WEBVTT 00:00:02.350 --> 00:00:05.070 Welcome to the Growing EBITDA Podcast, where 00:00:05.070 --> 00:00:07.669 we unlock the doors to management and technology 00:00:07.669 --> 00:00:10.689 insights in the middle market. Join us as we 00:00:10.689 --> 00:00:13.230 explore innovative strategies to drive revenue 00:00:13.230 --> 00:00:16.129 and EBITDA growth, interviewing industry leaders 00:00:16.129 --> 00:00:18.949 and technology experts. Whether you're looking 00:00:18.949 --> 00:00:21.809 to streamline operations, understand the latest 00:00:21.809 --> 00:00:24.629 tech trends, or lead your company towards exponential 00:00:24.629 --> 00:00:28.050 growth, you're in the right place. Stay tuned 00:00:28.050 --> 00:00:32.799 and let's grow together. James, I got a question 00:00:32.799 --> 00:00:40.920 for you. Who sang our intro song? Do you know 00:00:40.920 --> 00:00:43.140 this person's name? I don't think we know. I 00:00:43.140 --> 00:00:46.679 think producer Matt knows the individual. Maybe 00:00:46.679 --> 00:00:49.460 we have producer Matt as a guest one day on the 00:00:49.460 --> 00:00:52.299 cast. What do you think? Someday. You think he's 00:00:52.299 --> 00:00:55.119 ready? I think so. Hey, just to make fun of ourselves 00:00:55.119 --> 00:00:56.600 for a minute, Mike, do you mind if I make fun 00:00:56.600 --> 00:00:59.329 of us for a second? That's your best skill set. 00:00:59.509 --> 00:01:03.350 I know. We were such newbies. We loaded our podcast 00:01:03.350 --> 00:01:06.170 zero as season one, which was our intro. And 00:01:06.170 --> 00:01:07.969 then we immediately jumped to season two with 00:01:07.969 --> 00:01:10.370 all of our content. So maybe one day we circle 00:01:10.370 --> 00:01:13.269 back with having a producer Matt on and we can 00:01:13.269 --> 00:01:15.829 attach it to season one. I actually thought that 00:01:15.829 --> 00:01:17.430 that was the only way we could guarantee getting 00:01:17.430 --> 00:01:19.890 renewed for a second season. I thought that was 00:01:19.890 --> 00:01:23.069 part of the plan. That's true. That's a fair 00:01:23.069 --> 00:01:25.510 point. That's a fair point. Yeah, I thought that 00:01:25.510 --> 00:01:29.040 was part of the plan. Today, we're talking about 00:01:29.040 --> 00:01:33.379 integration today, post -acquisition integration, 00:01:33.799 --> 00:01:37.560 post -merger integration, PMI, goes by many different 00:01:37.560 --> 00:01:41.840 names. And to get us started today, I want to 00:01:41.840 --> 00:01:46.500 know, I know mine, I want to know the most interesting 00:01:46.500 --> 00:01:51.019 place you've ever done an integration. Let's 00:01:51.019 --> 00:01:52.980 digress for a second here. Tell us the story. 00:01:53.140 --> 00:01:56.939 I know you've got some good ones. Oh, man. I'll 00:01:56.939 --> 00:02:01.599 say I did it. It's this town called, so take 00:02:01.599 --> 00:02:03.680 you a little bit of a story. I started working 00:02:03.680 --> 00:02:05.680 for a company that went through a lot of M &A, 00:02:05.760 --> 00:02:08.159 and I was working out of the Mexico office supporting 00:02:08.159 --> 00:02:10.680 integration work for companies within the US. 00:02:11.080 --> 00:02:13.460 And one of the acquisitions we did was in Bonham, 00:02:13.500 --> 00:02:16.500 Texas. And so coming off of that, we had just 00:02:16.500 --> 00:02:19.439 acquired a group in La Jolla. in California, 00:02:19.639 --> 00:02:22.560 so outside of San Diego. So it was a great integration. 