Clarity is a public relations firm that offers communications strategy, positioning, marketing, content creation, and other services to companies in the fast-moving world of global business.
As Global COO, London-based Alex MacLaverty guides the growth of this ambitious agency. Part of that growth has been through recent strategic acquisitions of complementary PR agencies.
Alex explains why they chose those specific agencies, how it will change their business, and why they had never met the team at one of the firms before the sale.
We also talk about how they handled integrating two teams when they bought the other firm so that they had a running start when the deal was signed.
In both cases, Alex and her colleagues were guided by a change management model known as ADKAR.
In our talk, she explains the five parts of that strategy and why it’s key to follow in times of large-scale changes in an organization to ensure all the key players have the right mindset going forward.
Tune in for all the details on that, as well as…
- The biggest drivers of their strategic acquisitions
- How they prevented client attrition
- Why they don’t forget the people side of acquisitions – and how that impacts operations
- What they do to get buy-in at a “deep level” from new team members
- And more
Listen now…
Mentioned in this episode:
Transcript
Patrick Stroth: Hello there. I’m Patrick Stroth. Welcome to M&A Masters where I speak with the leading experts in mergers and acquisitions. And we’re all about one thing here, that’s a clean exit for owners, founders and their investors. Today I’m joined by Alex MacLaverty, global CEO of Clarity PR. Clarity PR defines itself as an agency with the heart of a startup working with rebels and titans.
We take risks, solve problems, learn, adapt, and deliver fearless global communications. I like that fearless part. This will be the first of two conversations I have with Alex as she shares with us her perspectives on the importance of communication throughout an M&M process. Today as strategic acquirer, Clarity PR has had a number of acquisitions lately. Then on the next recording, as an advisor to other buyers, both strategic and financial, Alex, welcome to the program and thanks for joining me today.
Alex MacLaverty: My pleasure.
Patrick: Before we get into communications and Clarity PR’s fearless communications and everything, let’s give our audience a little bit of context. How did you get to this point in your career?
How Alex Became COO of Clarity PR
Alex: So, I’ve got about 20 years in primarily technology and PR. I started out as a commerce consultant and then moved into agency management as tends to happen. I’ve worked in agencies large and small with some of the world’s largest tech brands as clients.
And I’m based in London, as you can probably tell by my accent, but my role for the last 10 years has been global, overseeing businesses across the US and Asia pact. And Clarity, I mean, Clarity is a very fast-growing, ambitious agency. We’ve got offices in London and across the US. So my role now is really all about ensuring we’re set up in the right way to achieve our ambitions.
Patrick: Well then we’re going to talk about communications a little bit later, but, you know, let’s put it in the context of communications in an M&A process from your perspective as an acquirer, not advising outsiders. But let’s talk about, you know, give us a couple examples of experiences you’ve had with being part of Clarity through various different scenarios, because not every acquisition is the same.
Alex: No, absolutely not. And I thought I’d share with you today the examples of our two most recent acquisitions. The first was completed in around November of last year. And that was the acquisition of a complementary PR focused agency out in Los Angeles, which we plan to add as a standalone office within our US business. The second completed in around December time of last year and was of an agency that was much more focused on technology startups and digital communications.
So most of the team we’re based in London with a few people out in San Francisco. And this deal was much more focused on integrating their team into our existing London team. So slightly different setups for each of those deals. But not only that, they’re also very different in terms of the way that we roll them out. And we sort of manage those acquisitions.
Due to the nature of the LA deal, we had the sort of interesting experience of not actually being able to meet with any of the team on the ground before the deal completed. So we haven’t met any of the key players, obviously, we’ve heard a lot about them and all good things. And we’re very excited to meet them. But we hadn’t actually spoken to any of the people that were going to be running the business for us out in LA. And the first time I met them, it was to tell them that they had been acquired.
Patrick: So this was big-time confidentiality at the extreme.
Alex: Yeah, absolutely. There was a lot of focus on the paperwork, getting the paperwork all done correctly, and making sure that that had happened before we said anything to anyone. So it was a very kind of secretive process. So there wasn’t really the ability to get much done behind the scenes in terms of communications, putting together a plan for that.
Or any of the operational side of things which obviously had to follow. So it was quite a, everything was resting on the moment that the signature happened. I jumped on a plane over to L.A. as soon as I could, and then was able to meet the team. But it was an interesting experience too because when I got there, I felt like I knew them all already.
I knew so much about them, their business, how things were working. And of course, they’d never heard of us before. They had no idea this was about to happen. So it was an interesting, not a clash, but it was an interesting differentiated between sort of my feeling going into it and obviously, they’re feeling being on the receiving end of our attention. So it’s quite an interesting experience.
