Accelerating Progress Whereas Preserving Id

How can entrepreneurs and founders know when it’s finest to scale their companies via partnerships and mergers? And the way can they make sure that they handle mergers & acquisitions with out dropping sight of the values that made their enterprise profitable within the first place? We talked with Sujay Saha, Founding father of Cortico-X, a boutique technique consulting agency, about what founders ought to search for as they take into account inorganic development. Cortico-X not too long ago introduced a merger with long-standing advertising insights and analytics agency The DRG. Right here’s what Saha needed to say about that merger and his recommendation for others considering bringing two corporations collectively.

Let’s begin along with your current merger: What made DRG the suitable associate for Cortico-X?  

DRG has been round for greater than 50 years and Cortico-X for lower than 5. There is a gigantic quantity of synergy between the 2 corporations, sharing a lot of the imaginative and prescient and plenty of values. We began out by collaborating on a number of shopper tasks, and thru these collaborations, it grew to become clear that we weren’t simply teaming up on a number of tasks; we have been constructing one thing larger — collectively!

Purchasers have been asking for options that transfer seamlessly from perception to motion, and each companies realized that by combining our complementary capabilities, we may ship on that want in methods neither of us may ship alone. DRG brings deep analysis experience, operational excellence, and an extended monitor file of turning prospects, manufacturers, and worker insights into readability and motion. Cortico-X introduced daring technique, transformation consulting, and design experience, sometimes working with C-level executives to form organizational course and development.

Collectively, we may shut the long-standing hole throughout what prospects say, what organizations know, and what leaders do about it. Along with the shared values, complementary strengths, and cultural alignment, there was additionally a shared trade focus. Each organizations already served healthcare and monetary companies as precedence markets, making a pure alignment and crossover.

Mergers and acquisitions can typically dilute an organization’s tradition or goal. How are you guaranteeing Cortico-X stays true to its human-centric values?

We’re lucky that our corporations have already got related cultural constructs and values. At Cortico-X, we name them X-Components: Win as one, Draw power from empathy, Carry our edge, Ship substance not smoke, Personal it. This aligns nicely with DRG’s deep-rooted core values and what they needed the group to evolve into. As well as, the 2 corporations share a typical goal constructed round driving human-centricity and accelerating that motion into the bigger society. That mentioned, we’re taking a really methodical strategy to integrating and bringing everybody collectively as we go alongside.

In your view, how can a founder know if scaling via a merger or partnership is the suitable subsequent step?

Founders at all times need to have the ability to present development and progress. Whereas natural development is nice, it could not occur on the tempo that’s wanted or that you just want. On this period, with a lot that’s altering throughout the board, there’s a distinctive alternative for founders to look to different corporations that may complement their talent units and capabilities. In that approach, they will speed up their development with mergers and acquisitions versus rising organically, which may take a very long time. If achieved in a methodical approach, inorganic development generally is a super worth booster. This merger has allowed Cortico-X [ significantly grow overnight because of the combined capabilities and integrated service offerings that can provide even more value to our expanded clientele. If we even look at it through the employee lenses, this transaction provides an opportunity for employees to expand their capabilities, scale the impact, and live a high-growth company momentum.

What are the biggest green flags—and red flags—when evaluating a potential business partner or acquisition target?  

There are a few green flags that I look for in evaluating deals beyond being clear about the rationale for the deal:

First, really strong and well-aligned fundamentals — both financial and operational. A well-aligned vision/purpose is the icing on the cake.

Second, complementary capabilities. In our recent merger, the service offerings snapped right into each other, making it a no-brainer.

Last but not the least, we look for a strong leadership team that stays engaged even after the deal. When the key executives are excited about the combined future and willing to commit long-term, it indicates a natural cultural alignment, reducing execution risk

Of course, the inverse of those green flags are going to be the red flags, but I would like to highlight the lack of cultural compatibility as the biggest red flag for me. While a lot of this compatibility could be assessed instinctively, I recommend taking a more structured approach to assess cultural values and the impact of those on customer/employee sentiments

What advice would you give to founders who are wary of sharing control or merging cultures—but still want to grow?

Change in general and relinquishing control in particular are hard. Reinventing or transforming the business in the case of mergers and acquisitions is even more challenging. While it’s ideal for any business to continue growing organically at a steady pace, the business does need strategic transactions to quickly amplify capabilities, move into new areas, or just scale the existing resources to capture market.

Founders should definitely evaluate these opportunities to stay true to the business’s growth aspirations and create appropriate structures needed to merge cultures. It’s definitely not easy to integrate businesses, so they should keep resources on the side to do it the right way. Even in our current merger with DRG, I’m excited not only for the business synergies around the expanded clientele, revenue, and capabilities but also that Cortico-X has appointed DRG’s previous CEO, Lanie Johnson, as our COO. Lanie has brought her seasoned operations team to Cortico-X, which has helped the combined company to immediately move into the next tier of business maturity, giving clients, employees, and investors even more confidence in the success of Cortico-X

If you had to distill one leadership lesson from your merger experience into advice for other founders, what would it be?  

Have the leadership teams of the two companies align very quickly, even as a part of the dealmaking process. Bringing two companies together can be a scary initiative, but a lot of the worries can be assuaged if the leaders of both companies understand the need to draw that alignment with their leadership teams.

That was key in our merger. We brought the Cortico-X and DRG leadership teams together to talk, not for politically right reasons, but to genuinely learn about each other, build relationships, and understand each other’s business philosophies. Once that alignment happened, everything else felt like a smooth run. We are potentially a living example of the success of such an approach — we closed the deal within four months of first talking about the merger opportunity and have already got two wins in the market post closure.

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