In this episode, Jackson Sprayberry, Anderson Williams, and Cynthia Hiskes close out Season 2 with the widest lens of the series: why acquisitions fail on the people side and what to do about it. They explore how a lack of early communication creates anxiety that turns into headwinds before integration even begins, why clarifying the founder’s role is critical to the entire organization’s stability, and the difference between change (what happens externally) and transition (what happens internally). The conversation shifts to how talent strategies need to evolve over the hold period, from hiring athletes early on to developing specialists and frontline managers at scale. The episode wraps with a direct call to action: don’t let another 5% of the hold period go by without having the conversations that matter.

Introduction

Jackson Sprayberry: Welcome to Raw Talent, a podcast from Shore Capital Partners focused on the real work of developing people and building stronger organizations.

In this series, members of our talent development team have candid conversations about what it really takes to grow leaders and strengthen teams. Talent development is not just a program, it’s the everyday work of coaching, feedback, stretch opportunities, and accountability that shapes performance over time.

Each episode explores the real challenges companies face when developing people and the lessons learned along the way.

All right, welcome back, to Raw Talent. This is episode five, our final episode of this season. This one is why acquisitions fail on the people side and how to fix it. This really is the widest lens of the entire season, because all of the other conversations we’ve had up until now assume that the talent strategy and the business strategy are aligned. But the reality is, that especially in our context, there are an incredible number of acquisitions.

There’s growth, there’s integration, and with all those things comes this really fast pressure test, this stress test. And so when we think about integrating a new team, when we think about integrating a new founder or new operating practices, how do we do that without blowing up what was already working well?

And then when we look at that founder dynamic, how do we approach it? And then how do you know when your talent strategy at launch no longer matches your talent strategy, at, current?

What Makes Integration Succeed or Fail

Jackson Sprayberry: So let’s actually start with that first question. What makes people, like the people side of integration succeed or fail? Easy question.

Anderson Williams: I, I, have a bunch of answers, but I don’t know that any of them are good. I I, think where I have talked with founders, fortunately through our podcasting and through leadership work and so forth, and just heard their messages and voices, it all comes back to transparency and proactive communication.

When people have stress about their company being acquired, they’re having stress about whether their role is still gonna exist, which means whether they have a job, which means- whether they can feed their families or… this gets real serious, real fast, for most of the team– many of the team members who aren’t in po- a part of the deliberations for this kind of decision.

I think the, first place it fails is when we don’t talk to our people about what ha- what’s happening and why. So one of the best things I heard from one of our founders was, “I thought when I was going through the process, if I didn’t have the answer, I should just be quiet, and I was wrong.

I should have told them what I knew and told them what I didn’t know and kept the lines of communi-” He goes, “I could’ve saved six months of angst and anxiety on my team.” That becomes weight, that becomes, headwinds to the integration before the deal is even, before the integration process is really happening.

So my first answer is just have the conversation about what you know and don’t know, because what people are wondering about is this existential kind of job question. And for most of our companies, by the way we acquire and build companies, most of those jobs are still there. But the anxiety is gonna be built in the absence of that narrative.

Cynthia Hiskes: I will take that question down to a much more tactical level. So where I have seen them or why do they go well is when there is a lot of planning upfront to manage that change and that transition. Literally in the… ‘Cause it gets at the how is this impacting me? And being able to communicate to people what is the change, why are we making this change, what does it mean to me specifically, and then how do I get my questions answered?

Like the basic change management questions. But then what you need to do is you need to apply it to all the people, processes, and systems to get to the other side. So when you have your day one communications, at Shore, we are second to none in how we execute a good party. And this is like day one is the, same thing as a party.

It didn’t– you didn’t decide the night before that the investor meeting was gonna be like that. It started planning far in advance, and you were looking at every detail to see what it was going to be the experience for the individuals, and that is the same type of thing. ‘Cause to your point, Anderson, that’s the same type of planning we need to do because that is what is gonna make people feel like, “Oh, this is okay, and now there’s no more noise for me or less noise for me-” and less noise for the leaders.” The… ‘Cause the other thing that happens is the leaders, they were in the know. They’ve been in the know for a while. So it’s now they’re kinda like, I’m good. Why is this such a big problem to everybody else?” But it’s the first time everyone else is, hearing about it. So preparation, a great, like transition announcement experience

Anderson Williams: And, it comes back to clarity again, right?

if we can offer whatever clarity we can early to those team members, then we grease the s- the skids of the, integration process. And if we don’t, we create more friction. And I will say in my experience as well, the other part of that, speaking of the founder, is clarifying the role of the founder moving forward.

