12 Engineering Leadership Lessons for Success after an Acquisition
In February 2019, Contactually was acquired by the innovative real estate brokerage Compass. As one of the two managers of the small engineering team at Contactually, we joined 175 other engineers at Compass (now over 400!) to build the CRM for our next-generation real estate platform.
Since then, our team has grown, learned, and had opportunities to work on dozens of great projects. We’ve learned Go, adopted a microservice architecture, learned about Kafka and Kubernetes, started new React apps and backend services, worked alongside AI teams, launched major features for thousands of real estate agents, and helped drive hundreds of millions of dollars of sales.
The transition wasn’t always easy, though, as acquisitions come with numerous changes to culture, processes, and technologies to navigate. In leading and navigating these changes after our acquisition, I encountered many learnings that I think can be generalized for use by others who might face similar circumstances.
Keep in mind that how these learnings apply to you may vary based on several variables of the companies — sizes and rates of growth, industry/product/technical similarities, geographic locations, etc. Regardless of exact applicability, these learnings should provide you with food for thought for your own acquisition or company transition.
1. Double down on your team’s social bonds
From the time an acquisition is made known internally, through the time it’s finalized, and until the time you start to onboard and integrate into the new company, weeks may go by with more questions than answers.
During this time your team may feel some uncertainty. They may feel uncertain about large things like company values, mission, culture, technology, and processes… but perhaps more immediately impactful is uncertainty around the short-term direction. What should everyone be doing day-to-day during this period?
To enjoy this period and keep it upbeat and exciting, we found it great to fall back to a constant that we all knew we liked — each other. Intentionally schedule extra happy hours, long lunches, coffee walks, group volunteering opportunities, participation in meetups, and make sure to go out of your way to express gratitude and recognition towards one another. While this may sound trivial, this can prime your team to be in the best spirits to tackle all the new challenges that lie ahead.
As you integrate into your new company, don’t immediately leave this behind, but instead incorporate people from the new company. We found ourselves (in Washington DC) geographically separated from our new headquarters (in NY), but arranged for several teams from HQ to visit with us in short order.
2. Product, Engineering, and Design will each adapt differently
While Engineering, Product, and Design are meant to work as a cohesive trio, we found that each of these roles had unique challenges in adapting to our new organization.
- Our Product team’s well-trained mental filters for differentiating signals from noise were reset as they had to adjust to new the business and user contexts present in our new organization. This meant less immediate conviction about product/feature choices, and having to spend more time researching to “catch up” to the implications of our new surroundings.
- Our Design team likes to prepare for work a month or two ahead of engineering, but suddenly design and engineering were on the same schedule. Design had to “make up ground” so that enough consideration could be put into experiences before instructing the engineering team.
- While our Engineering team assessed technical improvement areas, we lacked historical context and awareness to always understand how best to balance short-term and long-term tradeoffs or small-scoped and large-scoped solutions.
In hindsight, it may have been beneficial to decouple these three roles for a brief period of time. Whatever role is further “ahead” can try to work on things isolated to their role, preparing a backlog, while the roles that need to catch up are bought time to do so. Engineering could spend a month working on debt, bugs, or architectural improvements; Design could perform a usability audit; Product could vet prioritization with further quantitive and qualitative research. Such strategies could help to alleviate short-term bottlenecks or dependencies.
3. A broad audit of your systems will pay dividends
You’ll likely find your team owning new technical systems and potentially interfacing with many more. Alternatively, your old systems might be put under new loads or requirements. And on top of this, you’ll likely have new processes and tooling for deploying, testing, and monitoring.
All of this will surely highlight new technical debt, and you’ll be well equipped to assess it, given you represent a fresh set of eyes for the company. Our team didn’t do this as early as we could have, and later found that we would have benefited if we did so. Ideas to consider:
- What is the test coverage of systems? Where are the blind spots?
- What are the error rates of various systems or API endpoints?
- What is their uptime in different environments?
- How long does it take to deploy? How safe is it? Can it be rolled back?
- What are their API latencies? What are the biggest sources of slowness?
- How much traffic do the systems have?
- Is infrastructure appropriately sized and scaling?
- Do you have an incident response playbook?
- What type of monitoring is in place? What isn’t in place?
- What technical processes have become productivity bottlenecks?
These learnings can serve multiple purposes:
- You can flexibly fill in any gaps in product prioritization/timeline with valuable engineering improvements. Having this as an option can allow product and design breathing room and not feel like engineering depends on and waiting on them for direction.
- This can help buy your engineering team some early wins that can be great for morale and the mutual relationship with your new company.
- Note areas of expertise you have from your previous company that might be broadly applicable/impactful to the new company (more on this in the next section).
