Being acquired

As some will know, I had an Agency for nearly 20 years: for 9 of these years (1993-2002) we were independent, while for the other 10 (2003-2012) we lived as part of a big American Group who had acquired us.

There are lessons I learned from the acquisition process itself, but they are a bit too close personally to share openly, so if you want to learn what they are you will have to email me. The question I received today, however, is different:

“Which life was better?”

To try to answer, I will dissect the word “better” into some of its many meanings.


Better = make more money for myself

This essentially depends on timing (and therefore on some luck): selling when you are at the top of your game will advantage you financially, because for all their experience in negotiation, your counterpart are as dependent on the business cycle as you are. I thought that having weathered the ebbs and flows of the tide so many times they would have the fix, but they don’t.

The general rule is therefore that they will pay you a little less than the cash your business will generate, unless you catch an overhang coming from a few exceptionally good years across the acquisition date, followed by a string of bad ones. This is a rather unique combination which I hit upon by sheer luck: my mistake was that I should have perhaps severed the remaining link a couple of years earlier than I did – so think carefully about your ultimate exit strategy.

Better = make more money for the firm

This is almost NEVER the case: the weight of compliance and policies will erode your profit margins, especially if you live in a peripheral country like Italy: as always in history, vassals pay for the Prince’s silverware.

Better = win more business

Of course, living under the umbrella of a big, respected international brand means you get invited to bigger pitches by bigger clients; this is very true for the “main” countries like the U.S., U.K. or Germany. Much less so for Italy, always an afterthought and never the target of big budgets. Smart individuals can however have the chance to work at international level to fully exploit their capabilities, and a big global firm is the best stage for someone willing to excel.

Better = work on more exciting clients/projects

Mind the general rule: sexy work in big American firms is done in New York (or, much less, in London). Nowhere else.

So yes, you could get on sexy work if you’re smart, but you must doggedly pursue a job in those central hubs: you must work the organisation, get hooked up in NYC, play the Corporate game, purposefully and ruthlessly.

Better = easier to recruit/motivate good people

Being a grunt for a big services Brand (advertising, consultancy, PR) is like being drafted for military service: you do it because you must, but you hate every second of it. As an independent, people joined my firm because they wanted to work with me, after the acquisition they joined because they wanted to get our Big Brand on their resume.

So this will work out even, trading the attractiveness of the firm’s leader for the attractiveness of its brand, but the sense of loyalty will be much watered down; I tried to walk a middle ground of treating people fairly also when in a Big Brand, but of course with the added corporate costs you can only do this for as long as business is exceptionally good. I am sure there is plenty of ex-employees who think I was every inch the corporate selfish bastard.

Better = more sophisticate internationally

Definitely so: if you’re willing to do it, a big Global Agency is where you can forge relationships, learn from other cultures: this is where your ability to function in a culture other than your native one is forged and where you learn to live in a constant state of imbalance.

Better = more innovative service offering

Big organisations are risk-averse: they thrive not in innovation, but in perfecting the tried and tested, making it into a process that requires less and less skilled workers because it’s so ingrained into the organisation.

New ideas are received with intellectual curiosity but rarely pursued also because they would entail change and remember, no organisation ever wants to change. As a result, innovation departments is where you put brilliant fellows whose impact on the organisation is next to nothing.

Better = more rigorous planning and management

Services businesses are bitches to model, and without models, it’s hard to develop measurement breakpoints to understand what’s going on.

So you would be justified in expecting that a conglomerate made up of hundreds of very similar businesses would have developed some good quality models for you to adopt: well, if that was the case, such models never made it to me: the things I learned (and there are many) were invariably the intuition of more insightful or more experienced peers, rather than the distillation of collective knowledge burned into a crystal-ball Excel.

Better = more skilled as a manager / professional

As I already said the acquisition leveraged my ability to work in international contexts, but it did not fix any of my own shortcomings (I am a good leader but a crap manager, I lose interest easily and I am not so fond of details, much preferring the Big Picture), nor did instill in me any love for the human side of organisations. In fact, my tendency to analyze/model and then use the information system to support organisational change stems probably from the desire of managing the model rather than the people making it up in real life.

I have no idea whether the people in the model (my employees) found themselves objectified: one thing I remember well is that I kept everybody at a distance for fear of attaching myself to someone I may have to fire later on, also because I insisted on dealing with every dismissal directly myself, perhaps as a way never to forget how painful they are.

Better = improved my relationship wth money

Despite not being wealthy, I am not motivated much by money: my own greed was always short-term and tactical (“Hey, I made a bundle this year, let’s go buy a new car/house/toy !”) ; as a result, I had a hard time accepting and supporting faceless corporate greed, which is an end in itself.


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