He says his success stems from winning the hearts and minds of his employees; whether it’s by giving out stock options or by taking pride in a successful corporate soccer team, Lee creates a sense of community in his employees.
Smart Business spoke with Lee about how he plans and executes an acquisition.
Q: How do you deal with company culture in new acquisitions?
It’s not just about what needs to be the same, but more importantly, what doesn’t need to be the same.
Every organization has a certain culture. Instead of talking about culture and how to impart that into an acquired company, I’d rather look at it as values. Our groups are all over the world.
How could Achievo corporate culture possibly dominate anything like German culture, for example? We’re not trying to change Germans into Chinese.
We have a lot of respect for local culture, and I don’t mean just nationality but also business culture. These companies are successful in the first place, otherwise we won’t buy them. And if we buy them because they’re successful, let’s not screw them up.
Q: How do you plan and execute an acquisition?
The first phase is to research the deal, the second is the deal itself, the third is integration and the fourth is transformation.
We have a roll-out model; we buy and integrate and transform. Those extra steps are very important. We have a certain profile of company size and, with that, we try to identify companies that fit that profile. You do that by doing research, going to conferences and finding people in the field.
The acquisition part of it is more mechanical. In a sense, it’s like hiring a whole team. We have to subject it to some of the criteria like we have for hiring people. In our acquisitions, we see to it that these people are going to help us create the future together. To do so, we make sure the interests are aligned. For example, all acquisitions include an element of stock. It is not so much because of valuation although it obviously affects that it is alignment. If you don’t want to sell out to us and leave, we do not proceed with acquisition.
Q: How do you integrate the new acquisition?
Even prior to Achievo, I acquired many companies. One experience that I have is just one of many companies we acquire to the seller, it is the only company they have that they just sold. Therefore, the perspective is very different.
You have to look at things from their perspective. You’ve got to be very sensitive to that fact because even great people once you acquire them don’t know what to do anymore. They don’t know what they’re supposed to do the previous CEO used to make all the decisions himself and now he has a boss.
In our situation, a lot of acquisitions are all over the world. In recognition, we have developed a very carefully designed acquisition model. It spells out what things we change and when, like the organization structure and accountability. Those things get sorted out quite quickly.
We have an executive team that has helped integrate over 100 companies in their career. So it is a condensation of our experiences, and it is a living document that we learn every day to add things to.
Q: How do you move from integration to transformation?
It is the fourth step that really matters the transformation phase. Once the company joins us, they are no longer the company they used to be, particularly to their existing customers.
Usually customers will be concerned in the beginning and our integration process includes how to deal with that. Once we deal with that proactively, the customer realizes this smaller company that could only help them so much now has global resources that can help them grow even internationally.
Q: How do you find the right people to hire?
There is no right person, because there is no perfectly defined job, either. Nor am I always able to tell in the course of a few-hours interview.
One thing I tell my management team is, ‘I don’t hold you accountable for hiring 100 percent good people.’ On the other hand, when it became obvious quickly that we did not hire good people, we need to act quickly to change that.
Sometimes building a great team is not about hiring the best people but making changes when you realize that the situation is different from what you expect.
HOW TO REACH: Achievo Corp., (925) 498-8820 or www.achievo.com