4. Invest relative to the breadth-of-impact
Our team found ourselves with an excess of early potential workstreams (some of these potential workstreams arose from auditing our various systems as discussed above). It then became challenging to have proper conviction about how best to order/prioritize these work options.
We found that we frequently had to choose between temporary/incremental improvements or investing in significant overhauls.
The following two questions served as a useful framework for us, though I wouldn’t suggest this be a strict rule you should have to follow.
Could the work benefit a broader portion of the company?
If so, then consider the more significant investments or solutions. If resources are thin, consider whether there might be an opportunity to distribute the work amongst other teams, with your team simply having been the catalyst.
Would the work only benefit our team?
If so, then consider temporary or incremental improvements. A valuable type of quick win to be on the lookout for are ones that improve your developer productivity or morale — like improving that plodding deployment script or fixing flaky tests.
5. Carefully consider hand-off projects
A common way to quickly deliver value in your new organization is for some existing projects to be handed off to your team.
However, in eagerness to do this, you can be susceptible to taking on ownership of projects that may or may not be the perfect fit for your team.
While we didn’t quite realize it at the time, one project we took on ended up not strategically aligning very well with the other major initiatives we were focused on. Instead of having sets of work that overlapped and benefitted from mutual strategy, these projects ended up competing for mental space at the cost of one another — an outcome that meant we were unfortunately unable to deliver the maximum value to users of either feature set.
Eventually we re-assessed this arrangement, finding new owners for the tricky project that allowed for better investment and impact. Still, we probably could have identified this earlier or handled it more smoothly.
In retrospect, it was still a reasonable idea for our team to contribute to this project in the short-term. However, all parties involved would have benefited from some additional consideration about the project’s long-term synergy with our other focus areas and discussing the differences between short-term stewardship and long-term ownership. Had we done so, we probably could have saved several teams from confusion and bought ourselves some increased focus.
6. Celebrate wins early and often
While it’s always a best practice to recognize your team's wins, it is doubly important early after an acquisition.
Not only is it great for your team to reflect positively on what they can adapt to and accomplish as part of a new organization, but it is great for the broader organization to recognize how your team is jumping in and making a difference.
Even what might feel like tiny wins can be worth sharing during this time — your team’s first code commit in the new company’s codebase, your team’s first code in production, your team’s first hire as part of the new company, your team’s first bug fixed.
Additionally, your team will likely bring new subcultures to the company that are valuable to highlight. Do you value speed-of-iteration? User-centricity? Ego-less collaboration? Highlighting wins rooted in these areas can allow the broader company to learn from the specialties that your team might excel in.
7. Maximizing recruiting in light of new challenges
If your team plans to hire and grow sometime after the acquisition, this may prove challenging in different ways than you are used to.
Leveraging the recruiting advantages of both companies
You will likely be accustomed to recruiting based on the culture and traits of your old company. Perhaps your old company was a certain size, based in a certain city, ideal for candidates with a certain set of traits, etc. Your new company represents a new set of traits that may appeal more to certain candidates and less to other candidates.
To maximize your recruiting efforts, at least in the short-term, you need to assess and leverage the strengths of both your old and new companies as they pertain to recruiting.
For example, our old company, Contactually, had a strong recruiting network in Washington DC that our new company, Compass, did not yet. Yet Compass offered a more robust career ladder, the upside of a pre-IPO unicorn, as well as more opportunities in mobile engineering, DevOps, and other roles. Combining these strengths would allow us to reach new candidates and strengthen our appeal to other candidates.
Transferring the strengths of your previous company
Eventually you want to stop using the identity/branding/name of your old company entirely, but without the cost of losing the recruiting advantages the old company had.
To manage this, you will need to “transfer” whatever positive reputation or advantages your old company had to your new company. In our case, Contactually was known in Washington DC for having a positive engineering culture, and we wanted the engineering community in DC to re-associate that reputation with Compass.
To achieve this, we often posted our early job opening with language such as “Come join the former Contactually team in building the real estate CRM of the future as part of Compass!”.
All-in on Compass
While you might leverage some old tricks to get candidates in the door, we found that candidates wanted to see a clear identity and plan for our team that was fully focused on our new company.
We came to this realization when our office rebranding caused some confusion for interviewees. This confusion could be doubly felt if we used uncertain language when describing our projects/work/roadmap. While the story of an acquisition makes for interesting conversation, people want to join somewhere that conveys confidence, and it’s easy for an acquisition to sound like you still have one foot in each of two different worlds (which you shouldn’t anymore).
Accelerating our office rebranding, reducing small talk about the acquisition, strengthening our talking points about our roadmap, and including more Compass veterans in the interviewing process all helped us improve our interviewing outcomes once we identified this challenge.
8. Onboard new hires with minimal legacy context
Challenges growing your team won’t stop with hiring — onboarding new teammates is likely to represent a unique challenge in the short-term too.
