3 Entrepreneurial Lessons Learned From AssetWorks
Volaris acquired AssetWorks Inc., a software company specializing in fleet and facilities management solutions, and successfully allowed it to perform to its potential. AssetWorks needed a parent that was willing to help the business grow, while investing in the skills and talents of its people to make that happen.
The Volaris experience with AssetWorks points to some fundamental lessons of managing for success in this dynamic industry. The lessons may seem basic, but after considering how AssetWorks went from being a good company to a great company, it's hard to deny how important they are.
1. Strategic Fit Matters (A Lot)
When acquiring a company, particularly in the technology sector, companies may get so carried away with the idea of diversifying their business that they forget the fundamentals.
Remember, it's not just an investment - it's a partnership. A company that acquires an organization with another business or product line may be unable to properly lead the acquired company to success.
Consider the AssetWorks case. AssetWorks was initially acquired by a government consulting firm. The two companies could not have been more different. The business lines and priorities didn't align - and the values didn't either. This disconnect affected every level of the organization. Management felt directionless and under-resourced. Staff felt unmotivated. People didn't know what the priorities were, or how performance would be assessed.
Volaris turned this situation around. Volaris understood the software industry, its priorities, and technology. I have said in the past that at Volaris, we speak the language of enterprise software. We understand what a technology company needs to be successful and we provide those resources.
Indeed, Volaris understood that software companies require ongoing investment. The company reinvested its revenues to support this growth process.
2. Invest in People
A company is built on its people. This can't be stressed enough. Sometimes it takes an AssetWorks situation - a capable company performing at a fraction of its capacity - to remind us of this fundamental truth.
Under the previous leadership, AssetWorks' profit-sharing scheme was inequitable. Volaris introduced a bonus pool as an incentive to attract and retain a talented workforce.
Similarly, Volaris recognizes the importance of leveraging existing skill expertise and helping management and staff to become invested in the success of the company. As such, Volaris also pushed decision-making down to the business units. Additionally, Volaris made education and training available to AssetWorks employees.
Overall, employee feedback since the acquisition has been extremely positive.
3. Measure Performance
If it can be tracked, measure it. Under its other parent company, AssetWorks did not have a performance measurement process. Volaris changed this. With a solid understanding of the enterprise software market, Volaris has developed a common set of metrics to measure new improvements in the products.
Within AssetWorks, it is now clear how the business units' performance are measured and what the expectations are. The staff in AssetWorks facilities division feel that Volaris' expectations are clear and transparent and that performance is measured fairly against those expectations.
It's just another reminder that most people don't fail because of incompetence. They fail because they haven't been properly shown what to do.
Final Thoughts
Acquisitions are not just investments - they are partnerships.
To make sure the acquired company performs to its full potential, the acquiring company should treat it the way it would treat one of its original business units. The company must provide leadership for people and processes, make sure employees have the required tools for the job, and measure the outcomes to see what is working and what is not.
It may sound simple, but in the fast moving business environment, these fundamentals often get overlooked.