Where I have seen that, be ambiguous or not just explicitly defined, it doesn’t just create stress for the founder’s integration, where they’re stepping on toes or they’re stepping all the way back and we didn’t ask them to step. We need them still doing their thing. It also creates anxiety down through the ranks of these people who have worked with that founder for, in many times, decades, and they’re looking to that person to answer a question or to go to that person, and that person no longer can answer that question.

It creates this consternation and anxiety again that’s not just about my role anymore, but, what have they done to the way that we do things? We w- it always worked before, and so why is it changing? And so I think that clarity of roles is part of the strategy for successful acquisition and integration, and it has to start early and often with clarifying that role of the founder so that then it can be clear through the ranks of the team that’s joining as well.

Change vs. Transition

Jackson Sprayberry: I wanna make sure that we have time to talk about how we know if the strategy at launch is still aligned with where our business is. But before we move on, I wanna tee something out. You’re alluding to it. You named it explicitly.

Change and transition. That’s an intentional choice on your part.

Change and transition.

Cynthia Hiskes: Right.

Jackson Sprayberry: You started talking about the way that people feel.

Cynthia Hiskes: Yeah.

Jackson Sprayberry: You highlight this idea of why are they making this change? It worked like it used to be. We talk about this a lot in the development that we do and the conversations that we have. But for either of you, talk a bit about whether it’s the Bridges Transition Model-

or just tease out for us the difference between change and transition. Like this things that change and then how somebody experiences it.

Anderson Williams: And I talk about this any chance I can. And you know this, that, is a model that I learned decades ago from a guy named William Bridges, and it’s just simply that the change is the acquisition.

The transition is the psychological and emotional recalibration that it takes for me to accept, this new state. To your point earlier, after the, founder’s gone through this process for himself or herself and gone through the emotions of letting go of their baby and all that, they’ve unwittingly, most of the time, given themselves, their spouses, and others time to transition into what this means for us now.

the team hasn’t had that. and so they’re experiencing so much of this as loss because it’s different than it used to be- or there’s a new process or new reporting structure, w- whatever those things might be. So that transition is almost always the source of resistance, which then is the source of failed integration.

So it, it’s a cascading thing, and if we don’t deal with the stress and the concerns and the anxieties and the real-world emotions that, again, I wanna come back to, are about people’s sense of security. it’s at the base of the Maslow hierarchy. It’s like- do I have my job? Is this, is my job safe? Which then means, “Can I still send my kid to daycare?”

This cascades really fast. and that’s what the transition is all about. And so we get locked in thinking from a business perspective about the change side of things, and then we wonder, “We didn’t even change anything at their business.

Why are, why, is, why are their numbers dipped the last three months?” And it’s because they’re distracted, they’re stressed. They’re… Half of them are looking for other jobs because we haven’t managed the transition.

Jackson Sprayberry: I mean, I, we’ve talked about this, a lot. And just to, put another example on this, the change is what happens externally.

The transition is what’s happening internally. For many of these folks- These transitions are a, grieving process.

Cynthia Hiskes: Sure.

Jackson Sprayberry: We, and I think it’s, we are maybe sometimes a little timid on naming it for what it is.

Cynthia Hiskes: Yeah.

Jackson Sprayberry: But there is a real sense of identity that is lost for folks that have been the bookkeeper at this company for 25 years, and now all of a sudden there’s a different name on the door.

Cynthia Hiskes: Yeah.

Jackson Sprayberry: The role hasn’t changed.

But the name did.

And from a business perspective, so what?

But from the people that we are integrating, it’s a really big deal. And, another example is changing insurance.

Maybe the insurance that you’re moving from Blue Cross Blue Shield to Cigna, the Cigna plan might be better than what they had.

It might be cheaper than what they had.

They might get to keep all of their same providers, but when they get that new card in the mail, it’s

Cynthia Hiskes: Yeah.

Anderson Williams: For sure. And it’s that stuff that’s really the stuff that gets them, because for the most part, we aren’t changing the names and stuff.

