If anyone knows that, it's Steve Goodman. Three times he's built software businesses and sold them to public companies. He's as entrepreneurial a guy as you'll ever meet, bursting with energy and ideas. So how has he navigated what can be the most painful transition from CEO to employee? In my last post, I got Goodman's tips on how to make a merger work. Here are his insights on how CEOs can survive post-merger drama:
Check your ego at the door. "All CEOs of early-stage companies have egos -- that's one reason you start your own business," Goodman says. "So when you sell it, you aren't going to have the same autonomy -- no matter what your title is -- now that you're three or four levels down in a big organization. You have to check your ego at the door. Make sure you have people on your team who have great relationship skills and who want to navigate the bigger, larger place where they now work."
Invest in the right people and the right incentives. You have to have a great incentives structure in place for those who are going to lead the integration. According to Goodman, there will always be four or five people will make the integration work, and they have to be rewarded: "The guy who runs sales has to be a social person who works really hard to win friends all over the new organization."
Mourn. However great the deal, you always have a sense of loss. Always. "You go through the five steps of mourning," Goodman says, with a halfhearted laugh. "As you start to integrate into the business you've joined, you lose a certain sense of camaraderie. You have to acknowledge that your baby is going away, but it's for the greater good. It'll be very emotional, but you have to keep thinking about what you're becoming, not what you've lost."
All of the CEOs I know who have succeeded in making their deals work echo Goodman's point: M&A is all about emotion. You can either harness that energy and get it to work for you -- or you can ignore it, only for it to blow up in your face. When she merged WebCT and Universal Learning Technologies, CEO Carol Vallone was so sensitive to the emotions loosed by killing off one brand, one technology and one product that she held a funeral for them. To this day, she credits that ritual (in which staff solemnly intoned elegies and buried discs of software code) with the subsequent success of the new, merged business.
I've known CEOs who went into therapy after selling a company, so traumatic was the transition. They, at least, had the courage to confront just how profound the emotional shift can be. After the warranties and the tax deals and the audits, it's those emotions that will make or break your future.
Read more tips from Steve Goodman: