Ben Gilbert: preference

Transcript context

…Hard to argue with that one. Do you guys have any kind of internal process where you look back or even just isolated examples of what you look for and success metrics of ‘yes, that was a good acquisition and we should do more things like this’? Taylor So one of the things that our team is responsible for under me is the M&A integration function. I’ve always felt like that’s critical to be combined in the same group because otherwise, it breeds a behavior that sort of feels like, “Hey, we're just responsible for banging out the deal. ” It doesn’t matter if you throw it over the wall and someone else will integrate it. That type of thing. I always myself have thought of the job as a growth job. It just happens that a deal is part of it and you have to partner with the entrepreneur and partner with the business owner and sort of be CEO of that growth opportunity until someone else can truly take the mantle that will be responsible for running that business. If you think about it that way, there’s little things where you put a little extra amount of care and attention in things like retention packages. Even though the entrepreneur is telling you that this person is critical, you’re actually sensing that maybe that’s more for historical reasons and they don’t understand that in a bigger company once they’re inside. This person who’s been their right hand person from an operational perspective, there’s three other functions that are going to serve that purpose for them and they’re actually less important so you kind of wait and sort of talk to them and collaborate to figure out how actually – maybe reward them more at the time of the deal, but actually put a little more retention for someone else that their importance is going to go up post acquisition. Those types of nuances. Interesting. If you’re not focused on the integration when you’re doing the deal, you just do things differently. So that’s important. By having an integration function in there, we make sure that they’re in our weekly meetings and that we share learnings and it’s sort of part of the culture. So to me it starts with culture inside the group which is it’s a growth leader function, not kind of a deal function. So that’s one. From a formal, sort of post mortem evaluation process, we commit to reporting out to our CEO and CFO as well as the board every quarter. We do a report for 2 years after a deal that reports against basic key value drivers and metrics there. As you might imagine, there’s a financial one. There’s a product one. There’s sort of employee retention depending on how many people we're trying to retain. That type of stuff. We try to make sure that we’re being hard on ourselves and not just greens across the board, but we’re being honest about where things are sort of yelling red. Every once in a while we’ll do a more formal deep dive post-mortem if something hasn’t gone well. These things are really hard and as I alluded to earlier with the statistics from the Profit From The Core, I always joke that in general this is not NBA free throw shooting. It’s much more hall of fame baseball hitting. Meaning to those that aren’t sports fans, it’s not 70, 80, 90 percent. It’s probably plus or minus 30 percent is not all bad. Our track record, Adobe is actually dramatically higher than that. Every now and then it’s like you make lemonades out of lemons where things didn’t work out how you expected them to, but you have the right team and the culture fit and the product to build from and you went in a slightly different direction. That’s okay too. That goes back to why culture fit is important. If things go wrong and the market plays out differently, you can still create value. There are definitely companies that have meaningful hundreds of millions of dollar bets that are effectively swinging this in complete write downs and we haven’t had that. I think a lot of it has to do with the culture of focusing on thinking about the long range before you even do the deal. So the post mortem and the valuation is important, but it’s more the fact that you know that you’re going to be doing it and you know that that’s what we all care about. That’s what sort of changes the upfront.…

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