On today’s episode of the RecruitingDaily Podcast, William Tincup speaks to Jagdish from Appfire about how to make your acqui-hires feel at home.
Some Conversation Highlights:
Listening time: 29 minutes
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Prior to joining Appfire, Jagdish was Senior Vice President of Talent at PlanSource and a key member of the Human Capital and executive leadership teams at UnitedHealth Group.Follow Follow
Music: This is Recruiting Daily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one overcomplicated topic and break it down so that your three year old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup
William Tincup: Ladies and gentlemen, this is William Tincup. And you are listening to the RecruitingDaily podcast. Today, we have Jagdish from Appfire on. We have a wonderful topic to explore, and it’s something I haven’t talked about. So I’m really, really interested to get his take on this, and it’s How To Make Your Acqui-hires Feel At Home, we’re going to explore a bunch of things. But I’ve done a lot of M&A work in the past and seen a lot of failed and successful M&A transactions. So I’m really interested in this topic, and especially as it relates to the talent part because more often we talk about the finance and accounting and customers and all the other important things but not the talent part. So that’s today’s show. So Jagdish, would you do us a favor and A, make sure I pronounced your name correctly because I’m terrible with names and B, introduce yourself and Appfire.
Jagdish Chugani: Sure. Thanks for having me on. And I’m excited to be here today.
William Tincup: Sure.
Jagdish Chugani: My name is Jagdish Chugani, so you pronounced it super well. And I lead the people function here at Appfire, where we develop and deploy people and culture best practices, or rather I would say great practices that values our employees and their continued success. We’ve done several acquisitions and we’ve also grown organically quite a bit. And in the process, we are building a strong culture, where everyone is empowered to contribute their most amazing work, operate around our core values, and very importantly, make giving back part of our DNA. Appfire is a-
William Tincup: I love that. Go ahead.
Jagdish Chugani: Appfire is a fast growing global technology organization and our portfolio of software products helps teams make work flow.
William Tincup: Perfect. So you mentioned that you’ve done a couple of acquisitions, so let’s start there, not with the specifics of course, but just how did you, as you went through the process and you go through due diligence, you go through all of the whining and dining and all that stuff. But once the transaction is over and the dust settles, the people that were acquired, how did you make them feel special? How did you make them feel part of the new team?
Jagdish Chugani: I’ll actually explain that in a good way. At Appfire, I’ll tell you as part of our growth and success plan, it’s very important that we get our M&A right. Because M&As, mergers and acquisitions, are a critical level of our growth. They say that first impact is a lasting impact. This means how we welcome our new fireflies, and we call ourselves fireflies, into Appfire makes a big difference. Our messaging on day one is not via a memo or a public announcement, rather a video call from our leadership team to everyone from the acquired organization on the day of acquisition, well before even a press release is done. So this way, they get a personal message from the leadership team here at Appfire.
Jagdish Chugani: So we use that messaging actually as a milestone for celebration rather than an announcement. And in that messaging, we keep it relatively simple. It’s basically our messages revolve around how this milestone is a testament to the outstanding team that they have assembled, the rapidly scaling business that they have created, and the products that they have developed. Because these three things should make them exceptionally proud of having reached this milestone where they are being acquired. And when people know that their work is valued, it makes a big difference, they feel energized to do even better work.
William Tincup: It’s interesting, when I was in business school, we were talking pre-show a little bit about this, I was in Cleveland and my finance professor, whom I absolutely love, Sam Thomas, he’s a Indian guy, he said, it’s a trick question, but he asked the finance class he said, “Tell me about this mergers and acquisitions, what’s so special? What do you think is mergers and acquisitions?” So everyone gives their answer, whatever it is. “Okay, so all of you are wrong, there is no such thing as mergers and acquisitions, there’s just acquisitions.” We’re all blown away because he is like, “It’s the most…” He said, “At one point, a company acquires, at one point. And it could be not what you think.” Like in our industry we’ve seen companies that get acquired and then acquiring firm become the leadership team and it’s different the software, the accounting software is the acquired firm’s software. So it all plays out differently. There’s no such thing as a merger in his mind, it’s you acquire.
William Tincup: And I’ve been asked this, how do you judge acquisitions in this space? I said, “Here’s my litmus test, two years later, what was your ability? What was your success rate on keeping the talent?” That’s how I look. I don’t look at customer acquisition, I don’t look at the conversions and all of that other stuff, smarter people can handle that stuff. I look at, you had a really, really great CEO, you had a really great, like for you, you acquired a great talent acquisition team, what’s your ability to keep them? And that, not easy because they were a part of something. They felt like they were a part of something, they had momentum, they got acquired, and then they might have felt like now they’re not as important or not as relevant to this new thing that they’re a part of.
