Janaki Kumar, Philip Haine, Michael Brown
Are you a user experience (UX) team manager affected by a merger or acquisition (M&A)? If so, you are not alone. M&A is a common business expansion strategy in the technology industry. To name a few large acquisitions in the recent decade: Oracle acquired PeopleSoft, Siebel, and Sun Microsystems; Facebook acquired Instagram; Google acquired Motorola, YouTube, and Waze; SAP acquired BusinessObjects, Sybase, SuccessFactors, and Ariba. Recent improvement in the global economy will likely increase the pace of corporate acquisitions.
Whether you are part of the acquired company or the acquiring company, an M&A event presents complex challenges to UX professionals, because customers, end users, and stakeholders perceive their products through the experience. UX leaders are responsible for managing their teams through the transition while designing the experience on behalf of the newly combined business entity.
Here, we provide a framework for UX leaders to assess their options and manage the impact of an M&A event on their teams, and to help such leaders play a proactive role in shaping the UX strategy of the combined entity. This set of best practices is based on insights gathered at CHI 2010 and 2011 panels [1,2] and on the personal experience of the authors.
The activities the UX leader needs to manage fall into three categories: people, product, and processes. A UX leader must take care of their teams, shape and execute the new UX strategy, and streamline UX work processes in the new context. These activities may be further organized along a timeline: before and after the acquisition (Figure 1).
If you are involved in an M&A discussion prior to the event, you are one of the lucky few. Typically, these discussions are held under strict confidentiality with only a select few representatives of both companies participating. It is not unusual for such discussions to involve just the business and technology experts, and not include UX representation.
An important lesson is to engage in the UX pre-merger activities to acquire as much information as possible, even if you are not formally instructed to do so. Post-merger, little time will be available to make decisions. The better prepared you are in advance, the higher the chance of a successful transition.
However, if you are involved (or can work behind the scenes), you have the opportunity to influence the process in several ways.
People. In some instances, an acquisition is motivated by a talent-grab strategy—an "acqui-hire"—where the primary asset being acquired is not technology, but highly skilled people. In such cases, it is important to evaluate the talent before the acquisition to be able to influence the outcome. There may be limited access to information and direct contact may not be possible, so UX leaders will need to formulate their judgments based on publicly available information such as professional social networks (e.g., LinkedIn), content from public portfolio sites (e.g., Behance.net), and an assessment of the acquired firm's published design work.
Product. Preliminary product evaluations may be conducted prior to an M&A event. In some cases, a UX leader may recommend not to go ahead with the acquisition based on their evaluation findings.
Sometimes there is a bias on the part of the acquiring company that the user experience of the acquired products is superior. This can be the result of boardroom demos containing only the best examples. It can also be the result of market perception and not directly the result of better UX design.
Another issue to consider is that any product evaluation you may be able to conduct is on a current release already in the marketplace and may not reflect the direction of the next-generation product under development.
Once the M&A is formally announced, UX managers affected will have an active role in managing the people, formulating a coherent UX strategy, and evaluating the design processes in the context of the new stakeholders.
People. Expect a period of uncertainty and an emotional roller coaster post M&A. At first, it may seem like business as usual and the team may not perceive any changes in their day-to-day activities. When the changes start to happen, they may feel less secure and more anxious. Some team members may have high (and perhaps unrealistic) expectations for new opportunities in the combined organization. When reality starts to set in, and their design work is directly impacted, there may be feelings of frustration. Eventually, the emotions will even out and the teams will get used to the new normal.
It is important for UX leaders to set expectations and manage team emotions with care, since it is not unusual for high attrition to occur following an acquisition.
A typical event that fuels extreme emotion is when products designed by the UX team are canceled due to portfolio overlaps between the two companies. Typically these decisions are based on which product has greater market share or customer base, and not which product has a better user experience, leading to high frustration for designers, who inherently value UX quality.
The period of uncertainty is directly proportional to the size of the organizations involved in the M&A. If the acquired company is small and it is a "tuck in" acquisition, the period may be relatively short. If the companies involved are large, however, expect a prolonged period of uncertainty.
Comparing the UX maturity models of both companies can provide valuable insights into the culture clash ahead. Maturity models are an indicator of how stakeholders such as marketing, product management, and development will engage with UX teams. Low-UX-maturity companies are engineering- or product-led, and they engage with UX only for tactical support. Companies with mature UX models are design-led and will engage with UX teams on a strategic level.
During the post-acquisition period, UX management will need to assess the cultures of both companies. This will determine the UX engagement model for the newly combined organization. During this period, there is often the opportunity for the UX leader to draw from elements of the more mature side of the merger to educate the less mature side.
Also, it is useful to understand the power structure. How are product decisions made in the new organization and who has a dominant voice? This is a critical question that will enable UX leaders to determine the new power structure, engage the right stakeholders, and shape a shared vision.
Product. Post-acquisition, an in-depth product evaluation is possible. The shroud of confidentiality has been lifted and new versions of products under development, instead of the older products that are on the market, can be seen and assessed. Typically, representatives of the product, technology, and design teams work together to conduct this evaluation for each product area.
