If It Isn’t Broke, Don’t Fix It: How to Grow a Brand Through M&A by Enhancing What You’ve Got
There’s a certain myth surrounding mergers and acquisitions (M&As). It’s this idea that when a larger company buys a smaller business, it does so with a “slash-and-burn” mindset—meaning that fear of job loss and change usually works its way into the minds of existing employees working within the company being acquired. And while that might be an accurate approach for some acquisitive organizations, that’s certainly not the case for all of them. When it comes to the success we’ve achieved within our company-operated division’s acquisitive strategy, the old saying “If it isn’t broke, don’t fix it” definitely applies.
Our strategy is simple: Focus on the people that make a business great, and learn how to enhance those strengths to make a company the biggest and best version of itself. This means that businesses are bought or absorbed not because they are broken, but because they are thriving and leaving their mark in a key targeted segment of the marketplace. We look for a merger of equals—the combination of two companies with complementary market strengths—for a stronger, more efficient combined enterprise. And by leveraging—not erasing—the skill sets a business already has across a greater pool, we’re able to focus on increasing their volume, boosting profitability and escalating the chances for greater success.
Take, for example, USFI—a single-source marketing solutions firm that manages creative, production and logistics for local, regional and national customers. In 2015, our company-owned division acquired the company. USFI stood out because its business and team members were recognized as leaders within several key vertical segments, including hospitality and telecommunications. We knew that adding the USFI business would include the addition of top-shelf management and first-class insight and experience to our business, so it didn’t make sense to turn their business and their structure upside down the second it was acquired. It was very clear that their systems in place were not just working, but doing extremely well in the markets they served. As a result, we saw our job as one aimed mainly at supporting the team and giving to them the tools they needed to succeed to an even greater degree.
Our work with USFI is just one example of many—all with similar stories and similar outcomes. And time and time again, we realize that during the M&A process, there are some companies that, quite frankly, just don’t need to be fixed. This starts with looking for best-in-class businesses from the very beginning—ones with good people, great culture and relevancy within each client they serve. It’s our job to value these areas at which a company already excels and to find the best way to utilize each distinctive asset to create the biggest impact possible. If you find your own business going through the M&A process, whether as a seller or an employee, it’s important to remember that, ultimately, change is good. And change doesn’t have to invoke fear. Instead, look at it as an opportunity to build off the strengths that you already have. Your brand will be better off because of it.
R. Scott Sutton, CFE, is vice president of Safeguard Acquisitions Inc. and vice president of franchise development for Safeguard Franchise Sales Inc. At Safeguard, Sutton is responsible for the company’s Business Acquisitions and Mergers (BAM) program. In 2014, he was named a Dealmaker of the Year Award winner given by Franchise Times® magazine. He is a board of trustee for the IFA Educational Foundation and serves as vice-chair of its strategic planning committee. Follow Sutton on Twitter @rscottsutton