William Tincup: So making them feel like they’re a part of something and then getting to know them and finding out their strengths and getting them to buy in to the new team is not easy. What type of tricks, not tricks, what type of tips and great practices, I like the way you phrased that by the way, great practices do you have for folks on just making… It’s a tough time, it’s a good time because most of them maybe got a little bit of a payday, they had some stock, whatever. And at the same time, they might feel a little bit lonely. Like, okay, our parents got divorced, now what? How do you make them feel special?
Jagdish Chugani: I’ll share with you because you bring up a very good point. The way mergers or just acquisitions as you may call it, is better done if the focus is on the people integration strategy much more than the HR integration strategy, I would say. A people strategy may seem synonymous within an HR strategy, but there’s actually a distinction. When an HR strategy is, I’ll tell you what, an HR strategy is more of a plan for managing the employee logistics, the data, and the system integration points that you just brought up. A people strategy is a plan about boosting trust and engagement with the employees, value that I’ll tell you has a much bigger and longer term impact in how companies are able to retain and, in fact, promote the work that people do.
Jagdish Chugani: I’ll explain that a little bit further in a moment, which is HR strategies, if you think about it, include processes of how recruitment is done, how onboarding is done, how compensation is decided. People strategies are different, they outline ways to create a stronger culture, how managers assess and nurture employees capabilities, and make it more transparent and build a longer term relationship between the employees and the organization. You know what this does? Is it puts skilled people in the right position to deliver what takes them to achieve their business goals. And it also doesn’t mean sweating on the small stuff because that small stuff counts in a big way and is best addressed on day one or very shortly thereafter.
Jagdish Chugani: Now, we help all the acquired employees understand about our business. We understand about their business, we understand about their culture. New employees need answers fairly quickly. And a lot of the foundational stuff, which is stuff like, well, my compensation and benefits change, will I report to someone different? Are any new policies applicable to me? What changes in my day to day work? That’s what is top of the mind on their day one. And how we are able to understand those questions and help them get answers fairly quickly, allowing them to feel welcomed, allowing them to feel that they are in the right place and that they are being valued, makes it a world of a difference as they look at the organization that acquired them to be a long term employer for them.
William Tincup: Dumb question alert, when we look at the acquiring firm or the acquired firm, do we separate talent into the critical versus non-critical? And again, dumb question alert. But what I’m really trying to figure out is, when we acquire 500 employees, is it that we’re looking at, okay, the 500 employees, they’re not all painted with the same brushstroke, within that, let’s say there’s 20% of that we have to keep, it’s just that’s the heart and soul and the breast and brightness, however you want to define it. But we have to keep them and we’re going to map out strategies to keep them. And if we keep the other 80%, fantastic but if we don’t, okay, well, it doesn’t really harm us. Now, again, I preface that by saying dumb question alert because that could be a completely dumb way of looking at this, and I’m okay with that. What do you suggest for folks?
Jagdish Chugani: Every organization has a way of looking at the acquired employees breadth. Which is, at least the way we look at it is every employee is important, we will have a place for every employee, why? Because we are growing so fast, we are adding not only products to our portfolio, we are adding people to our organization. And for us, we have a people first culture, everybody is important. So yes, we do look at those individuals that make a slightly bigger impact. But guess what, they’re able to make a bigger impact because of all the other employees that are also coming as part of the acquisition. So we make it a very intentional effort to make sure that every employee has a way to see themselves grow and grow a career here at Appfire.
Jagdish Chugani: Now, we have also got to realize that expecting that everyone will stay with us two years, three years down the road is just not practically doable, we respect that. But what we want to do is want to make sure that every employee is retained, at least that’s how you plan for it. And if you plan for it very intentionally, you will win in retaining the vast majority of employees. And it’s not just about retention, it’s about making them feel that they are a valued part, that they are growing in their careers, that they see a future in the organization for themselves and for everybody around themselves.
William Tincup: I love that. One of the things that I wanted to make sure to ask you about while we talked about this is a people first strategy. I know that you’ve got that with Appfire, but also as it relates with acqui-hires. How do you bring them into your belief system around people first?
Jagdish Chugani: Here at Appfire, our leadership is very clear about one thing, and that is that businesses are built off people. People aren’t replaceable, and you may have heard it differently from different people, but we believe people are not replaceable. We all are seeing people as unique, different individuals with wonderful ideas. And the idea is to get those strengths to the table. How we stitch it together and how to find everybody’s pulse and create a win-win situation, not only for Appfire but also for the individual. Because that is what makes the best business sense. So that’s the way we look at it.
