Seven Mistakes that will ruin your Acquisition

Mistake #1: “To believe that the acquisition will fix the current problems of the company”

The “Fix by acquisition Syndrome”

This type of mistake is typical of organizations that believe that buying a company with a great product, or technology for example, will resolve their poor innovation and low product vitality issues. If the problem is that the company lacks a culture of innovation, has inward looking product management and engineering organizations, and the sales force struggles to adopt and sell new technologies and business models, then the result of the acquisition will be more like pouring salt over an open wound. In one of my personal experiences of an actual acquisition, the VP of Engineering left because he disagreed with most of the reasons why the acquisition was being done. He objected the R&D synergies proposed in the integration plan and was ready to reject the product roadmap based on the new product offered by the company to be acquired. According to his words, the new product, its technology, and its features “did not represent who we were”. What this VP did not realize was that “who we were until then” was not creating the innovative solutions that our customers needed to resolve their needs and problems, and that for that reason we were losing market share, as well as our long-time reputation as innovators. This sounds surreal, but it is true. The acquisition is an enhancement or an expansion to the company, not a band-aid.

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