It’s just that there’s somebody new in a meeting or- Yeah … some decision that does- that used to be made. I used to be able to go directly to the founder to get this answer, and now I can’t. Those are little moments of loss because it… The insurance is a great example because it could be 1,000 times better, but if I don’t understand it, then it’s not.

And so now I’m just stressed ’cause I gotta get on the phone and see if they’ll cover this and see what my deductible is and all those kinds of things. So it is those, it is those little things that we, when we think in terms of change, don’t even see anymore that are creating some of that transition stress and sense of loss.

When Your Talent Strategy No Longer Fits

Jackson Sprayberry: How do you know that the original talent strategy that you started with at a, maybe a platform launch, is no longer what your business needs? What are some patterns that, that leaders need to be looking at?

Cynthia Hiskes: I would say I would go back to your performance metrics and what we talked about a couple episodes ago.

How… What, is your… How long does it take you to hire people? Or what, are your engagement scores? What is your turnover? What are you hearing from the organization? I think those things are really important to look at to know. And then how is that translating to your business performance?

Like, where are there correlations there? and, and I think this is why we say you look at it kinda early and often, because it will … You know it will change, from the beginning to the end, and you need to continue to, tweak-

Anderson Williams: Yeah …

Cynthia Hiskes: Along the way.

Anderson Williams: One of the things that we see is that can be an indicator, is we acquire a company, and then in the first quarter their performance is diminishing compared to what it was- the two, three, four quarters prior to the acquisition. Same people, same product, same service, same brand, same name on the door, same vendor, same everything. and when we see those kinds of things, we need to recognize, e- especially when we speed up acquisitions, that we still have to tend to those kinds of things because that’s a big red flag that there’s some noise or something going on at, the level of service delivery that either people have gotten confused on what decisions get to be made, or there’s a new process and they don’t really understand it, and those kinds of things.

So that can happen early. But to your question about when do you know it’s outgrown it, now turn that integration conversation, that acquisition conversation from, one or two a year to let’s pick one of our companies that really picks up steam, and you’re doing 10 in a year. Now you think about what it takes for all the stuff we’ve just been describing.

To manage transition now With 10 a year rather than one or two, if you’re not paying attention to the what happens if, narrative, or w- with that kind of growth, then you’re gonna lose that, and you’re gonna have on scale untended transition. and so I think this is why, to the premise of our earlier conversation, it’s gotta be part of that growth strategy.

You’ve gotta be thinking about, like you’ve talked about stage relevance and when you need to have- an HR leader.

adding to your HR team, the time to do that is probably not after the 10 acquisitions.

When you go, “Oh, God, we need more help.” If you know you’re gonna be ramping up to 10 acquisitions, you ought to be thinking about who’s having the benefits conversations with these 10, who’s getting on site and answering the questions, who’s doing all of those kinds of things and being a face of the company down in those, because that’s when it breaks, and you need…

That’s why, again, it’s gotta be aligned with that growth strategy.

Cynthia Hiskes: Another point I wanted to make, ’cause again, I think I didn’t answer it really well in the beginning. But it’s good I have another chance. how does it change? And, I, now I’m thinking about it from a different perspective is early on we’re like, “Ooh, we need to bring some high-powered experienced talent to come in and really get things rolling, make our moves and go.”

As the companies get larger and larger, especially from a people standpoint, the more people you have, the more layers you have in the organization, the more important it is that your managers, especially your frontline leaders and the managers above them, have skills and competencies to manage that population.

it’s a, scaling thing, and when you don’t have… when it’s not as large, it’s a, it’s easier to, get around it and muscle through the management piece of it. But once you have a larger population of employees, you definitely need the skill and the competency there in place-

Anderson Williams: Yeah …

Cynthia Hiskes: in your managers and your frontline leaders.

So I think that is one thing that does change with a talent strategy over the hold period, especially if your employee population is gonna grow.

Anderson Williams: One, one other thing that comes to mind is where I, actually thought you might go as well, is that we’ve mentioned in prior conversations this idea of hiring athletes that, that kind of are flexible and can stretch- and run after any task. As you grow in scale, you don’t need a room full of athletes.

You need a room that has athletes that continue to push that front edge of the company, but you need some stabilizers and some good performance deliverers and, that kind of thing. So one of those shifts from a talent strategy is also from looking for all the best athletes to…

or, generalists- Yeah … another way of saying that, to then where are the critical roles where you need to specialize?

Cynthia Hiskes: Yeah. Great point.