Jagdish Chugani: So it’s company-wide, and that’s how we guide our decisions from our leadership team to how we are driving a talent management strategy. We have grown four times in the last several months and we are positioning ourselves as focusing on our people and their growth. Because once you do that, you are able to attract and retain the exceptionally engaged and talented team that we have. We treat employees, I would say, as humans. Our core value number one is be human. So that’s how we guide our decisions, that’s how we guide our outlook, and that’s what guides our behavior.
William Tincup: I love that. So two things I want to go back to because I think you did a wonderful job of explaining how you communicate. So the acquisition has happen, here’s what we’ve learned about your culture, here’s about our culture and the discussions that need to happen. But I want to go a little tactical for just a second. How do you evaluate, how do you assess the skills of like you’re about to get 500 people, fantastic, great news, good news, bad news. You’re about to get 500 people, good news, bad news is you’re about to get 500 people. How do you assess to find out what actually their skill level is, what they’re good at, maybe dreams, aspirations, passions, all that other stuff too? And then I’ll dovetail that into the next thing, which will be internal mobility. Once you figure out what they’re good at, great at, how do you get them onto the path of what’s next for them, in this case inside of Appfire, but for your clients, inside of their companies as well.
Jagdish Chugani: So it is part of the post, this all starts after the acquisition. So once people know, we start conversations with their managers, we start… Of course, it starts at the top. And then we peel the onion to understand each one’s strengths. We have a regular aspect of performance management. We look at each individual from a people function, we look at it in terms of understanding people’s skills, their strengths, their areas of opportunity that we can help them grow in, and the skills that they have. So we keep an inventory at our end of a number of these things. And the intent here is to make sure that we understand A, and we are able to leverage them. The idea behind this whole concept is to look at across the organization, how… Because we are growing at such a fast pace, we are also doing a lot of hiring externally. So where can talent be leveraged better because of the skills that they bring?
Jagdish Chugani: And we are also geographically quite dispersed. We have several employees in Europe, several in the US, several in India, and several in many other countries scattered across the world. So we are totally about 580 plus employees. At the same time, they are all scattered. And trying to bring them from understanding of skills is a critical part of how we build an inventory of that. And then we start the process of having them continue their focus in what they do and start to then slowly evolve into a situation where we drive internal mobility. We’ve grown so fast in the past 16 months or so with 16 acquisitions. It’s a situation where we are now elevating and accelerating the way we are doing internal mobility. So internal mobility is a critical aspect of how we will grow the organization.
Jagdish Chugani: We’ve started on this path very intentionally and where in a structured fashion, where we are starting with having leaders who were earlier part of managing a legacy engineering product now take responsibility of products that were in some ways competitive to them, were in some ways even not part of the product portfolio or the category that they were operating in. And they are now being allowed to manage individuals in geographies that they have not managed in the past. So allowing them the ability to have a visual direction outside of their comfort zone in the past is a starting point. As we start to think about the managers, we will now start to look at individual contributors as to how they can expand their horizon into products, into technologies, into geographies that they did not have opportunities in the past.
William Tincup: I love that. So two questions that come up, one is how do you, and the audience will ask this, of course, is how do you measure success with acqui-hires? What do you personally and what do you give advice for your clients? What’s the either a metric or how do you gauge your success with acqui-hires?
Jagdish Chugani: We have a simple measurement, which is the employee net promoter score, which is primarily to say, would they recommend Appfire as a place of employment for their friends and family? So we measure that on a regular basis. And given that we have done 16 acquisitions in the last 16 months, it’s just a start. So we now have starting points to think about what our current eNPS is. And then we will watch it on a trending basis to measure that element of success. Now, we can measure this in multiple ways, we want to keep it simple. We want to look at it from an employee net promoter score perspective. And we will drive and measure our success based on that starting number.
William Tincup: I love that. Well, I love that on so many levels though. But Advice that you give or would like to give for those that have been acqui-hired. So now let’s flip to the other side, and you’re giving advice for those that have been acquired. What’s the advice that you’d give them, questions that they should be asking, things that they should be thinking? They’re going through a lot of emotional rollercoaster stuff, right?
Jagdish Chugani: Yeah.
William Tincup: But what advice would you give those folks?
