Consolidation is a means to an end . Ask yourself , ‘ What ’ s my endgame ? Can it be achieved through consolidation or selling ? Will there be synergy between the two organizations ? Can we partner as separate companies in a way that will take care of what I want for myself and my team ?
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Consolidation is a means to an end . Ask yourself , ‘ What ’ s my endgame ? Can it be achieved through consolidation or selling ? Will there be synergy between the two organizations ? Can we partner as separate companies in a way that will take care of what I want for myself and my team ?
What was involved in buying those companies reinforced Jeff ’ s belief that the acquisition process was more trouble than it was worth for him . “ Those exercises made me think there had to be a better way to grow . I know I could out-compete for far less than buying an organization .’”
When the Lack of a Succession Plan Leads to the Need to Sell
Expanding on his number one reason that people sell their companies – the need to retire - Jeff talked about the impact of a succession plan . “ I think one of the biggest reasons many folks end up selling is that they want to retire , but they haven ’ t put a succession plan in place . Without that plan , they have few options other than to look for a buyer ,” he says .
Jeff has put a lot of effort into his own succession plan to avoid this outcome . “ I ’ ve worked really hard to create a succession plan that I think will perpetuate the success of Priority Dispatch ,” he says . “ I have really good people who are more capable than me at capturing every growth opportunity . I want these people to create a pathway to prosperity through Priority Dispatch , just like I did . And I can only do that if the company is intact . I believe it ’ s a culture that will allow them to flourish in ways they wouldn ’ t be able to in a consolidated environment .”
Acquisition and Culture
For Jeff , creating a culture among their employees and drivers is paramount . Keeping that culture intact is one of the reasons he ’ s resisted offers to sell the company .
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“ If you consolidate , you need to bring together people from different cultures , and that requires a terrific effort ,” he points out . “ That ’ s because the leaders of each company have spent many years building a culture that is unique to their company , market , and customers . Combining two of those can be tough . For example , many cultures in this space are mercenary . That is a culture we could never adapt to . It ’ s one I ’ ve made a conscious decision to avoid . I will risk growth to maintain a culture that supports our people . I will not create a mercenary culture , even if that could lead to exponential growth , because I don ’ t want to work in that company .”
The other issue in an acquisition is that more people are part of the equation when two or more companies merge . Some cultures can ’ t scale to adapt to a larger workforce . “ I ’ m in the people business . I can only incorporate so many additional people into my company before it begins to break the infrastructure ,” says Jeff . “ I believe that for every $ 10 million of revenue , you must rebuild your entire infrastructure to accommodate that growth . You can ’ t just dump that growth on and hope that your culture will magically permeate through a larger group of people . You must stop , back up , repurpose , and create a new culture to adapt to that growth .”
Jeff points out that reinforcing the culture is an ongoing process . “ It ’ s my number one priority ,” he says . “ I go to driver meetings in all the cities we serve because I deeply care about these people . And I just want to connect with them . I want to share with them and talk about our strategy . Our culture is deliberate . It ’ s part of our DNA . It doesn ’ t matter if I ’ m doing $ 100 million in revenue or if I ’ m doing $ 15 million . I don ’ t want to do it if I can ’ t retain that core culture .”
48 customized logistics & delivery Magazine I summer 2023