00:02:22.900 --> 00:02:25.400 We spent a lot of time, beautiful city, great 00:02:25.400 --> 00:02:28.500 hotels, awesome food. And we go to Bonham, Texas, 00:02:28.599 --> 00:02:31.060 and we go out to visit the site. And the site 00:02:31.060 --> 00:02:33.120 had done a nice job of booking a hotel for us, 00:02:33.139 --> 00:02:35.719 so we didn't have to find a hotel. Number one, 00:02:35.759 --> 00:02:37.780 we had a fast food restaurant that also doubled 00:02:37.780 --> 00:02:39.979 as a grocery store for lunch. And then we get 00:02:39.979 --> 00:02:41.719 to the hotel. And for those that are aware of 00:02:41.719 --> 00:02:45.060 the hotel America's Best, which is... Not to 00:02:45.060 --> 00:02:47.520 shame anybody, but America's worst. It was a 00:02:47.520 --> 00:02:50.740 pretty bad hotel to the point that really uncomfortable, 00:02:51.120 --> 00:02:54.879 not a great area. Well, as a team decided, well, 00:02:54.900 --> 00:02:56.020 we're not going to stay there again. We'll do 00:02:56.020 --> 00:02:57.879 it to make the target happy, but we're going 00:02:57.879 --> 00:03:00.479 to not stay there again. So we commuted an hour 00:03:00.479 --> 00:03:02.879 and 20 minutes about every single day there and 00:03:02.879 --> 00:03:06.139 back. So two and a half hours every day to go 00:03:06.139 --> 00:03:08.740 to this little town to integrate this business. 00:03:09.300 --> 00:03:11.840 The other memory I have from that business is 00:03:11.840 --> 00:03:14.360 they took a break. Every couple hours. It was 00:03:14.360 --> 00:03:16.740 a manufacturing facility. And they would go and 00:03:16.740 --> 00:03:19.599 drink Monster by the back door. And I remember 00:03:19.599 --> 00:03:21.659 I had never had a Monster before. Not something 00:03:21.659 --> 00:03:23.419 I'd ever had. And it was the old big ones with 00:03:23.419 --> 00:03:24.819 the screw top. If you remember that one, Mike. 00:03:25.080 --> 00:03:27.860 And so I went through a rough period, man. I 00:03:27.860 --> 00:03:30.650 went through a Monster phase. where i was drinking 00:03:30.650 --> 00:03:33.770 monster driving two and a half hours working 00:03:33.770 --> 00:03:35.569 in the middle of nowhere texas that integration 00:03:35.569 --> 00:03:38.650 i i was like i want that la jolla business back 00:03:38.650 --> 00:03:41.129 how do i get to that la jolla life so uh yeah 00:03:41.129 --> 00:03:43.250 man we don't go to the always the best and nicest 00:03:43.250 --> 00:03:44.909 cities when we're trying to integrate but i'll 00:03:44.909 --> 00:03:48.000 tell you what's the population of bottom Well, 00:03:48.000 --> 00:03:50.240 calling back to another episode, Mike, I'd have 00:03:50.240 --> 00:03:52.979 to use Chad GPT and some AI to serve up that 00:03:52.979 --> 00:03:55.919 answer. But I would say great people, man. I 00:03:55.919 --> 00:03:57.979 also gained a ton of weight because some very 00:03:57.979 --> 00:04:00.780 hearty meals, cookouts in the parking lot. Let 00:04:00.780 --> 00:04:02.819 me tell you, the worse the town, the better the 00:04:02.819 --> 00:04:04.599 people, I feel. And so it was a great time to 00:04:04.599 --> 00:04:06.759 make some great contacts. I still talk to some 00:04:06.759 --> 00:04:08.659 of those folks today, but not my favorite city 00:04:08.659 --> 00:04:11.000 by any means. How about you? Actually, can I 00:04:11.000 --> 00:04:13.460 ask you? That was such a long answer. We might 00:04:13.460 --> 00:04:18.129 have to make that its own episode. I didn't know 00:04:18.129 --> 00:04:23.910 I'd ask for a novel. My favorite, most interesting 00:04:23.910 --> 00:04:26.949 place I ever did an integration was Rattlesnake 00:04:26.949 --> 00:04:33.069 Bayou, Alabama. Oh, wow. I'll make my story much 00:04:33.069 --> 00:04:36.550 more brief and just say it lived up to its name. 00:04:37.509 --> 00:04:41.250 That was a good one. Rattlesnake Bayou. I don't 00:04:41.250 --> 00:04:42.730 know who came up with that name, but they named 00:04:42.730 --> 00:04:44.230 it right. We'll just leave it at that. I'm looking 00:04:44.230 --> 00:04:50.310 it up right now. So let's jump in. Let's talk 00:04:50.310 --> 00:04:54.569 about integrations. And let's talk about where 00:04:54.569 --> 00:04:58.910 bad integration hurts the most. What usually 00:04:58.910 --> 00:05:02.389 goes wrong first? Trials and tribulations, lessons 00:05:02.389 --> 00:05:04.509 learned. Get us started down that path, James. 