Patrick: Yeah, there’s a lot of pressure there because this isn’t just you’re gonna have to make a really good first impression. This opening message is, Hi, you don’t know me, but we own you now. What was the challenge like? How did you guys do that?
The Big Acquisition Introduction
Alex: I prepared very thoroughly in terms of trying to understand as much as I could without meeting them, the team, what will likely to be their concerns, their triggers, the things that they were going to be most interested in finding out about us, but also working out the best way that I could position our business for them so that they would understand their role moving forward within it.
It was a bit like some sort of strange blind date where I’d done all the cyberstalking and I sort of found out all the facts about them, but they hadn’t done the same on me. So was trying to make sure that it was a, still felt like a collaborative process, even though actually the deal was already done. And to be honest, there wasn’t much they could do about it.
Patrick: I’m gonna take your analogy there, instead of a blind date, it’s an arranged marriage.
Alex: Yes. Yeah. Totally, yes.
Patrick: There were mechanics that go into this and we can talk about later. What about the other situation?
Alex: So, the other deal, the London deal was totally different. From very early on, the teams were told about the plan to that we were going to acquire the business and integrate the teams. It was important to us that we did that as early as possible. I think because so much rested on the teams getting on with each other.
But there were also commercial imperatives. There were already clients that would have benefited from the combined team that we wanted to work on. And it also obviously made a lot of the operational planning much easier and communications planning much easier when we’re able to have the teams working closely together. So, in that deal, the team that we were acquiring actually moved into our office several weeks before the paperwork had been finished.
Patrick: Sorry, say that one more time.
Alex: So the team that we’re requiring moved into our London office several weeks before the paperwork was done. Which I appreciate is quite unusual, quite a risky move. And, you know, it was fun. I think there’s something, you know, we’re in a very lucky position to be able to work in that way. There was a great cultural fit between the teams anyway, which was one of the big drivers for making the acquisition and we felt that the team on both sides would respond better to being brought in as early as possible getting to know each other, raising their concerns as we went along, rather than having it landed on them suddenly.
And that absolutely proved to be the case. We did have to swear everyone to absolute secrecy. And there were some tricky moments even just having the team members walking in and out of our office in case somebody saw them and was able to figure out what was happening, some challenges around that.
But actually, it worked out incredibly well in the long run in that we have no client attrition, no team attrition, and due to the acquisition, which is a quite normal, you know, thing to happen in these circumstances. But more importantly, the team felt like family. Once the paperwork was done, we opened some champagne, but they’ve been part of the family for the last few weeks. And so it was a very natural sort of harmonious thing to do.
Patrick: You were already joined and it was just a formality at that point.
Alex: Yeah, it was. It was as if we’d all been living together for years before we actually got married.
Patrick: Yeah. The two extremes, which is great. And both of them, and it resulted in successful acquisitions, successful integration, which is evidence that there’s no one way to do these things.
Alex: Yeah, absolutely. And, but I think it’s, yeah, both were interesting learning experiences. But I think, you know, I know which way I’d prefer to do it in the future.
Patrick: Gotcha. There was a lot of trust involved and so forth that has to come across with this. I think that with what, you know, Clarity PR does and what you do specifically dealing with communication, that’s a skill that I believe a lot of us take for granted because we’re communicating in one way or another all the time, formally, informally. And so there’s not the same appreciation for.
And when you’ve got situations where you have a potential volatile situation where the wrong word, the wrong tone can damage a relationship, sometimes irreparably, that’s a big balance that’s got to be there. Now it’s your profession, is communication. So clearly you’re not winging it when you do this, okay? So there’s got to be a plan in place. Is there, describe your process or your plan in assessing a situation then how to deliver communication, when, how, all that.
Alex: So, a long time ago, now I was introduced to a change management model called Adkar, ADKAR, which I found to be incredibly useful in any number of business and personal situations actually, in terms of planning out the right way to move forward with something big that requires not just a structural change, but a behavior change, a mindset change, an emotional acclimatization.
And that’s really been at the heart of the processes that we’ve focused on around M&A and making it successful. And it’s a really great way to make sure you bring everyone along on the journey with you. And I think what it does, and I’ll sort of explain it a little bit shortly, but what it does is it allows you to, I think when you spend so long working through a deal, you as I was saying earlier, you feel like you really know the business, you know, the people you get really into the details of it.
But you tend to forget quite easily that the people who are actually going to be on the receiving end of all this, the people who actually work in the business, this is all new to them. And so it’s very easy to skip far too quickly to the how, the operational side of things. Okay, so we’re going to change this, we’re going to do that we’re going to move things along without actually getting their buy-in.
And so this process just is a very useful way of reminding you at every stage that the buy-in is probably the most important thing. And if you’ve got that emotional connection and that desire to be part of the business, then you, the operational stuff kind of works. itself out. And people are much more forgiving of any glitches in how the new structure works. The Adkar model is a really good way to do that and it makes things a lot easier in my experience. So, if I just talk you through, I’ll talk you through what each of those steps is, if it’s useful. I can explain a bit more to your listeners.
