How can an entrepreneur-leader change an acquired company’s culture?

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November 20, 2019

by a professional from University of Missouri - Columbia in Chicago, IL, USA

A search firm that is evaluating a company to potentially acquire should carefully consider its culture. If the company has solid technology and competitive differentiation, but lacks a high-performing culture, there may be unrealized value ready to be unlocked. But how should a new leader go about changing the company’s culture?


Tim Czmiel, co-founder of Virtas Partners, addresses the issue in this short post:

https://www.virtaspartners.com/news/search-funds-culture-critical-in-evaluating-a-potential-acquisition

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Reply by a searcher
from Northwestern University in Bozeman, MT, USA
At the Booth ETA conference a week ago, one of the panelists quipped that as a byproduct of their newly acquired firms growth, merely 20% of the current employees were there before the acquisition- i.e. 80% of the employees were hired after the new CEO came in. A couple learnings here 1) I (mayber irrationally) have worried about the existing employees being resentful about me buying their business and coming in, but any new employees coming in after I am there will be introduced to me as the owner anyway, and not really have any pre-buy perspectives to compare against 2) Culture changes and is created (good or bad) as more employees are hired and bring their own flavor to work.
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Reply by a searcher
from New Bulgarian University in Walnut Creek, CA, USA
I would probably not go through with the acquisition if I don't already have a few people in mind that I would want to come in and join the company. Also, soon after the acquisition goes through, I will be very much interested in identifying (if I haven't done so already) and removing the characters who are promoting this low-performing culture. Removing just a few bad examples and adding a few good examples should be enough for the rest of the employees to figure out what the new CEO is looking for, performance-wise.
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