America.”

That pattern of acquisitions has continued, with an average of three to five a year. But supporting day-to-day operations while adding new companies and their products can strain Dümmen Orange’s systems.

“That sometimes has these unpredictable challenges, where you’re basically supporting on those two fronts,” Santos says. “As an organization, how we’ve evolved over the last four years since I’ve been with the company is trying to develop an IT system and structure to help support that.”

System check

Originally, Dümmen Orange planned to keep an acquisition’s systems intact, but create a bridge to the main system, Santos says.

“We learned pretty quickly that was not a good way to go, because each system speaks a different language and sometimes when those languages aren’t translated correctly, it ends up causing a lot of challenges,” she says. “You run into duplication in numbers or availability, so people are seeing, essentially, a ghost availability that they’re booking against that’s not there.”

Last year, for example, Dümmen Orange acquired a succulent producer. Both customer pools were interested in additional plant material, but they needed a straightforward way to do it.

“You never want to lose that momentum and/or excitement for, ‘Hey, now you guys are offering this, but I can’t figure out how to get it,’ or ‘I tried to go through how you guys supply everything else, and that’s not working yet,’” Santos says.

Acquisitions involve people, culture, operations and product, which all need to be assessed, but business leaders shouldn’t forget the systems. Customers need a platform to order the product.

In any case, Santos says Dümmen Orange’s CEO Biense Visser often reminds his employees to never fall in love with a deal, which can cloud judgment. A loss of objectivity can lead to missed details and negative consequences after the fact.

Today, Dümmen Orange, North America, goes through an interim period where it doesn’t merge the existing platform until there’s a full shift. Otherwise it dilutes the IT department’s focus and, Santos says, “you end up doing a lot more firefighting than is worth your while.”

The IT team is also being divided to avoid shifting priorities. One group will focus on acquisitions and the other will attend to the day to day.

Well-rounded and flexible

The first set of acquisitions may have looked seamless, but Santos says they still did a lot of troubleshooting with fires left and right. Being more systematic in how a company is integrated enables Dümmen Orange to slide that acquisition into the organization, without as many surprises popping up after the fact.

“Don’t get me wrong; there still are (surprises), inevitably, just not quite as many,” she says.

Dümmen Orange also learned to increase its upfront due diligence, bringing in multidisciplinary teams to not only assess where the target company stands, but also ask questions about integration.

While the due diligence can’t involve too many because it’s confidential, Santos says if the acquisition and integration teams are too small or imbalanced in terms of perspectives, or departments, things get missed.

“With each stage, we found that having a more well-rounded team has enabled us to move to more of a proactive approach to an acquisition and integration, rather than a reactive approach,” she says.

Setting realistic integration timelines is essential, but it’s still a fluid process.

“No two are the same, but it’s important to not be too restrictive on the integration approach because change is inevitable as the process goes through, and there needs to be some flexibility in the strategy to be able to manage that,” Santos says.

It’s also helpful to come together after a company has been integrated to evaluate what went wrong, how those challenges were solved and what should be changed and bankrolled into the next set of acquisitions.

“You may make a mistake once, but you won’t make it twice,” she says.