00:05:05.170 --> 00:05:09.290 Yeah, so I think we... And to call back to another 00:05:09.290 --> 00:05:11.870 episode, but to just baseline, Travista does 00:05:11.870 --> 00:05:15.889 a lot of work in the PMI space after some M &A 00:05:15.889 --> 00:05:18.069 event, whether that's private equity, whether 00:05:18.069 --> 00:05:20.050 that's a large corporation that's a publicly 00:05:20.050 --> 00:05:22.769 traded entity that's carving out a piece of its 00:05:22.769 --> 00:05:25.750 business. We deal on both sides. So think carve 00:05:25.750 --> 00:05:29.029 out in or M &A come together. And so we work 00:05:29.029 --> 00:05:32.430 on both sides of that. I think where we see some 00:05:32.430 --> 00:05:34.170 of the challenges and where we're brought in 00:05:34.170 --> 00:05:37.139 to help a lot of times. or kind of shore folks 00:05:37.139 --> 00:05:38.759 up because they've already kind of begun the 00:05:38.759 --> 00:05:42.600 process. Number one is where I buy these two 00:05:42.600 --> 00:05:44.420 businesses because I like these two businesses. 00:05:44.459 --> 00:05:46.980 These businesses work well. I don't want to do 00:05:46.980 --> 00:05:49.300 harm to these businesses. But unfortunately, 00:05:49.360 --> 00:05:51.600 as I start to bring them together, I may make 00:05:51.600 --> 00:05:54.040 some decisions that cause some operational disruption. 00:05:54.699 --> 00:05:57.360 or cause challenges to the business. This could 00:05:57.360 --> 00:06:00.019 be by bad systems. As an IT individual, we see 00:06:00.019 --> 00:06:02.439 that a lot. This could be operational inefficiencies. 00:06:02.980 --> 00:06:05.040 Frankly, a lot of times we see you make a Salesforce 00:06:05.040 --> 00:06:06.920 change in the field. Let's say you have a field 00:06:06.920 --> 00:06:09.959 rep team and you make that change. It could disrupt 00:06:09.959 --> 00:06:12.040 those businesses. So one of the first things 00:06:12.040 --> 00:06:14.180 you can do is disrupt the two great entities 00:06:14.180 --> 00:06:16.720 that function today because we all go into these 00:06:16.720 --> 00:06:19.319 with the hope that we can drive synergies, become 00:06:19.319 --> 00:06:21.540 a better business, drive out costs, and become 00:06:21.540 --> 00:06:25.160 a better combined entity. It can go. wrong. The 00:06:25.160 --> 00:06:27.779 second one, I don't know if we've talked about 00:06:27.779 --> 00:06:29.240 this one before, Mike, maybe we should do a future 00:06:29.240 --> 00:06:32.079 episode on this. There's a recruiting arm at 00:06:32.079 --> 00:06:35.639 Trivisa that helps companies find individuals 00:06:35.639 --> 00:06:38.199 at executive levels within their practices or 00:06:38.199 --> 00:06:42.459 firms or companies. And so we actually do a lot 00:06:42.459 --> 00:06:44.240 of time helping with this challenge, which is 00:06:44.240 --> 00:06:47.060 the talent flight. So we know when we go in and 00:06:47.060 --> 00:06:48.980 we do a diligence, we look for key man risk and 00:06:48.980 --> 00:06:50.560 we indicate those key man risks. But sometimes 00:06:50.560 --> 00:06:53.360 folks leave, whether it's the team that owned 00:06:53.360 --> 00:06:56.199 the business and they transition out or talent 00:06:56.199 --> 00:06:58.959 at the business because maybe they had a windfall 00:06:58.959 --> 00:07:01.139 or a good financial outcome due to the transaction. 00:07:01.439 --> 00:07:03.899 And so they leave. There's a lot of times that 00:07:03.899 --> 00:07:06.290 that talent comes out and then the... businesses 00:07:06.290 --> 00:07:09.009 scrambling to figure out how to shore that up. 00:07:09.129 --> 00:07:10.550 Because not only are you trying to get these 00:07:10.550 --> 00:07:12.449 entities figured out, you're also making up for 00:07:12.449 --> 00:07:15.170 the talent side. And then the last one is, and 00:07:15.170 --> 00:07:16.949 this is something maybe you can talk about here 00:07:16.949 --> 00:07:19.129 in a second from a financial perspective, is 00:07:19.129 --> 00:07:21.870 this idea of these synergies and these kind of 00:07:21.870 --> 00:07:24.810 financial synergies. Going into this deal, no 00:07:24.810 --> 00:07:27.050 PE firm or no business is going to go into a 00:07:27.050 --> 00:07:29.430 deal blind. They're going to build a model. they're 00:07:29.430 --> 00:07:31.410 going to have an expectation of excellence, and 00:07:31.410 --> 00:07:32.889 they're going to have an expectation of outcome. 