Patrick: You will have shown us and have this written out. So those of you who were driving or something listening, don’t worry because we’ll, you don’t have to pull over and take notes. We’ll have something available. So ADKAR
ADKAR Change Management Model
Alex: That’s right. And you can, I’m sure you can, you know, get the book and read it yourself. But it’s fairly simple. So the A stands for awareness, which is awareness of the need to change. So actually telling people, we need to make a change here for all these different reasons, which hopefully, if you do it right leads to D which is the desire to make that change. So before you even start making any changes, you’re ensuring that people understand why there is a need to change and that they really want to do it and that they’re on that journey with you.
The K stands for the knowledge of how to change. So actually, what does this practically mean? And the A stands for the ability to demonstrate the right skills and behavior. So that’s why you’re training people up, you’re arming them with the tools that they need to adapt to new processes, systems or different offers, whatever it might be. And then the R stands for reinforcement. So to make the change stick, you can’t just do this once and then think Oh, it’s done. You know, everyone’s moved in, it’s fine, let’s just crack on with our normal business.
The R also means that you actually almost have to start right at the beginning again, go back to the A, and reinforce with people why we made the change, what are the results people are seeing and back that up so that people really stick with these new behaviors rather than just thinking back into their old ways. It’s very, you know, everybody knows that humans don’t like change and will naturally go with the easiest route, which is usually an old way of doing things in a change situation.
And so, what we found is that, if you can follow this methodology, it really means that everybody who’s involved on the leadership side of things in making that change happen is thinking about creating a sort of heartfelt change in behaviors and understanding and all the rest of it rather than just an on the surface, people are doing things differently, but actually, they don’t like it or they don’t believe in it.
And if you can’t get that emotional buy-in, and that sort of heartfelt support for what you’re trying to achieve, then that’s when I believe you see the attrition. That’s when you see people going back to their old ways, non-compliance with processes or structures. It’s where a lot of these deals seem to fall apart.
Patrick: Well, it underlines something I’ve said ever since I got into mergers and acquisitions. This isn’t Company A agreeing to merge with Company B. This is a group of people here choosing to work and join forces with a group of people over there and then the two of them coming together. And if it’s successful, the whole is greater than the sum of its parts. I like the way you talk about this where a lot of people, particularly if they’re just hearing about a sudden change and a change in job is foundational.
I mean, look what people are going through today as we record this. When this change happens, they’re thinking, What’s in it for me? What, how is, how am I impacted? And I like the way that you outline without getting personal, here’s why change needs to happen. Otherwise, there won’t be, your survival could be at risk. So there’s this change, this isn’t being done at the whim of some executive.
And this is, you know, we all want to go in the direction, I like to desire because you’re getting everybody to go the same direction. And then you give them the tools on how to do it and then you follow through. And reinforcement. I agree, people, sometimes a lot of us need to be reminded over and over again, particularly as you’re going through the adjustment process that, you know, it’s out there. So that’s a great plan because then you can structure the communications and you can pivot from there as issues come up, I imagine.
Alex: Yeah, absolutely. And when problems come up, you simply start from the top again. So you start, go back to the awareness. When you see problems happening in terms of, you’re not seeing the behavior change you want to see or people aren’t getting with the new systems or whatever it might be, signs that it’s slightly unraveling, it tends to be because they don’t believe in it.
So you have to go back to the beginning again and remind them of the need to change and try and reinstall that desire for it to work. And so I found it to be very helpful. It works outside of M&A obviously, as well in lots of other, you know, any changes within a business environment and a personal environment actually.
Patrick: A lot of people need the why. You know, why are we doing this? And once they, whether they accept it or not, at least they understand, you know, the reasons that are supporting the change in environment, whatever. And so they go through that. So and that’s, you’re not just advising other firms about this professionally. You were doing this yourself. So if you’ve exercised these exact steps with your processes.
Alex: Yeah, absolutely. But also advised, counseled lots of clients that this is something that they need to be doing. If you look at the way that governments are trying to get people to change their behaviors at the moment, you know, it has, people wouldn’t stay in lockdown if they didn’t believe in it. And the moment they stop believing that there’s a good reason to do it, they’ll go out again. So I think, you know, any kind of, if you’re trying to communicate effectively, it has to be to do with the heart more than the mind in many different ways,
Patrick: Especially for those of us who had to avoid cutting our hair for eight weeks. Well then, as we’ll talk about Clarity’s, what’s an ideal target for you? For our listeners out there, I mean, you’re out there, you’re looking at PR companies, give us ideal target for what you’re looking for.
