Jaideep Shergill: Will ‘acquihire’ work for A&M

06 Mar,2017

By Jaideep Shergill

 

Carrying on from where I left off the last time I was on a roll with my columns about acquisitions in the marketing communications industry; the virtues or the lack thereof, I thought I would dwell on the one possible model which makes most sense in the otherwise failing effort of larger groups to acquire and bolt on firms to their already ballooning and meaningless business models.

 

In some senses, one of the “stepchildren” of the acquisition process tends to be the acquihire approach which as the proper definition goes, essentially means: buy out (a company) primarily for the skills and expertise of its staff, rather than for its products or services.

 

Most articles about the tech sector seem to indicate that acquihiring has become increasingly common in the venture capital backed start ups. In recent years, Facebook has beenthe largest performer of acquihiring or talent acquisitions. Twitter, Yahoo! and Google rank alongside Facebook as similarly major users of talent acquisitions.

 

Despite this, the obvious reason this model tends to be missed out(in the marketing services industry) is largely because this is the one model which doesn’t allow the buyer to boast of large deal values and the seller to brag about the millions the promoters made for themselves. Plus, this is also one of the easiest ways to do a deal and easy means not good to the men in suits who run the marketing communications industry! To top things off, these “talent deals” don’t make the headlines across the press often and hence gets pushed to the background.

 

While the tech sector has still demonstrated that the acquihire model works, our very own marketing/advertising industry has a long way to go to make this model work.

 

At a base level, acquihiring is not a classical acquisition because the acquirer is only interested in a pool of talent which allows them to gain an edge over the competition in a specific area, i.e., if I own a strong creative firm and want to get a strong digital team on board to bring more cutting edge work to my clients, or I own a traditional PR firm and I need specific skillsets in social media or content creation then in either of these examples, I would look for a small and nimble team and hire them outright. Now this team may or may not be a firm in itself but a small group of extremely talented folks residing at a competing shop and I need to bring them on board for a fair value (beyond what they get paid currently) and empower them to run this new/allied function within my existing set up. Simple explanation of how this really works!

 

The acquihire model works beautifully because its simple and efficient and quick and has no strings attached. If one is acquihiring an entire firm, usually these are boutiques and don’t have the dead weight of egos and other attachment’s and hence these deals work much faster and benefit both sides immensely.

 

It’s important to remember the following:

1. The talent coming in via an acquihire process needs to be integrated well into the parent firm
2. The talent mustbe treated as equal and not “step children”
3. The talent need to be given time to perform and deliver

 

For the talent, getting “acquihired”, its important to remember:

1. You are joining a firm because the vision aligns with your career trajectory
2. You will get the resources you need to excel and shine creatively which is otherwise hard to do if you run your own boutique
3. You will be absolved of all the painful operations and administrative hassles and can focus on doing great work

 

Specifically speaking for India, I personally believe there are only that many ways for us all to create the right demand for best in class talent in an industry in which the quality of talent has been circumspect in recent years and acquihiring may be one such quick and efficient way to do this. However, will the egos of the men in black suits allow this? Only time will tell…

 

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