00:07:33.129 --> 00:07:34.970 So you're going to have those conversations up 00:07:34.970 --> 00:07:36.470 front. You're going to know what you want to 00:07:36.470 --> 00:07:39.610 do. And if you don't or you can't materialize 00:07:39.610 --> 00:07:41.709 those kind of changes, whether it be from the 00:07:41.709 --> 00:07:44.129 systems, from the team, or from the process, 00:07:44.329 --> 00:07:46.649 and you can't hit those synergies, at the end 00:07:46.649 --> 00:07:49.029 of the day, it affects the bottom line. So maybe 00:07:49.029 --> 00:07:50.810 we could take that, Mike, and maybe that's somewhere 00:07:50.810 --> 00:07:52.370 you can come in because you know much more about 00:07:52.370 --> 00:07:55.009 this than I do, where those kind of poor synergies 00:07:55.009 --> 00:07:58.110 or bad impacts affect the financials and kind 00:07:58.110 --> 00:08:00.060 of... disrupt the deal a little bit, or at least 00:08:00.060 --> 00:08:02.860 the idea of what the deal was going to be. Yeah, 00:08:02.920 --> 00:08:04.480 absolutely. Well, I'll build on the comment that 00:08:04.480 --> 00:08:07.899 you made about talent flight. If you lose the 00:08:07.899 --> 00:08:09.540 wrong people in the business that you're buying, 00:08:09.680 --> 00:08:12.160 or you didn't disenfranchise some of the folks 00:08:12.160 --> 00:08:14.639 on the team that you're already running, huge 00:08:14.639 --> 00:08:16.519 costs can be associated with that, you know, 00:08:16.519 --> 00:08:18.259 especially if you start losing high performers 00:08:18.259 --> 00:08:21.100 who think that maybe they weren't involved in 00:08:21.100 --> 00:08:23.060 kind of the strategic decision making process 00:08:23.060 --> 00:08:27.019 behind acquiring this, this other company. Maybe 00:08:27.019 --> 00:08:29.980 they feel like they get exposure to comp models 00:08:29.980 --> 00:08:32.659 now that are very different, and they're kind 00:08:32.659 --> 00:08:35.379 of realizing that, hey, maybe I should have been 00:08:35.379 --> 00:08:36.899 making a lot more money than I was all these 00:08:36.899 --> 00:08:38.919 years. It could be any number of different things. 00:08:39.000 --> 00:08:43.059 You start losing key people, that's a major hit 00:08:43.059 --> 00:08:44.860 to the bottom line, right? And that could be 00:08:44.860 --> 00:08:47.340 at your current company or at the target, the 00:08:47.340 --> 00:08:49.580 business that you're acquiring. So I think about 00:08:49.580 --> 00:08:51.600 things like talent flight, like you mentioned. 00:08:51.679 --> 00:08:54.940 I think about margin erosion. Many times people 00:08:54.940 --> 00:08:59.059 are going to model in, lots of synergies in these 00:08:59.059 --> 00:09:00.399 deals. They're going to say, Hey, look, we're 00:09:00.399 --> 00:09:02.080 going to bring company A and company B together. 00:09:02.139 --> 00:09:04.860 And we don't need 15 salespeople anymore. We 00:09:04.860 --> 00:09:07.000 only need 13. So, you know, we get some headcount 00:09:07.000 --> 00:09:09.620 reductions and some cost savings for starters, 00:09:09.679 --> 00:09:12.740 unless you have a very robust plan. It's pretty 00:09:12.740 --> 00:09:14.500 simple when you're talking about two salespeople, 00:09:14.519 --> 00:09:15.799 when you're talking about larger enterprises, 00:09:15.919 --> 00:09:18.629 you could be talking about. integration synergies 00:09:18.629 --> 00:09:21.350 across the sales team, the marketing team, the 00:09:21.350 --> 00:09:24.970 back office, finance, IT, reduction in