How To Introduce Yourself
Here is something that caught our eye this week:
That’d Be Great, Mmmkay?
There’s a lot of work that goes into closing a deal. You have to find a business, figure out if you’re interested, convince the owner you’re the right fit, agree on a price, conduct diligence, negotiate legal terms, and secure financing, among many other things.
Then, as the close date looms, it may occur to you while you’re knee-deep negotiating legal documents that at best, you actually know only a small handful of people in the business and that the vast majority of employees are unaware a transaction is about to take place. As a result, introducing the transaction to the newly acquired business is something that deserves careful thought and consideration. However, in the midst of deal-making, this important step is often overlooked and risks being done with the pizzazz of the boss in Office Space.
While we are not perfect, we have developed some parameters for how we approach these transitions. We first discuss with the seller how and when they want to announce the transaction. Some owners are comfortable making an announcement before the sale officially happens, others are not. Some want an announcement in the local press; others prefer to fly under the radar. Some like to take their senior leadership team out to dinner to deliver the news without us there, others want us to participate in an introductory meeting. Some have no opinion whatsoever. To some degree, we are happy to follow the seller’s lead.
When it comes to how we integrate into the company, though, we do have our preferences. We prefer to have an in-person introduction to senior management, followed by a company-wide announcement. Since we are typically putting new leadership in place, it’s incumbent on the new CEO to set the stage in these first meetings and put people at ease. She must communicate who she is, what she cares about, why Chenmark purchased the company, what’s going to happen, and–critically–what’s not going to happen from that point on.
Above all, we prefer new CEOs to spend their early days listening–to employees, customers, and vendors–before they make big decisions or set a strategic plan. One-on-ones with employees, in particular, are an excellent way to both build rapport and learn about the company at a level of depth that is frankly impossible during diligence. And when it comes to small businesses, meeting with every employee is not just feasible, but warranted. These open-ended conversations throughout the organization highlight what is going well, what’s not going well, and the direction the team will be heading. It is the starting point of the next phase of the company’s evolution.
Now, this is the ideal scenario. The first couple of months for a new CEO can be overwhelming, so it’s imperative that she sets aside time to make this happen. A recent post by venture capitalist Fred Wilson highlights the importance of that first interaction:
“That first all-hands meeting is a critical moment for the new CEO. He/she needs to connect with the team, tell them who they are, what they care about, and, most importantly, where they are going to lead the Company….calm, confident, assured leadership is what is needed. But it also critical to show empathy for the team and humanity in the leader. A warm smile and a sense of humor can help a lot. When explaining where they will take the Company, less is more. Companies cannot do that many things at the same time. Failed leadership often results in doing too many things. So a shortlist of things that the Company will do and a longer list of things that it will not do anymore is a great start for a new leader…You must start off by being honest with the team. Anything else will doom you to failure. Getting off on the right foot is so important. If you do it well, the team will rally around you. If you do it poorly, you are done before you even started.”
We agree completely. While trust is built over time, getting off on the right foot goes a long way toward establishing rapport, so avoid approaching these meetings like the Bobs. For any new CEO–whether it be for a billion dollar start-up or small, local business–taking time to think through how you are introducing yourself to your new team is time well spent.
Have a great week,
Your Chenmark Team