Your team will live at the intersection of old and new cultures, technologies, and processes. While teammates who were present at the old company will be able to navigate this joint context, it will be difficult for new employees to understand the intersection of the two contexts.
The difficult thing is how and when to expose them to various factors that live in the intersection of the two contexts. Much of this they will need, but may not need all of it immediately, or may not need to understand it as deeply as legacy employees.
To create an onboarding process that progresses smoothly, you’ll need to consider what parts of this shared context to share with them when. Consider an urgency/importance matrix applied to the different things they’ll need in the shared context.
You’ll want to re-assess this onboarding over time because as more time elapses since your acquisition you’ll likely be able to provide less and less legacy context.
9. Avoid tribalism
It is very, very easy for your team to still think in terms of “us” and “them” in relation to your new company, even months after you have joined. This can happen in big ways or small ways, and in innocent ways or less innocent ways.
Allowing us vs. them language to become normalized will put your team at risk of settling into some bad habits. For example, you might be tempted to oversimplify organizational challenges as us vs. them differences. This pre-empts the deeper analysis that might be needed to identify root problems and formulate steps for improvement.
I found it easiest to slip up in small, casual settings, such as eating lunch in a group. As a leader, if you set the example of talking this way, others will find it acceptable… so you must ask others to hold you accountable in the same way that they should hold each other accountable. Openly pointing out to each other when you slip into this way of thinking will help reduce it earlier.
10. Learn how to best affect change
Over time you will surely want to initiate some larger changes that require forms of approval or buy-in from other leaders in the organization.
Because creating buy-in for change can be different amongst companies, the playbook you used at your previous company may no longer work — especially if the new company varies in nature (size, geographic distribution, management style, etc) significantly from your old company.
- Do you need to demonstrate customer impact through a certain lens?
- Do you need to demonstrate the effectiveness of an idea in a low-stakes proof-of-concept?
- Do you need to get buy-in from an executive?
- Do you need to build support from a coalition of peers?
- What are the most valued decision-making factors for certain types of changes? Cost? Productivity? Customer Value?
Seek out advice on this topic from veteran leaders in the organization and take mental note of what you observe to be effective (or not) first-hand. Keep in mind that the best approach may vary based on the type of decision being made or the part of the organization that the decisions are being made in.
11. Learn how performance and promotions are evaluated
Any lingering concerns about fitting in and being valued can cause worry during your team’s first performance review in the new company. The two companies may even have differing philosophies on performance, compensation, promotions, and coaching that may or may not be immediately obvious.
As a leader, you need to explore what success looks like in the new company’s review and promotion processes ahead of time to ensure that your team’s hard work can be properly recognized and rewarded.
Seek out experienced managers in the company and learn what factors are highly valued in performance, what factors are less valued, and what types of preparation can position people best for recognition.
While much of these learnings can be viewed primarily for yourself as a manager, you should also share many of them with your team. Sharing an understanding of this with your team can help them feel more confident about understanding their place in their new company, self-managing their own growth, or collaborating as effectively as possible with their manager about their growth.
12. Move forward with growth mindsets
Everyone will adapt to the acquisition a little differently, which underscores a common management truism — that every person on a team requires an individualized management approach. Every individual on your team is bound to have different aspects of the acquisition or company that they feel more or less favorable about.
Regardless of the plethora of unique individual feelings, helping team members foster growth mindsets will be universally beneficial for maximizing their growth and impact as part of the new company.
A growth mindset would allow individuals to still reminisce about unique aspects they liked about your old company while also fully focusing on using their previous experience to tackle the new and unique opportunities they have now. In fact, the exercise of appreciating and comparing the nuances and operations of different organizations can help people translate learnings and become more effective at operating in a collaborative environment. With this approach, your team should be set for an explosion in personal growth.
If you’re still reading, great work!
With the transition from our acquisition now long behind us, it’s been great to see our team tackle challenging and rewarding problems at a scale that we previously would not have been capable of.
To recap all of the above lessons into a few basic categories:
- Invest in your people — be social, celebrate wins, and encourage growth mindsets.
- Set your team up for success — break down tribalism, re-learn how to recruit, and understand how your organization handles change and performance.
- Be creative with strategy — expect curveballs, audit your new surroundings, continually drive alignment, and consider the breadth of impact.
If you’re going through an acquisition of your own: enjoy it, be thoughtful, and strive to be a great teammate to both those from your old team and all of those in your new team. You’re sure to look back on this time with some amount of fondness and will certainly encounter many learnings of your own.
Are you looking to take the next step in your career? Compass is looking for experienced software engineers who are passionate about solving complex problems with code. We’ve taken a novel approach to building business software — focus on the end-user — and it’s been working. Our users love us. Come help us build the future of real estate!