More Isn’t Always Better
Alex: Yeah, it’s kind of, it’s easy in some ways to say and hard in others because we’re very ambitious and we’re a very agile kind of agency. And so while we’re always working on a number of intentional strategic, very well thought through plans and deals and we’re also very open to those kind of serendipitous opportunities that just come up through having the right relationships.
So there’s a combination of the very targeted and strategic and the opportunistic. I think currently, our focus is really on businesses that help us do probably one of four things that help us expand geographically. So give us a new location that will be useful that broaden the services we can offer that open up new vertical markets to us or that strengthen our existing teams. So there has to be ready, you know, we don’t want to do these deals for the sake of it. They have to add something to our existing business. But we look for, you know, we look for different things in those businesses.
There’s got to be something special about them. We’re not interested in being an average agency and so we don’t want to acquire average agencies that do, you know, standard boring work. We’re looking for something a little bit special. And so there is an element of gut feel to it as I think most people who do M&A work, you know, there, you can look at a lot of spreadsheets but there has to be something that makes you really excited to do that deal.
Patrick: More isn’t better, more is just more.
Alex: Yes, exactly. Very well put. We’re also very conscious of finding deals that are going to be the right size for us. And we’re not a massive agency and we don’t particularly want to be massive for the sake of it. As you say, more is just more we want to so we’re looking for agencies that are going to be a good fit but aren’t going to overwhelm us. You know, that Going to be too big for us to handle or that will change the way we do things to significantly. But I’m also looking for a cultural fit.
I mean, it’s absolutely crucial. And the work that we do communications is all about the people. So if the people bit isn’t a good match, there’s literally no, you know, you’re not buying anything. All you’re buying is a fantastic team, hopefully, really. And so it’s important to us that the fit is right and that there’s a really good match on that front.
Patrick: Yeah. Fit’s one of those real difficult elements to identify. It’s one of those intangibles but you’ll know when you see it.
Alex: Yes, I totally agree. And I think obviously, and then the, you know, the standard stuff, it’s got to be a good business. It’s got to be, have a great team. It’s got to have a, you know, a strong client base. All of those things are important, but I would say usually, the cultural fit almost going to clinch it as to whether we’re going to do the deal or not. Even if it was a great business, if the cultural fit wasn’t there, we probably wouldn’t go for it.
Patrick: So Alex, as we record this, we’re hopefully in the second half, the downslope of the settle in place COVID process right now. So, understanding that things do change quite a bit from week to week, actually, I don’t want to ask you to go out on a limb there. Give me a prediction, you know, where do you see, you know, transfer M&A, transfer activity, either globally un public relations to communications or for Clarity PR. I mean, what are you seeing? And make it whatever timeline. Six weeks to a year in, what do you see out there?
Alex: I think from our business perspective, you know, Clarity is in a really lucky position, our business is still growing and fingers crossed, we’re going to remain in a strong position. So we’re still powering ahead with a number of deals that we had in the works prior to this happening and we’re still on the lookout for more deals to be done looking ahead, I think we’re seeing something similar in the market from our clients.
You know, we work with VCs and PEs and things like that as well, is that deals that were in the pipeline are getting done. And there’s a lot of activity on that front to close out deals that were already in the works. I think what remains to be seen is how many new deals get struck over the next few months, given all the uncertainty around. I think there is a lot of nervousness, obviously, in the market.
So how this next phase goes, I think, will have a lot of impacts on how much, how many deals happen towards the back end of this year. I think in terms of the work that we do, you know, as a communications consultancy, there’s never been a more important time for people to have a good comp strategy and not just in terms of promoting your brand or whatever it might have been in sort of normal times.
But as we move into, you know, global downturn, quite possibly, it’s about things like internal comms challenges. It’s about being able to handle a crisis in your supply chain or whatever it might be. It’s about communicating effectively with your customers and your clients. And the brands that get it right at this time, you know, will obviously come out of it much better at the end of this than those that bungle it.
And I think we would be seeing larger brands suffering because of the way that they’re handling this crisis. So I think it’ll be interesting to see what that does to the shape of things when we come out the other side and who will still be standing because it won’t just be down to sort of the economics of it, demand. I think lots of it will be how businesses have treated their clients, their staff is going to be really important and obviously, commons has a lot to do with that.
Patrick: Also, you’re gonna want to get that message out. You know, we’re back. We’re open. We’re back to business or we’re back, we may not be ready at full capacity, but be patient.
Alex: Yes. Absolutely.
Patrick: Those are the optimists out there. Alex, how can our listeners reach you? How can we find you?
Alex: You can go to our website. Just www.clarity.pr. And I’m, you can email me directly at Alex, ALEX@clarity.pr. And be, yeah, happy to be, to hear from people.
Patrick: Well Alex, thank you very much and look forward to speaking with you again soon.
Alex: Thank you.