licenses 00:09:24.970 --> 00:09:29.730 on the IT side, purchasing power and trying to 00:09:29.730 --> 00:09:32.809 drive purchase price reductions because now you're 00:09:32.809 --> 00:09:34.529 spending more with certain suppliers. I mean, 00:09:34.529 --> 00:09:36.269 it could cascade across manufacturing distribution, 00:09:36.389 --> 00:09:38.169 really cascade across the whole business. If 00:09:38.169 --> 00:09:41.610 you don't have really robust kind of day one 00:09:41.610 --> 00:09:45.470 communication plans, day one. implementation 00:09:45.470 --> 00:09:47.549 and integration plans, if you haven't appointed 00:09:47.549 --> 00:09:50.070 somebody who's really responsible for waking 00:09:50.070 --> 00:09:52.149 up every day for the next couple of years and 00:09:52.149 --> 00:09:55.149 running all those costs out of the business and 00:09:55.149 --> 00:09:58.309 driving those synergies, you stand to not realize 00:09:58.309 --> 00:10:00.389 many of the synergies that you expected at the 00:10:00.389 --> 00:10:03.779 onset, right? And quite frankly, Not that I would 00:10:03.779 --> 00:10:05.759 label this necessarily a crisis, but we have 00:10:05.759 --> 00:10:08.659 a saying, never waste a crisis, right? Never 00:10:08.659 --> 00:10:12.000 waste the opportunity when there's a lot of things 00:10:12.000 --> 00:10:15.480 going on to execute flawlessly, maybe make a 00:10:15.480 --> 00:10:18.039 couple of mistakes along the way. But if you're 00:10:18.039 --> 00:10:19.980 going to go and do M &A and part of the logic 00:10:19.980 --> 00:10:22.960 is driving for synergies, you better be very 00:10:22.960 --> 00:10:25.039 focused on driving and achieving those. And I 00:10:25.039 --> 00:10:27.980 think one of the things that we find... oftentimes 00:10:27.980 --> 00:10:30.759 a letdown is that people don't realize as many 00:10:30.759 --> 00:10:33.419 synergies as they originally modeled. We tend 00:10:33.419 --> 00:10:35.940 to find that that's oftentimes a function of 00:10:35.940 --> 00:10:38.580 lack of good old -fashioned project planning 00:10:38.580 --> 00:10:42.200 and tough decision -making and staying on top 00:10:42.200 --> 00:10:44.980 and holding teams accountable to actually going 00:10:44.980 --> 00:10:46.320 and doing what we all agreed we were going to 00:10:46.320 --> 00:10:48.700 do in the first place with these deals. Then 00:10:48.700 --> 00:10:50.720 you can get into things like customers. where 00:10:50.720 --> 00:10:53.179 day one planning and even day zero planning is 00:10:53.179 --> 00:10:55.480 critically important. How are we going to announce 00:10:55.480 --> 00:10:57.659 this to the market? If it's not well received 00:10:57.659 --> 00:11:00.200 and one of your largest customers decides, geez, 00:11:00.279 --> 00:11:01.759 I don't like what's going on over there now, 00:11:01.899 --> 00:11:05.500 that could be a major revenue and margin hit 00:11:05.500 --> 00:11:08.200 to the business. So all different kinds of margin 00:11:08.200 --> 00:11:10.460 erosion, if you're not implementing appropriately, 00:11:10.919 --> 00:11:13.500 you've got customer loss, you've got employee 00:11:13.500 --> 00:11:15.700 challenges. And also, quite frankly, there's 00:11:15.700 --> 00:11:17.340 a lot of brand damage that can be done, right? 00:11:17.950 --> 00:11:19.889 And you got to be very thoughtful about brands, 00:11:20.009 --> 00:11:22.370 right? You may have a brand in your current company. 00:11:22.389 --> 00:11:24.490 You may be buying a company with a solid brand. 00:11:24.669 --> 00:11:26.610 Maybe you're buying a company with a weaker brand. 