29. Dec, 2018

Recap on buying small companies ...

Small versus large by https://pixabay.com/en/birds-swarm-flock-of-birds-sky-2189476/ 

One of the ideas to solve the "War for Talent" challenge is to buy a whole company with the skills that are difficult to hire from the job market.

Sounds like a great idea and some advisor are already specializing in this business model. But does it really make sense and solve the underlying problem? I don't think so out of several reasons:

  • People working in small companies are doing this, because they are looking for a more familiar environment with e.g. flat hierarchies, short/fast decision-making processes, a lot of influence, a small number of employees - everybody knows everybody, etc.    
  • Large(r) enterprises/companies are the clear opposite of the environment described above
  • Nobody wants to be reduced to skills only and to just fill a gap in another company
  • The larger company will not only buy employees with skills, but a whole company with all the advantages and disadvanteges this will have
  • The top talents in the smaller company will be looking for alternatives shortly, if the new environment is not meeting their expectations
  • For a quick/smooth merger you have to align the financial systems and processes, the network and email system, what might be counterproductive to the success factors in the small partner?
  • There will be good arguments, why the bigger partner has difficulties to find new talent, besides the pure shortage in the job market. These "company branding" issues are not going away just by a merger with a small company
  • There are many more arguments, so I am sure it is not a good idea 👎

 Some material to check out for the weekend:

Remember there's no such thing as a small act of kindness. Every act creates a ripple with no logical end. Scott Adams, American - Cartoonist Born: June 8, 1957,                  https://dilbert.com/