As someone who has more than a passing interest in the stock market, I have noticed an interesting phenomenon: it’s very easy to give advice when it isn’t your money at stake. In fact, I’ve helped several people here at the office make some bold moves that paid off nicely for them. But when it comes to ponying up my own hard-earned cash on a stock that could take off like a rocket or drop like a stone I find sometimes it’s a little harder to pull the trigger.
I suppose that’s only human. But recently I had the opportunity to test out some advice I’ve given repeatedly over the years to clients who were in the process of selling their businesses. I decided to practice what I’d always preached about being open and honest about it, and I’m happy to say that I’ve been right all along.
As I’m sure everyone reading this knows by now, Tech Image was acquired in January by SmithBucklin, the nation’s largest association management company with more than 700 employees and a long-standing reputation for excellence. It wasn’t something I’d planned to do at this time. It was merely the result of all the stars aligning.
The move actually began a couple of years ago, when I called together everyone at Tech Image and told them that I had begun looking for an exit strategy for myself. Truthfully I was more than a little worried how my employees would react. Would they freak out? Would there be a mass exodus? Would I find burning effigies hanging from the trees around my home?
Then I asked myself what I would tell a client in the same situation. The answer was simple. Follow the words of Ben Franklin - honesty is the best policy. I broke the news to them, telling them I was figuring on a five-year plan, and that my goal was to make sure that Tech Image lived on and thrived long after my biggest worry was whether I could make a 10 AM tee time.
One of the strategies I mentioned then was an employee stock ownership plan (ESOP). I thought that would be a great way for the people who had helped build Tech Image into one of the top 25 fastest-growing PR agencies to reap the rewards of their work. It was an idea that stayed in the back of mind.
Fast forward to 2006. I was talking with some folks at our client SmithBucklin and in the course of the conversation mentioned my idea for an ESOP. Cindy Kuhn, the Senior VP of Marketing Communications Services there, said that SmithBucklin had recently gone through the process and that their CEO, Henry Givray, could walk me through it. I met with Henry, and he went through the steps. The more we talked the more we realized our companies were very similar in terms of culture, and complementary in terms of what we did. Finally Henry said, “Why go through all the hassle of starting an ESOP? Why not just have us acquire you so you can use ours?”
Up until that point the thought hadn’t occurred to me. But once he voiced it, the acquisition made perfect sense. We quietly did all the preliminary due diligence over a period of four months and struck a basic deal. Now all that was left was figuring out how to announce it to the employees of both Tech Image and SmithBucklin.
We could have waited until the deal was official after the new year. That’s certainly a strategy many companies have followed. But I’ve always believed the best way to prevent fear, rumors, and disinformation is to get out ahead of major news. We decided to announce it to employees of both companies in November, and asked them to maintain "radio silence" until the official closing.
Now, asking 700+ people to keep a secret is a pretty big request. In Washington, D.C. they always say if two people know it’s no longer a secret. Yet the plan worked flawlessly.
The key, I think, was the free exchange of information. When we made the announcement we said exactly what was going to happen and when, eliminating any need for speculation – public or private. The message was designed to create a comfort level with the pending change. After all, SmithBucklin is not a PR agency so they would be looking to add our capabilities to the mix rather than simply absorbing our accounts into their business.
To his credit, Henry came out personally to meet with the entire staff, share the history and culture of SmithBucklin with us, and lay out his vision for the combined company. In December, the SmithBucklin HR team came out for a full-day orientation meeting to go over the company and its benefits. Most importantly, everyone here felt assured that the transition would be an easy and positive one, and that the only substantive change to their lives would be what logo appeared on their paychecks. It was really a textbook example of how to communicate the news of an impending acquisition.
Two months into it I can tell you that everything is running as smoothly as ever. Everyone here felt the comfort level and thus is still on board. That’s a good thing since SmithBucklin was far more interested in acquiring the people than the accounts, the computers, or the office space. We’re still working on integrating the two organizations more tightly but I can honestly say it’s one of the smoothest transitions I’ve seen in more than 25 years of business.
Yes, sometimes it’s easier to give good advice than to follow it. But if you really believe in what you’re doing, whether it’s in the stock market, on the golf course, or in your business, you will be well served to practice what you preach. I know it’s certainly worked out well for us.
In the area of business as usual, this issue of the newsletter takes the whole social media phenomenon head-on. As you'll see Tech Image has looked at it from a number of different perspectives. Like the industry at large we don't have a definitive answer on it yet. But we have a pretty good knowledge base now to help our clients make decisions on whether to get into it or not on a case-by-case basis. And when you come down to it, isn't that what it's all about?
Anyway, that’s my two cents.