00:11:27.049 --> 00:11:28.990 Figuring out what the right strategy is to kind 00:11:28.990 --> 00:11:31.750 of go to market on a go -forward basis, being 00:11:31.750 --> 00:11:34.450 thoughtful about the communication path, actually 00:11:34.450 --> 00:11:37.429 integrating. the tools and the systems. So you 00:11:37.429 --> 00:11:39.470 actually kind of look out in the marketplace 00:11:39.470 --> 00:11:42.269 as if you're one company now together, not doing 00:11:42.269 --> 00:11:44.009 any of those things. Well, number one is typically 00:11:44.009 --> 00:11:45.450 going to drive a lot of costs in the business, 00:11:45.490 --> 00:11:47.029 but also not doing any of those things. Well, 00:11:47.110 --> 00:11:49.389 could actually hurt your brand long term or hurt 00:11:49.389 --> 00:11:52.250 your employee relationships long term or what 00:11:52.250 --> 00:11:55.129 have you. So a lot of real financial impacts. 00:11:55.799 --> 00:11:57.879 can come out of poor integration. And, you know, 00:11:57.899 --> 00:12:00.200 we tend to work with a lot of companies that 00:12:00.200 --> 00:12:02.460 maybe they've done M &A in the past. Maybe they 00:12:02.460 --> 00:12:03.879 haven't done M &A in the past and it's their 00:12:03.879 --> 00:12:06.460 first time. So in many cases, you could be dealing 00:12:06.460 --> 00:12:08.360 with management teams that haven't had a lot 00:12:08.360 --> 00:12:09.779 of experience doing that. And it's important 00:12:09.779 --> 00:12:11.700 to equip them with the appropriate resources 00:12:11.700 --> 00:12:14.659 and tool sets with which to execute on them. 00:12:14.720 --> 00:12:16.980 Because otherwise, why are you making your life 00:12:16.980 --> 00:12:19.399 that much more complicated in the first place, 00:12:19.500 --> 00:12:22.360 right? If you're not going to kind of go after 00:12:22.360 --> 00:12:24.659 it and attack it aggressively, maybe rethink 00:12:24.659 --> 00:12:27.710 it. Yeah, and to read another chapter from my 00:12:27.710 --> 00:12:29.889 novel from earlier for that plant in bottom. 00:12:30.169 --> 00:12:32.070 Do we have enough, producer Matt, do we have 00:12:32.070 --> 00:12:36.830 enough time? The brand damage side. So this plant 00:12:36.830 --> 00:12:39.779 at a bottom was acquired. by a company out of 00:12:39.779 --> 00:12:42.840 Mexico. And we manufactured in Bonham, Texas, 00:12:42.960 --> 00:12:45.519 right? It was a manufacturing facility. And after 00:12:45.519 --> 00:12:47.720 the acquisition got out, news got to the local 00:12:47.720 --> 00:12:50.139 area like, oh, they're acquired by a Mexican 00:12:50.139 --> 00:12:53.179 company. And so the rumor was, oh, well, they're 00:12:53.179 --> 00:12:55.740 moving all their manufacturing to Mexico, which 00:12:55.740 --> 00:12:57.820 actually we're moving manufacturing from Mexico 00:12:57.820 --> 00:13:01.100 to this plant to help with capacity. And so we 00:13:01.100 --> 00:13:03.740 had done poor planning, poor communication, and 00:13:03.740 --> 00:13:06.000 poor articulation of that to our clients and 00:13:06.000 --> 00:13:08.429 did cause some brand damage. It actually caused 00:13:08.429 --> 00:13:11.029 quite a hearty dip in sales. So you are 1000 00:13:11.029 --> 00:13:12.690 % correct that that's something that needs to 00:13:12.690 --> 00:13:14.950 be contemplated and really work through and not 00:13:14.950 --> 00:13:17.730 just assume that everyone will know. Yeah, absolutely. 00:13:18.629 --> 00:13:23.629 So James, I talked about what can go wrong. How 00:13:23.629 --> 00:13:26.210 do you get it right? Yeah. How do you start off 00:13:26.210 --> 00:13:28.190 on the right foot? I love what you said, Mike. 00:13:28.350 --> 00:13:31.120 Day zero planning. A lot of people focus on that 00:13:31.120 --> 00:13:33.360 first day. There's a lot of upfront work that 00:13:33.360 --> 00:13:35.799 can happen. One of my favorite things is when 00:13:35.799 --> 00:13:39.039 clients have us do a diligence on an entity that 00:13:39.039 --> 00:13:42.379 they plan to acquire and then either bolt on 00:13:42.379 --> 00:13:44.559 or build as a platform and bring another business 00:13:44.559 --> 00:13:46.820 together, almost like two platforms coming together. 