Jagdish Chugani: I will say the first thing is celebrate. The ability for them to reach this milestone is a point of celebration, it’s also the beginning of a lot of good things to come. Why? Because there are more opportunities, one plus one is now equivalent to three in our perspective. But more importantly, also I actually encourage them to think about the what’s in it for me factor, the within factor. So in terms of the within factor is look at does this acquisition really allow for the legacy mission to actually now advance? Will this now advance also your career? Will this advance new abilities for them to learn? Will this advance new opportunities for them to grow into? So it’s not only growth for them, but also growth from what they’ve been doing and now taking it to the next level.
Jagdish Chugani: Because really one thing that we want them to also fully appreciate is that we will not impose what we currently do at Appfire onto them. What we will want to do is actually grow our culture into evolving culture by welcoming them. So they are not only bringing themselves into the organization, they are bringing their culture into our organization. So now we are evolving our Appfire culture every time we do an acquisition because we are learning from them, we want to learn from them. One thing that I will definitely suggest them to think about is not having them to think about us versus them culture and that us versus culture starts by us, the acquiring company, to set the stage forward. And once we do that, the response that we have seen in the past work out is pretty phenomenal.
Jagdish Chugani: And really actions speak words. Their initial thoughts are, will I have my job? We’ve been bootstrapped for a variety of different reasons, will I now be able to hire more people or will I be able to see more colleagues coming into the organization? And we show them that in all our other acquisitions how we’ve invested more, how we’ve added talent into their teams, how their products have now become stronger, how their products are now being accepted by newer clients that they may not have had access to. So when they see their success and the work of their success and they keep an open mind on it, it makes a world of a difference in terms of how it is one plus one equal to three.
William Tincup: I love that. I lied, I said that was the last question. One more before we wrap up, and it’s about culture because you had mentioned culture early on and about understanding their culture and your culture. When we acquire a firm, does our culture change? And why I’m asking the question and maybe even the way I’m phrasing it is I’ve always thought of culture as fluid, it’s never static, it never going to sticks in one spot, it’s moving and growing and all this other stuff. But I want to get your take on okay, you acquired a firm and let’s say they had a distinct culture and you have a distinct culture. Does some of that rub off on you? How do you think of culture? And how do explain culture to your customers as it relates to an acquiring a firm?
Jagdish Chugani: Actually our perspectives match. And I’ll repeat what you just said, which is what our perspective on culture is, is that a culture should never be static, it’s always fluid. And therefore if we have to embrace all the new people that come into Appfire and allow them to grow and change, we are also bringing with that change, the uplifting of our culture. If we were to measure culture, our understanding is, how do we raise the benchmark on culture? How do we make it inclusive? Because we have now added people from different cultures, we now want to learn from them what their culture is, what are the practices that we can now embrace. We do not want to impose our culture because our culture is not static, it is changing. We will be bringing in new ideas and cultures because of geography, because of different backgrounds, and so we embrace it. And it allows us to become a better Appfire. And I’ll give you an example here, at Appfire, what we’ve done is we’ve started to capture memorable moments that people remember from their prior companies.
William Tincup: Oh, cool.
Jagdish Chugani: In one of the acquisitions we did, the founders of that company mentioned how in the past the geographically distributed team would travel to one location for meetings, and of course COVID did pause that lately. But in this past November, our CEO and our president traveled to Europe for what we call a bring the fire tour. We encouraged everyone in Europe to travel within the zone of safety that they feel comfortable with to meet with them, completely paid at Appfire’s expense. So in the process, what they saw was how we were intentionally wanting to learn from them.
William Tincup: That’s genius.
Jagdish Chugani: Respect them for the legacy culture and embracing it rather than saying, hey, this is our culture, this is how we do things.
William Tincup: You’re looking at it not as assimilation.
Jagdish Chugani: Yeah.
William Tincup: You’re basically saying, hey, listen, there’s great things that you were doing, there’s great things that we are doing, let’s do the best of both worlds here, let’s bring in some of the things. I love that, great advice.
Jagdish Chugani: That’s the reason why we acquired them, we wanted to learn from them [inaudible 00:27:31] things right.
William Tincup: At the end of the day, that’s actually why we did the acquisition, and it wasn’t just… Especially as it relates to the talent, the people side of this equation, sometimes we do acquisitions for other reasons, but for the people side. Jagdish, this has been absolutely fantastic. Just a great topic, and you’ve got such a wonderful approach. So thank you so much for carving out time for the audience.
Jagdish Chugani: Oh, thank you, thank you. I loved it. I absolutely enjoyed it. Thank you so much.
William Tincup: Absolutely. And thanks for everyone listening to the RecruitingDaily podcast. Until next time.
William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.