In the world of dealmaking, words matter.
It’s one of the most important lessons Aaron Grossman has learned as he drives an aggressive acquisition strategy that he hopes will enable TalentLaunch to become a $1 billion business.
“When we are engaging with companies that are new to our family, it is imperative that we effectively communicate what to expect and when to expect it,” says Grossman, founder and CEO of the network of independently operated staffing and recruitment firms.
“Building trust is critical,” he says. “As an acquirer, you need to do what you say you’re going to do when you say you’re going to do it. We have made drastic improvements in this area, but still have a long ways to go.”
Grossman has made four acquisitions since 2014 and plans to make 31 more by the end of 2027. His company, which includes Alliance Solutions Group, took in $105 million in sales in 2018 and has 220 employees.
We talked with Grossman about the role process and discipline will play in reaching the ambitious goal he has set for TalentLaunch.
Aaron Grossman: Learn from your mistakes
Live and learn
When you’re executing an acquisition strategy — buying companies and integrating them into your organization — there is going to be uncertainty, perhaps even fear. Confidence and strength is always desired, but sometimes you also have to be honest about the situation at hand.
“There’s a lot of risk that’s being put at play,” Grossman says. “It can be scary. The more I can make a connection with the person that we might be acquiring, and allow them to understand that we’re both scared together going at this thing, the better off we’re going to be.”
When TalentLaunch acquired Eugene, Ore.-based Selectemp in 2015, plenty of mistakes were made.
“We provided timelines on when they would be integrated into our platform, and those timelines were changed at least three different times,” Grossman says. “Ultimately, we were seven months off target with respect to the systems integration phase.”
The damage from those mistakes was minimized, however, by Grossman’s willingness to be upfront about his company’s relative lack of M&A experience.
“We told them that we were new to acquisitions, and we knew this was potentially going to get messy,” he says. “The feeling was that, as long as we were culturally connected to them and continued to build on that connection, we would be able to overcome the failures we would sustain through the integration process.”
It’s OK to be emotional
The psychology of an acquisition is more abstract and is not easily measured. While Grossman tried to be mindful of this as TalentLaunch approached its growth strategy, he needed to address the emotional components of integrating the people who work within an acquired company.
“In truth, we came to understand that there is a ton of shock in that first week of a completed acquisition, with little ability for many of the acquired folks to absorb and understand the communication and expectations that were being relayed to them,” Grossman says. “We began to identify critical integration steps that had to happen within that first week so that we could properly support the critical concerns of the acquired company. Other than that, we began to focus on building trust and developing relationships to help ease the anxiety of our audience.”
Culture is a key variable and an effort was made to help people feel more connected to TalentLaunch’s culture and begin to be inspired by it, Grossman says.
“Once we eased many of the fears within the acquired company, we began to focus on educating our audience on what to expect with the integration process and what changes to how they work would eventually happen as a result of them coming into our platform,” he says. “This has resulted in a much more effective partnership in how we execute on integrating our acquisitions into our network.”
When the old way doesn’t work
TalentLaunch’s internal departments have also faced an adjustment. As a small company prior to executing on an acquisition plan, these groups were typically able to achieve success independently from each other.
“As we began acquiring businesses, it became clear that to successfully integrate these companies, our departments would have to come together and come up with an integration strategy that defined roles, responsibilities and timelines between the departments so that they could effectively work together to accomplish the task at hand,” Grossman says.
Two of the company’s early acquisitions drove hard consequences that forced Grossman’s team to adhere to this principle.
“It was fascinating to watch,” he says. “When we acquired a company, the nature of our accounting department was to hit the ground running. Their culture is all about getting things done. Project planning was not a strength at the time, and they just began doing what they needed to do to integrate the company.
“On the other hand, our technology department was all about project planning and mapping out a process on how to properly integrate the companies. The sense of urgency between both departments was not aligned, and the fact that the departments were acting independently from each other didn’t help the absolute need for collaboration.”
As a result, communication eventually broke down. Expectations were not managed properly, and internal conflict ensued, Grossman says.
“As the CEO, I was forced to step in and become the referee around it, which I wasn’t anticipating would be part of my job responsibilities in an integration,” he says. “Over the course of time, we started to develop habits to influence departments to start working together and to look at themselves as part of a larger team.”
An effort was made to devise strategies together and come up with shared resources and tools to help influence partnering and collaboration.
“Fast forward to the present, and I feel we are a completely different company from a departmental perspective,” Grossman says. “There is now a culture of collaboration, and departments are very much intertwined on a variety of projects within our organization.”