I Lead a Company Built Through Decades of Acquisitions. Here’s a Key to Making Them Successful

Despite the fanfare that often accompanies acquisitions, the reality is that about 80% fail to achieve their desired objectives.

After all, there’s a lot that can go wrong. Inadequate due diligence. Overvaluation. Poor integration planning and execution. A failure to retain employees from the new company.

And yet, businesses spend more than $2 trillion on acquisitions annually. Why? It’s often unrealistic for a company to build all that’s needed to reach its strategic goals fast enough to remain competitive. An acquisition, however, presents an opportunity to quickly expand a business’s ecosystem, tapping into new relationships, distribution channels, products and innovations.

I lead an entertainment technology company — composed of iconic brands like TiVo and DTS — that has grown our ecosystem through 15 acquisitions in the last decade alone. What has the experience taught me?

The success of an acquisition is about more than the nuts and bolts of the deal itself; you’re not just buying a technology, product or service to tack onto your company offerings. You’re also gaining institutional knowledge and bringing thought leaders on board who could help steer your business.

I believe one of the most critical aspects of an acquisition’s success is too often overlooked: the people. Here’s what I’ve learned about how they can be the difference-makers in the lead-up to and aftermath of a deal.

Related: 5 Reasons Small Businesses Should Consider Mergers and Acquisitions

The “why” has to include the “who”

Sure, pre-deal due diligence involves evaluating the potential profits and risks of an acquisition. But it also requires searching for leaders, along with the systems and cultures they’ve developed, that are likely to contribute to your company’s growth.

In dynamic industries like tech, companies often need to pivot to remain competitive. That means it’s essential to ask this question when evaluating incoming leaders: Whose strategic thinking, leadership skills and decision-making style do you want on your side, even if you end up shifting them to new areas in the future?

We learned the importance of this consideration from an early acquisition. The technology we’d bought eventually became outdated, but that CEO has remained an instrumental member of our leadership suite for more than a decade, and an acquired team under his leadership has transitioned to form the foundation of one the most exciting arms of our business: our connected car platform.

Once you’ve found a company with the resources and people that will likely benefit your business and conditions enable sensible valuations, developing an integration plan before the deal closes is imperative.

We accomplish this by identifying change champions — committed leaders who are strong communicators, open to feedback, adaptable, resilient and collaborative — from both companies to rally our people. Then, we create detailed checklists for the first year or more, often including thousands of line items from assigning desks to implementing training events, all to move us swiftly toward our goals of a fully integrated team and business asset.

Related: How Leaders Can Build Acquisition-Ready Companies

Use it as an opportunity to reimagine culture

Many people see an acquisition as an opportunity to innovate — adding and evolving products and developing strategies for new markets. One thing they often overlook, though, is the chance to innovate company culture. Specifically, to pick and choose the best of both of what the companies are doing to establish a new normal.

Often, the default assumption is that the acquiring company’s culture will remain dominant. But that can sometimes be a mistake.

Many times, bringing two companies together and fusing their resources and operations creates an entirely new company — one that may benefit from a cultural change.

For example, following a merger, we realized our previous corporate values no longer accurately reflected the new company. So we reset them. It wasn’t always easy: It took a long-term project involving employee input throughout. It also required objectivity at the leadership level to stay open to new ways of working and communicating. However, the initiative resulted in a set of values that more meaningfully illustrated our evolved mission and culture and set us on a path toward greater success.

Related: How to Create a High-Performance Organization Through a Successful Merger

Move as quickly and transparently as possible

A deal closing can feel like crossing the finish line for those overseeing it. But when you look over your shoulder, you see that most employees are just lining up at the start. The real marathon begins after the closing: It takes steady work to get the rest of the company across the finish line to reap the anticipated gains of the deal.

We’ve found that approaching this integration process with a focus on urgency, sensitivity and transparency is key to retaining as many employees as possible, along with the crucial institutional knowledge and skills they hold.

This means we work fast to communicate our plan openly and honestly. For instance, within 45 days of a recent acquisition, we got leaders physically in front of 80% of the team. This approach aims to mitigate uncertainty by laying out plans and providing clarity on roles and opportunities. Research shows that transparency can engender trust, so when the answer to a question is, “We don’t know yet,” leaders should prioritize being upfront about that.

We also expressed empathy. Acknowledging that it’s natural to feel anxious about uncertainty and change is important to build morale during a time of transition.

About a third of employees from an acquired company tend to leave within the first year due to uncertainty or culture clashes. But time and time again, we’ve seen that a deliberate process has helped to improve on this trend. While it’s not always possible for all employees to stay on, voluntary turnover within a year of our last two acquisitions was just 15%.

Defining success

There are many ways to define a successful acquisition: meeting financial goals, expanding relationships or staking a hold in new markets. We’ve seen this firsthand. For example, strategic acquisitions have allowed our business to significantly amplify our global footprint of streaming devices and open up new monetization opportunities.

While these elements are critically important, we view success even more broadly. It also means our team feels they’re continuously working toward a worthy goal. And viewing people as vital to the success of an acquisition has helped us to assemble a team prepared and motivated to do just that: deliver innovative, extraordinary experiences to our customers.