00:13:46.940 --> 00:13:49.779 And they call us after that and say, let's get 00:13:49.779 --> 00:13:52.139 planning. Let's start tomorrow on what this integration 00:13:52.139 --> 00:13:54.399 looks like. So that early integration planning, 00:13:54.600 --> 00:13:57.509 starting immediately. even a little bit in due 00:13:57.509 --> 00:13:59.889 diligence or pretty dang close after diligence, 00:14:00.090 --> 00:14:03.090 really helps set that tone, really opens up conversation. 00:14:03.370 --> 00:14:05.450 Obviously, it has to be proxied by legal and 00:14:05.450 --> 00:14:07.629 make sure it's okay for the deal cycle, how much 00:14:07.629 --> 00:14:10.029 you share, where you share, why you share, all 00:14:10.029 --> 00:14:12.129 needs to be reviewed. But you can start a lot 00:14:12.129 --> 00:14:15.509 of those things in day zero. I think having honest 00:14:15.509 --> 00:14:17.610 conversations with your leadership team and making 00:14:17.610 --> 00:14:20.330 sure they're aligned. Again, within reason and 00:14:20.330 --> 00:14:23.250 protected conversations to say, here's our plan, 00:14:23.350 --> 00:14:25.779 here's what we're doing. Oftentimes I see failed 00:14:25.779 --> 00:14:27.440 integrations when we're going to do a diligence 00:14:27.440 --> 00:14:29.679 and part of our diligence is the ownership's 00:14:29.679 --> 00:14:32.340 group is asking us in the diligence, what do 00:14:32.340 --> 00:14:33.620 you think they're going to do with us after they 00:14:33.620 --> 00:14:36.600 acquire us? If we hear that question, we know 00:14:36.600 --> 00:14:38.679 there's a misalignment and probably the message 00:14:38.679 --> 00:14:40.559 hasn't been shared in the right way. So that 00:14:40.559 --> 00:14:42.519 management team understands. A lot of times the 00:14:42.519 --> 00:14:44.480 ownership group understands, but not that middle 00:14:44.480 --> 00:14:47.279 management team. And then the last one, which 00:14:47.279 --> 00:14:49.639 is something we always say in any project, which 00:14:49.639 --> 00:14:51.360 by the way, I love your shout out on poor project 00:14:51.360 --> 00:14:53.720 management sets you up for poor success. It is 00:14:53.720 --> 00:14:56.779 1000 % true. But the other thing is, how do I 00:14:56.779 --> 00:14:59.259 get quick wins? How do I find things that are 00:14:59.259 --> 00:15:01.299 very simple? So one of the things that we see 00:15:01.299 --> 00:15:03.200 a lot of times on a quick win that gets people 00:15:03.200 --> 00:15:06.139 working together, gets conversations going, and 00:15:06.139 --> 00:15:08.879 it's a low risk is indirect procurement. Something 00:15:08.879 --> 00:15:10.860 as silly as like, hey, we all have paper towels. 00:15:11.059 --> 00:15:14.700 We all buy from Grainger. Let's... a line on 00:15:14.700 --> 00:15:17.220 a procurement of indirect that we can make sure 00:15:17.220 --> 00:15:19.320 we get those materials. We can start to work 00:15:19.320 --> 00:15:21.139 on that together. Again, it's not going to really 00:15:21.139 --> 00:15:23.340 super disrupt the business. It's a chance for 00:15:23.340 --> 00:15:25.259 us to partner. It's a chance for us to figure 00:15:25.259 --> 00:15:27.279 out a group rate so we can lower some prices. 00:15:27.460 --> 00:15:29.639 And it's a good place to experiment before you 00:15:29.639 --> 00:15:31.059 start getting in the tougher things of like, 00:15:31.120 --> 00:15:33.460 how do I combine manufacturing facilities? How 00:15:33.460 --> 00:15:36.720 do I centralize my call center? Those are tougher 00:15:36.720 --> 00:15:39.440 and more kind of frothy challenges. Whereas I 00:15:39.440 --> 00:15:41.379 can get some quick wins, build that confidence 00:15:41.379 --> 00:15:43.279 on the team and kind of drive that inertia. to 00:15:43.279 --> 00:15:46.960 those larger challenges like ERP, CRM, or some 00:15:46.960 --> 00:15:48.720 of the sales things we've discussed on here. 00:15:48.820 --> 00:15:51.100 So I think those type of things for me is start 00:15:51.100 --> 00:15:53.879 talking soon, bring everyone along for the journey, 00:15:53.940 --> 00:15:58.159 and get some quick wins. Yep, absolutely. So 00:15:58.159 --> 00:16:02.919 James, before we wrap up, we got some two -bit 00:16:02.919 --> 00:16:06.000 trivia, I think, here today. All right. You want 00:16:06.000 --> 00:16:07.899 to ask her? You want me to make up something? 