The Acquisition Spreadsheet Has a People Problem

An acquisition can be beautifully logical.

The revenue is attractive. The locations fill a gap. The customer list looks promising. The lawyers have done their work, and the spreadsheet suggests that the future will be both profitable and reassuringly colour coded.

Then the project manager leaves.

The engineer follows. A salesperson starts taking calls. The customer who supposedly belonged to the business turns out to have been rather attached to the people who delivered its work.

The spreadsheet does not have a particularly good answer to that.

My conversation with John Laughlin, owner, president and CEO of CTI, was ostensibly about his career and the growth of an audiovisual integration business. In practice, it became a discussion about what a company actually consists of.

John's answer gives the people doing the work rather more importance than the logo on their shirts.

The career plan was to leave

John did not describe arriving in AV with a master plan to build a substantial integration business.

He was interested in restaurants. He had worked in them, liked the pace and understood the operating model. A move to St. Louis and the realities of family life made the working hours less attractive.

An accounting job at Conference Technologies looked like a useful stepping stone. He expected to move on.

Instead, he became interested in the work around him: installing equipment, supporting events, managing projects and serving customers. He describes finding enough variety to engage both his practical skills and his understanding of the numbers.

The restaurant experience turned out to be relevant. Both businesses depend on different people doing different jobs, with the right materials available at the right time. Inventory can become a liability surprisingly quickly in either environment.

I rather like that comparison. A box of ageing technology may look more impressive than a plate of strawberries, but neither improves indefinitely on a shelf.

His route into ownership was similarly practical. He wanted to build something, proposed an arrangement with the existing owners and earned additional equity against agreed goals.

The tidy career narrative comes afterwards. At the time, it was a succession of decisions made with incomplete information.

What do you think you are buying?

John's acquisition stories are where the conversation becomes particularly useful.

He understands financial diligence. He is not arguing that the accounts do not matter or that a friendly conversation can replace examining the business.

He is asking what those numbers depend on.

In AV integration, much of the answer sits with teams: the people who understand a customer's environment, coordinate a difficult installation, solve the awkward problem and make the experience reliable.

An organisation may hold the contract, while a particular group of people holds the customer's confidence.

Those are different kinds of ownership.

John wants to understand who works in the business, how they are treated and whether they can see a future with CTI. His question about what employees say to their families after the acquisition is especially revealing.

Do they think something good has happened to them?

Or do they think they should start looking elsewhere?

That is a useful addition to the due-diligence process. Not because every employee must welcome every decision, but because the buyer needs to understand how much of the business can walk out of the door.

Culture requires an explanation

CTI's culture is deliberate and, in John's telling, clearly communicated.

He describes a written document explaining the company's expectations, decision making and vocabulary. When a business joins CTI, he wants those expectations explained at the beginning.

His language is direct. He expects people to contribute, work hard and take care of customers. He does not pretend that everyone will want the environment he is offering.

You can disagree with parts of that approach. Clarity does not make a culture automatically fair, or attractive, or suitable for every individual.

But it does create something specific to discuss.

That is an improvement on the familiar corporate alternative: announcing that people are the greatest asset, then expecting them to infer the actual rules from who gets promoted.

John also makes a distinction that prevents the culture argument becoming quite so simplistic. An acquisition playbook needs flexibility. Each business comes with different circumstances. Applying the same process without judgement can create mistakes.

Clear expectations and identical treatment are not the same thing.

The task is to explain what matters while learning enough about the new organisation to make good decisions.

A good interview is a different skill

One of John's examples concerns an acquired business where the salespeople he expected to perform best did not turn out to be the strongest contributors.

People he had doubts about became successful. Some of those who had impressed him left.

There is an uncomfortable lesson here for anyone who believes a confident interview reveals the person in full.

Interviews reward the ability to describe experience, communicate under particular conditions and establish rapport quickly. Those are useful abilities. They are not a complete simulation of doing the job for the next three years.

John's conclusion is to place less confidence in the interview as a predictor, rather than to stop meeting people.

That seems sensible.

Businesses often demand evidence from everyone except themselves. A hiring manager can make a prediction on limited information, discover it was wrong, and still describe the outcome entirely as an employee problem.

The original decision deserves some examination too.

Leadership has to own its contribution

We discussed incentives, job design and the difference between thinkers and doers.

John's starting point is that most people want to succeed. If someone brings effort, a good attitude and trustworthiness but struggles to deliver, leadership should investigate its own contribution.

Is the role suitable? Has the person been trained? Are the expectations clear? Has a capable individual been asked to succeed in the wrong environment?

He describes people finding their place after being moved within CTI.

That is not a promise that every performance problem can be fixed. It is a refusal to assume that an unsuccessful assignment measures someone's entire potential.

There is a larger organisational point here. Different tasks require different skills. The person who designs the system, the person who translates a customer's needs, the project manager and the installer all contribute to the result.

Treating one kind of contribution as inherently superior can obscure the dependencies between them.

You need people to think carefully. You also need the equipment installed, the packaging removed and the job finished. The customer is unlikely to applaud the sophistication of your internal hierarchy while waiting for a functioning room.

Private equity is not the whole argument

It would be easy to extract John's sharper comments about private equity and present the conversation as a simple attack.

That would misrepresent it.

He says he enjoys working with private equity in some settings, understands the opportunity investors see and even compares aspects of CTI's acquisition activity to a small private equity operation.

His criticism concerns what some investors may miss: the relationships behind the financial performance.

If a buyer assumes the brand, process and contracts will retain the customers regardless of how the team is treated, it may damage the thing it intended to improve.

That is a criticism of an assumption, not proof that every externally financed business behaves identically.

It is also relevant to founders, corporate buyers and internal leadership teams. You do not need a private equity owner to underestimate your employees. Plenty of businesses manage that entirely on their own.

The channel needs to earn the relationship

John applies a similar test to manufacturers.

A reliable product matters. So does the warranty. But those are entry conditions for a serious partnership.

The vendor also needs to help educate the integrator, develop opportunities and deliver successful customer work.

That should interest anyone who spends their time trying to increase channel share. A partner's commitment is easier to understand when you examine what helps that partner operate well.

Training is particularly important because expertise has limits. Knowing a handful of solutions thoroughly can produce a better customer experience than pretending to understand every product in the market equally well.

There is a difference between being listed as a partner and being useful as one.

Technology ends in a human experience

The conversation about AV and IT convergence brings these arguments together.

John expects relatively straightforward deployments to remain accessible to a broad set of providers. More complex work depends on teams with the right experience and judgement.

A system can be reachable over the network and still fail the human test.

Can the presenter deliver the meeting? Can the audience follow it? Does the environment behave as the customer expects at the moment it matters?

Those questions do not make technical testing less important. They explain why technical testing is only part of the job.

The value sits in the connection between engineering and the intended experience. That connection is delivered by people who understand both.

Keep learning without losing your bearings

John is enthusiastic about education: books, certifications, peers, vendor training and CTI's internal programme. His scepticism about some university choices concerns the commitment of time and money, rather than the value of learning.

The same approach appears in his view of strategy.

As new information arrives, the plan should change. The organisation needs to learn quickly enough to act on what it discovers.

At the same time, expectations around trust, effort and responsibility need to remain clear.

That is the distinction I took away: stability in how people work together can make change easier.

You can complete the acquisition on a particular day. Building a company that people want to help succeed takes rather longer.

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What have you seen an acquisition preserve well — and what did the spreadsheet fail to notice?