Anderson Williams: And, that’s a, key shift. we talked before about not needing to necessarily having the best of the best in every role. This is similar type of conversation.

You don’t need an athlete in every role. as you start to grow, you’ve gotta identify- we absolutely must have somebody in this risk role, who is a master at this, and we can put some athletes around them, whatever that might be. But that’s definitely another sort of- Yeah … part of the shift.

Cynthia Hiskes: There is that, there’s that ebb and flow in, I think, a lot of aspects of the organization as it grows. One of them is in centralization and decentralization of responsibilities, of functional responsibilities, and there is not a right or wrong answer. It is the clarity with which you’re operating so people know, “Wait, is that…

Are you calling the shots, or am I calling the shots on this one?” And that changes over the hold period based upon what you need to do to deliver the business. So I think that is another really important, dynamic that changes, that’s important for people to understand and get in front of.

It’s the spans and layers. It’s the centralization, decentralization, building your management team ’cause… And then when do you need specialists? ’cause that all changes over the co- course of the hold period to differing degrees.

Why Talent Strategy Is Business Strategy

Jackson Sprayberry: So let’s bring it all home. Why does this matter?

Cynthia Hiskes: Yeah.

Jackson Sprayberry: Why is it that talent strategy needs to be so central to business strategy?

And what starts to break-

when your talent strategy and your business strategy drift apart? And answer this both at the macro and the micro.

Anderson Williams: I’ll start by going back to the very first question about, how do you know when to hire versus develop versus, move forward?

If you can’t answer that que- question in, particularly in critical roles, you’re accumulating, again, headwinds, right? If you’re investing in someone who’s not gonna develop or doesn’t have the will or interest in developing that role, you’re wasting massive amount of time, energy, and effort. So every quarter is 5% of the hold period.

Now you think about holding on to someone who’s not doing the job for 5% of the hold period. You think about not investing in someone who’s willing, but you just haven’t had the time to skill up for 5% of the hold period. You think it’s just June, July, and August, but it’s 5% of the hold period. that reframe is part of wh- why this matters to business strategy.

It matters to your ability to grow. It matters to how much friction you’re gonna feel when you grow. it matters to the conversation we’re having about integration. If someone can’t ramp up or scale up from an integration standpoint, or if we, don’t know how to do that, all of this begins to circulate in is it just going to be growth, or are we gonna start to lay the groundwork for scale?

Cynthia Hiskes: Agree. And I will capture everything that you just said in my thoughts around it, because it is way more efficient.

Anderson Williams: Yeah.

Cynthia Hiskes: And-

Anderson Williams: she could’ve just said that, and I could’ve kept my mouth- … I could’ve been quiet for the last five minutes.

Cynthia Hiskes: And it, it just helps us get there faster and with less energy and stress, and then that also comes back in, I think, my heart and core is everyone’s gonna be happier doing the work that they’re doing in that situation.

And when you get to, we heard this from strategic buyers before, when you get to sell your business, when you get to that point, people will look at these metrics and use it to value the business. What is the organizational health? What are the, retention numbers? What is the engagement? All of that are all signals of is your talent strategy working, and then how is it really helping to make the value creation efforts more efficient?

Jackson Sprayberry: So with that, I think here’s the season close in my mind. It’s going back to that first question, develop or move on. Every single gap between your talent strategy and your business strategy makes that decision around moving on and developing harder.

And it limits the choices that you have When you come to what your decision is.

And so with that, I think what I want to do is just end with some practical advice, for those that have been watching. And my advice would be, if you’re the CEO, have a real talent review conversation. If you’re a manager, have that conversation that you’ve been avoiding. Don’t let another five percent of the hold period go by.

And if you’re an individual contributor, have an open conversation with your manager about how you feel about your role and what the path forward looks like.

Thanks so much for joining us for, season two of Raw Talent. we hope you’ll be back for season three.

Cynthia Hiskes: Thanks, everybody.

Anderson Williams: Thanks. Nice work.

Jackson Sprayberry: If you enjoyed this episode, check out other Raw Talent episodes at www.shorecp.university/podcasts or anywhere you get your podcasts. Here you will find our Bigger. Stronger. Faster., Microcap Moments, and Everyday Heroes series, each highlighting the people and stories that make investing in the lower middle market unique.

This podcast was narrated by Jackson Sprayberry. Created and produced by Austin Johnson. Editing by PodHouse Productions.