00:16:08.039 --> 00:16:09.299 You got something already figured out? Yeah, 00:16:09.799 --> 00:16:12.779 I prep for these. I prep for these. Oh, no, man. 00:16:12.919 --> 00:16:16.480 All right, here we go. You know, chat, my buddy 00:16:16.480 --> 00:16:22.320 GPT and I, we prep for these. Perfect. So this 00:16:22.320 --> 00:16:23.440 one's pretty basic. I think you're going to get 00:16:23.440 --> 00:16:26.039 this one. What is the average timeline that experts 00:16:26.039 --> 00:16:29.279 recommend to fully integrate an acquired company? 00:16:30.940 --> 00:16:33.299 So we preach don't go too quickly because you 00:16:33.299 --> 00:16:35.139 could break things that do no harm clause. So 00:16:35.139 --> 00:16:39.740 I'm going to go probably a year to 18 months 00:16:39.740 --> 00:16:41.799 time frame. So you still kind of know them, but 00:16:41.799 --> 00:16:43.980 you're not taking too long. So I don't know, 00:16:44.019 --> 00:16:46.700 one year to 18 months. Well, even though you're 00:16:46.700 --> 00:16:49.919 close, this just proves you're not as smart as 00:16:49.919 --> 00:16:55.139 ChatGPT. But experts say 12 to 24 months. So 00:16:55.139 --> 00:16:57.740 we'll give you like two thirds of a point there. 00:16:58.090 --> 00:16:59.549 Are we keeping points? Is that how the system 00:16:59.549 --> 00:17:02.070 goes? Well, it's one to two thirds then if we 00:17:02.070 --> 00:17:03.450 are keeping points because I do have my little 00:17:03.450 --> 00:17:06.589 scoreboard here. Yeah. And I think the logic 00:17:06.589 --> 00:17:10.289 there is if you're moving faster than that, you're 00:17:10.289 --> 00:17:12.609 probably not integrating the businesses, right? 00:17:13.069 --> 00:17:14.869 Could be leaving money on the table. Who knows? 00:17:14.890 --> 00:17:17.130 Depends on the integration. But you certainly 00:17:17.130 --> 00:17:19.410 probably haven't integrated fully the two companies 00:17:19.410 --> 00:17:21.710 or maybe that was more like a tuck in, maybe 00:17:21.710 --> 00:17:23.569 about a product line and three or four months 00:17:23.569 --> 00:17:26.210 in, you've got it. integrated into your facility. 00:17:26.390 --> 00:17:29.789 But 12 to 24 months is the guidance, which also 00:17:29.789 --> 00:17:33.269 I think has been my experience. So good reminder, 00:17:33.430 --> 00:17:36.250 takes planning. My comment about day zero planning, 00:17:36.410 --> 00:17:38.710 super important. Day one planning, even more 00:17:38.710 --> 00:17:41.190 important. Making sure that you're engaging the 00:17:41.190 --> 00:17:43.809 team and holding the team accountable to delivering 00:17:43.809 --> 00:17:47.400 it. Yeah, I love it. Yeah, this is something 00:17:47.400 --> 00:17:48.900 that's squarely in our wheelhouse. So we talk 00:17:48.900 --> 00:17:51.140 to clients all the time. So hey, if you have 00:17:51.140 --> 00:17:52.819 a question or want to learn more, reach out to 00:17:52.819 --> 00:17:55.539 Mike or I directly. We appreciate when our listeners 00:17:55.539 --> 00:17:58.720 listen. When they listen and they reach out, 00:17:58.779 --> 00:18:01.099 we appreciate both. But thanks for tuning in 00:18:01.099 --> 00:18:02.480 to Growing EBITDA. By the way, you're assuming 00:18:02.480 --> 00:18:05.839 they listen. Hey, hey, we got numbers now. Listen 00:18:05.839 --> 00:18:08.259 or reach out. Either one, it's fine. Yeah, we 00:18:08.259 --> 00:18:10.619 got numbers. But hey, subscribe to Growing EBITDA 00:18:10.619 --> 00:18:12.099 and we look forward to connecting in the next 00:18:12.099 --> 00:18:15.240 couple of weeks. Thanks for tuning into this 00:18:15.240 --> 00:18:17.940 episode of Growing EBITDA. 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