To be successful, the new UX strategy needs to be built around the business rationale for the acquisition. For example, the reasons could be to diversify the product portfolio, increase market share, augment the portfolio, or complete the portfolio to create a suite. Particularly in the case of an acquisition executed to obtain market share, there will likely be product duplication to resolve. When an acquisition is driven by a desire for diversification, there is usually less product overlap but often a strong need to quickly integrate products into a suite or product bundle.
Based on an understanding of the business goals, UX leaders may recommend one or a combination of the following five strategies:
- No change. If the acquisition was made to diversify or go into a new market, it might be appropriate to leave the products as is. Pausing to restrategize the user experience may affect the momentum that the acquiring company was seeking to generate and maintain.
- Rebranding. Rebranding involves going through a UX design exercise to unify on the identity of the combined business entity. It may stop at the visual layer or go deeper into the interaction behavior of the products of both companies.
- Co-branding. Co-branding—putting forth the brands of both companies—is typically done if both companies have strong brands in the marketplace. Co-branding the UX communicates to customers, end users, and stakeholders that the acquisition has occurred but does not go deeper. Co-branding is handled on the visual design level and does not involve the interaction details.
- Connecting. If the users of one company's products will also use the other's, it is important to connect the experiences via convenient links. These connections may be done on the user interface layer through a common launchpad experience or in the data model and application layer. This allows users to navigate to the various products, but the experience within the products may remain unchanged. Typically, this connecting stage is combined with a light rebranding effort. This strategy is the best option when the products of both companies may be used within one business process but not within one use case.
- Combining. If the end users utilize the products of both companies within a single use case, combining the design paradigms will enhance their experience. If not, the end-to-end experience will be fragmented and inconsistent. This strategy takes the most effort to formulate and execute. It will require executive buy-in to invest in creating this holistic user experience. It may also require a design strategy dimension regarding the transfer of training for existing users once the single new experience replaces two individual legacy experiences.
UX leaders who understand the big picture and are able to articulate these various strategies from a business and end-to-end-experience perspective have a greater chance of influencing their stakeholders and motivating their teams.
Process. Post-acquisition, an operations team will evaluate the practices and procedures of the companies to ensure auditable financial reporting. There may be a period of nine months when the books are kept separate for legal and compliance reasons. After this timeframe, companies will work to streamline the processes. UX teams are often asked to work across organizational boundaries long before the financial processes are in place to manage the shared workload.
Similarly, UX teams use various processes and tools for content creation, collaboration, and information sharing. M&A offers an opportunity to teams to review their practices and streamline them to increase effectiveness and efficiency. Examples in this area include merged design-pattern libraries and shared wiki space to chronicle ongoing design or user research projects.
UX leaders may proactively build bridges and work out paths for the combined UX groups through these activities:
- Evaluate processes and tools. Create an inventory of the tools used by the UX teams in both companies for design, prototyping, research, multimedia content generation, and infrastructure for information sharing. Take stock of how satisfied or dissatisfied the teams are with these tools and processes.
- Establish new processes and tools. If the teams use different tools and processes, they will get in the way of information sharing. Merging them may streamline the communication between teams. Moreover, it could save money on acquiring or maintaining licenses for infrastructure and tools.
New processes may take the form of town-hall or off-site meetings to facilitate building informal networks between the teams. They may also consist of virtual communication channels, such as email or instant-messaging systems.
If the UX teams are centralized, the acquired and acquiring UX teams may be merged under common management. If the teams are decentralized or federated, it becomes even more important to build these networks so the UX practitioners may collaborate and form connections, irrespective of organizational boundaries.
Consider the people dimension when streamlining processes. The UX leader must be aware of potential resistance or negative reactions. Streamlining processes takes a lower priority than the other aspects of managing an acquisition. However, if executed well, it can have a positive effect in reducing the communication gap and building a sense of community between the acquiring and acquired UX teams, regardless of the final organizational structures.
While mergers and acquisitions are popular business-expansion strategies of technology companies, they present some unique challenges to design team managers, who have the responsibility of leading their teams through the transition while also creating the UX strategy of the combined business entity. The authors have personally experienced this several times during their careers. Here, we offer a framework that will enable UX leaders to take a proactive role in anticipating and navigating the organizational hurdles and creating a shared product vision based on a sound understanding of the business goals.
Janaki Kumar is the head of strategic design services, America in SAP's Design and Co-Innovation Center. She leads a team of designers who work directly with customers to transform their user experience. She has over a decade of experience building, coaching, and leading high-performance teams to deliver design-led innovation.
Philip Haine is vice president of user experience for SuccessFactors. He has designed software for 24 years for dozens of Bay Area companies including Intuit, Gap, Palm, and Apple. His work has earned several awards and patents. He holds a bachelor's of mathematics and psychology from the University of Waterloo.
Michael Brown leads the User Experience Design and Research group at Ariba, Inc. He is responsible for defining and driving the end users' product vision and direction for the organization. He is an industry expert in lean manufacturing, lean startup, design thinking, and user centered design.
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