Jamie Klanac, Vice President of Revenue Operations at Transflo, shares his wealth of experience in managing mergers and acquisitions. During his nine years at IBM, Jamie managed the sales operations integrations unit and oversaw over 20 acquisitions.
“Assuming it's not an intellectual property acquisition where you're just buying the technology, the number one asset you’re acquiring is the sales team. Preventing regrettable attrition is key,” said Jamie.
Anyone who has worked in an acquired company can tell you that insecurity and nerves heighten at the time of the announcement. People worry that the acquiring company will lay them off or change the culture and they'll no longer enjoy the environment. Salespeople tend to be the most on edge. Not only are they worried about keeping their jobs, but they're also concerned that the way they are paid will be changed and that commission checks will be delayed.
"At IBM, we would typically look to make sure that their process was at least somewhat SOX compliant and had some governance in place. We would initially leave them on their old compensation plan, so we didn't change how they were paid. We needed them to continue selling more. That's why we acquired their company.
"Typically, we would keep them on their old plan for the fiscal year. If their plan was complicated, we might leave them on it a little longer. We looked at things like their base compensation and banding. Titles also matter. Culture matters. It's hard to adjust to being one of 200 people in a small company to one of 400,000."
Whether you're in the acquired company or acquiring company, sales managers must hear how compensation will be handled ASAP and socialize it with their teams. The faster salespeople hear their pay will not be disrupted or changed, the quicker they can regain their focus on selling.
If you want to maintain focus and build some excitement, get creative and figure out a way to provide extra value ($$) to the sales team.
"At IBM, we would do what we called synergy plans. We purchased the incoming companies because their technology was complimentary. Think about it. We had a customer base that they probably don't have, and we incentivized our team to make some opportunity identification. We introduced spiffs or bonuses for the IBM colleagues. On the other side, we would have the newly acquired company socialize IBM products and services. $500 for passing a lead is a pretty good deal."
Unfortunately, the United States is one of the easiest (if not the easiest) countries to fire someone in. Most countries have complex laws around hiring and compensation that protect the employee over the corporation. In the United States, we take corporate personhood to extremes not seen in most areas of the world.
Americans who have never worked with an International are often shocked when they try to fire someone in France and have to pay them a salary for an additional year.
To avoid any surprises, make sure to speak with some experts.
“There's a lot of education that has to go into acquiring a company that has a customer base in new regions. One of the benefits of working for IBM was the depth and breadth of IBM’s market. You had to understand the enablement, product enablement, sales enablement, and all of the quirks that come with a new region.
“Culture matters. I lived in Asia for years and learned a ton. You learn so much more when you live there and you're with the people.
“It’s very important that integration between companies is smooth, which may mean using kid gloves when it comes to new geographies.”
When I asked what aspect of an acquisition tended to be the most painful, he didn’t hesitate.
“Integrating the CRM.
“Systems are very emotional for sellers. They like their process, their icons, and they don’t like change. There were times when we could adopt some of the acquired companies’ CRM workflows because it was best of breed. But as a company the size of IBM, some of the tools couldn’t scale to our size or integrate with what we had in place.
“Most of the acquired companies were on Salesforce, and at the time, IBM was either on Siebel or SugarCRM. The acquired teams viewed being forced to adopt Siebel or SugarCRM as going back to horse and buggy times. It does matter that they see the CRM they have to use as a productivity tool, and we knew we were changing everything up. We tried to meet them halfway and make sure there was give and take in what we would bring into our CRM.”
If you're dealing with two organizations on the same CRM or the incoming organization can view your CRM as an upgrade, you would think integration would be easy. But it's not. People get attached to doing things a certain way.
"We acquired a company with $10 million ARR. They had one product, but it took us a while to integrate because they had so many processes hanging off of the opportunity. Fortunately, we were nimble enough to accommodate them. But a company like IBM will wrestle with whether or not to allow a company to keep using their existing system or adopt the larger company's processes.
"It's not just the systems. We have to worry about retaining the resources in RevOps. It's important that we keep them in their role because they're subject matter experts, and it's the right thing to do."
Tread carefully, use emotional intelligence, and view the acquisition process as a negotiation rather than a dictatorship.
At RevOps Co-op, we lift up ALL voices of our members. In this roundtable, we chatted with Black voices within RevOps. Here are the main takeaways.
RevOps teams have the interesting challenge of solving problems today while planning for growth in the future – Richard’s unique team structure helps.
RevOps professionals facilitate cross functional team work in all its forms and must learn to include and appreciate finance in that team.
Commission programs need to be fair to both employees and employers and they can be implemented without the pains of manual entry.
Full Cycle Sellers are the sales people who do it all, but technology can help them work smarter (not harder) as they adapt to organizational growth and change.
Cliff Simon, VP of Sales and Revenue at Carabineer Group, shares best practices and lessons learned when it comes to new CRM set up projects.
Nicole Smith, Head of Revenue Operations at Greenlight Guru, shares what RevOps professionals need to keep advancing their technical skills to create more success and advance their career.
Krystal Diel, Director of Revenue at Capacity, shares how to prioritize the budget you have, how to argue for more funding, and why understanding your stakeholders can make a big difference during negotiations.
Everstage, a RevOps Co-Op community partner, helps to demystify the move from a supporting role to a strategic role in RevOps.
Demandbase joins us to talk about why Account-Based Experience (ABX) makes sense for B2B, what you’ll need, and how to get started.
In this episode, Toby Carrington, SVP of Revenue Operations at Seismic, shares how people can prepare themselves to move from a siloed operations role to RevOps, why enablement belongs in RevOps, and what people new to Ops should think about before making the leap to RevOps.
During this episode, Asia talks about making the best out of a limited budget, early startup revenue operations priorities, and which tools are a must-have for every revenue operations team.