What to expect when private equity buys your company (Part 2)
When a company buys another it's automatic that the rules will change. These changes will take place quickly or over time. YOu have to be prepared for the changes and know its a not a matter of if they change but when.
New management with private equity take overs
There will be games that can get played against you. Companies that acquire are typically larger, they swallow the old one. The new company has goals and outcomes they want. The new exe...
What to expect when private equity buys your company (Part 2)
When a company buys another it's automatic that the rules will change. These changes will take place quickly or over time. YOu have to be prepared for the changes and know its a not a matter of if they change but when.
New management with private equity take overs
There will be games that can get played against you. Companies that acquire are typically larger, they swallow the old one. The new company has goals and outcomes they want. The new execs will pick key people who were labeled as “critical” and “needed”, they are sizing up the team for who to keep and who to let go. The acquiring company has put new people into leadership without knowing the lay of the land, the legacy people and they change up processes. New people are pushed to be integrated and it screws up the dynamics. This is the case of too many things at one time, the dust doesn’t settle soon enough.
The problems with quick changes in a business
New takeovers do not take the time to ensure there is a full understanding of how the company works (demographics, sales process). Larger companies assume they can flip the switch overnight. This is business sabotage. Salespeople jump ship and the competitors sneak in and steal clients. (targets are prioritized).
How companies lie when they sell their companies
When companies are ready to sell, they inflate numbers, sales, roles, and even future events. They are rebuilding the house before they sell it. Sometimes companies are bought for one aspect of the company and the rest are closed down, sold off, combined, or traded. Sociopaths are upgraded because they are willing to play the games.
Time consuming games played against salespeople
You spend more time on new systems than you do selling when companies want to add to your schedule.
- Momentum is funky
- Clients are concerned
- Old resources for closing deals are no longer there (products, services, people)
- Reporting
- Email
- Computers
- Resources
- Pipelines are screwed up
- Competing product lines will battle
- Pay discrepancies and benefit discrepancies (the smaller company typically has lower pay with a bigger commission structure) salary + bonuses / monthly number ramp up and down based upon numbers. Start-ups can have higher rewards.
- The smaller company keeps the same players (execs) and keep the company as a division, this becomes a fight because its start-up mentality with money.
Scenario 1 – company offers you a new role, you quit your old rule, and just before you start they pull the new job away from you
Scenario 2 – company offers you a new role, they ask you how to fix all of the problems, you give the answer, the job never materializes and they let you go
Scenario 3 – You get called to the carpet from the management team because the fake pipeline built before the sale is what you are being held to. When companies sell they inflate their numbers and their sales pipelines. New managers don’t care, they want you to hold to the numbers they want to hold you to the fake numbers
Scenario 4 – Territory changes – salespeople will say they have contacted people so they can swoop in on areas and freeze you out. You are upsold into believing that you will have new clients but that is already in the pipeline. You can't touch them.
Scenario 5 – Territory changes with protection, the acquiring company may already have some of the clients.
Scenario 6 - The new company will starve out pipelines and stop marketing, they reduce product offerings
Scenario 7 – Lead generation is stopped from the bought company, marketing stops and so does momentum. It takes a while to get going again.
Scenario 7 – The Kobyashi Maru – no way to win
Scenario 8 – Top salesperson has honed their skills for a long time, they have good retainment. They keep horrible & toxic people in management that squeeze out top people.
Scenario 9 – Bad new territories -
Scenario 10 – CRM updates and gather intel before they let people go.
Scenario 11 – Give us your new plan and we will bring you up
Scenario 12 - The new company has you train their people and then they fire you
Scenario 13 – Pay gaps are not dealt with
What you can do
- Keep in contact with people in your industry
- Keep an up to date resume
- Have social
- Keep an eye out for the games that are being played
- Be aware that when you look for red flags you find them
- Have a “go no go” conversation and map out a plan
