Originally published by Marc Lore on LinkedIn: Empowerment After Acquisition
Often after one company buys another, you hear leaders talk about how they’re going to “empower” the executives of the acquired firm. A CEO might say, “We’re going to leave them alone, we’re not going to mess with their culture, I just want them to keep doing what they’re doing.”
Sounds good, right?
Well, it’s not as easy as that. Every acquiring company says the same thing, yet many acquisitions fail. So the obvious question is, “Why?”
Let’s walk through it: An entrepreneurial team’s business finds a lot of success and quickly grows. They establish their own unique culture and have a clear vision of how they plan on changing the world.
Then the acquisition happens and they become part of a larger organization. If you simply tell them “keep doing what you’ve been doing,” you take away the exciting part of their careers – the part where they face new challenges and experience the sense of accomplishment that comes with finding inventive solutions. Instead, that’s inadvertently replaced with a series of subtle limitations. Their future is no longer an open road – it’s a side road that can’t access the thrill of the highway.
So we’ve chosen to do something different with our recent acquisitions: create more opportunities, more challenges, and more excitement for each management team.
For example, we recently acquired leading outdoor retailer Moosejaw, which has both a large online presence as well as 10 physical stores across Michigan and the Midwest. Moosejaw will continue as a standalone site with CEO Eoin Comerford deciding how to manage his business.
But if we stopped there, we’d be making the same mistake described above.
Instead, we’re asking Eoin to run his entire outdoor category across all of Walmart and Jet.com in addition to running Moosejaw. That means managing three different voices and three different customer segments. We haven’t limited the challenges he and his team face, we’ve increased them. He has more responsibilities and opportunities now than before the deal happened.
The same is true for CEO Mike Sorabella and his executive team from Shoebuy and Matt Kaness at Modcloth. By being responsible for their categories at Walmart and Jet as well as managing their own sites, they all get bigger roles and greater challenges.
But to be completely open, there are some tough moments when you try to actually implement this approach. I’ve already experienced situations in which the CEOs we brought in have wanted to make decisions and commit capital in a manner that I did not necessarily believe was the best option. But that’s okay. Empowerment doesn’t mean you get to do whatever you want as long as you agree with your new parent company. It means giving true authority to others. It means providing actual autonomy and responsibility. Building trust with talented leaders is vastly more important than the outcome of any single decision.