Robert Herjavec’s keen entrepreneurial sense makes him a good judge of character — both of businesses and people. This is obvious to viewers who watch him evaluate the pitches of business hopefuls on the ABC show “Shark Tank.” But on a less visible stage, he’s used this skill to navigate a number of major acquisitions, building and selling several companies.
As founder and CEO of The Herjavec Group, he’s now focused on buying. Based in Mississauga, Canada, the $125 million-and-growing global security and network acceleration services company recently completed its sixth acquisition in seven years. With its staff doubled over last year to about 200 employees, Herjavec says incorporating new employees into his company’s culture has been a challenge.
When you buy a company, he says to immediately evaluate its employees against your needs and make three lists: people you’re definitely keeping, people you’re not and people who fall in between.
“You have to understand why your company is good at what it does and what kind of people fit into your environment, and you go and look for those,” Herjavec says.
Aim for a deeper understanding of potential hires’ values and thus their fit with your own by having multiple people interview them in person. Check their references, talk with their team members and even ask their customers for feedback. Then test them out through a trial workday.
But Herjavec warns to avoid the initial temptation to hire people similar to you that you think you’re going to like.
“You have to be flexible,” he says. “Maybe somebody in the other environment is going to enhance what it is you already have. And then some people aren’t going to fit your environment, aren’t going to enhance it, but my gosh, they’re just such highly, personally motivated people that you’re willing to make the investment to change them and train them.”
To weed out potential hires that make your maybe list, set a timeline for finalizing the decision. The deadline should be before you take over the company. If your evaluation process hasn’t moved them to one of the other two lists by that time, Herjavec says to be brutally honest and go with your gut — they’re a no.
“If you’re not 100 percent sure, then don’t keep them,” he says. “The hardest thing in a culture is indecision. I think people would rather know the hard truth than a positive lie.”
That applies even after you’ve chosen to hire someone, because no evaluation process is foolproof.
“When we realize we’ve hired the wrong person, we don’t spend months trying to figure that out,” Herjavec says. “When someone’s wrong, they’re wrong.”
Give potential hires the opportunity to evaluate their fit with your company, as well, by being clear about your expectations and mission. Then have them interview associates in similar roles to get a hands-on impression.
“Your mission statement is what you live and breathe every day,” Herjavec says. “It’s who you are.”
Once your employee selection is complete, incorporate new employees into your culture as quickly as possible. The Herjavec Group does this by physically taking acquired employees out of their old office environments and bringing them into theirs.
“We find that culture shock, that bucket of cold water, works great because it shakes them up and forces them to change immediately, and they get to experience what it is we do right away,” Herjavec says. “In situations where we haven’t done that, the implementation of change has taken longer because people tend to revert to what they’re comfortable with. Generally, what they’re comfortable with is the things that they know, and what they know is the way they used to do things.”
Be a matchmaker
Robert Herjavec has several general guidelines when considering an acquisition besides culture.
The founder and CEO of The Herjavec Group says to first make sure the company differentiates from your own in a way that benefits your business.
“We look for people who complement something we’re missing,” he says. “Look for complementary businesses either from a product, the coverage, a client base and so on.”
Evaluate the potential company’s client base to avoid one that overlaps too much with your own. More importantly, Herjavec says, make sure clients are satisfied with the company’s performance. To do this, go out and talk directly to customers.
“People try to make shortcuts — they have metrics, questionnaires and all kinds of stuff,” Herjavec says. “It’s one of those things that you have to do. You just have to get on the plane and go see people.”
Also, be wiling to go through a lot of potential deals before finding the right fit — don’t settle.
“We figured out what kind of business we’re looking for, what it has to look like, what we need and we’re not afraid to walk away,” Herjavec says. “I feel no pressure to do a deal.”
How to reach: The Herjavec Group, (905) 306-9948 or www.herjavecgroup.com