How to Be Acquired by a BIG Company and Retain Your Culture

12/08/2015     

It began like any other sweltering hot July day in Las Vegas, but this wasn’t just any old day. There was change a-comin’. Big news! Yep, on July 22,2009, Amazon.com acquired Zappos.com. (Insert loud, scary “duh, duh, duh!!!” music here.) OR as our CEO Tony Hsieh referred to the dealio in an email to the company: “Zappos and Amazon sitting in a tree…” 

That’s how the story of Amazon acquiring Zappos started, and from the moment of the public announcement right up until today, there has been rampant speculation about what the acquisition would mean for the company culture and WOW service that Zappos is known for. Would Amazon simply take over Zappos? Would Zappos’ focus on delivering WOW service go away? 

What about the Zappos culture?! Would Amazon change Zappos?

Well folks, it’s been over 6 years and I am pleased to report the Zappos culture and focus on service are alive and well! How did we do it? By making sure the conversation about maintaining our identity and culture was at the forefront at the acquisition table. As Tony shared with employees on the day we got hitched to Amazon:

We plan to continue to run Zappos the way we have always run Zappos -- continuing to do what we believe is best for our brand, our culture, and our business. From a practical point of view, it will be as if we are switching out our current shareholders and board of directors for a new one, even though the technical legal structure may be different.

We are excited about doing this for 3 main reasons:

1)  We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture, and we believe that Amazon is the best partner to help us get there faster.

2)  Amazon supports us in continuing to grow our vision as an independent entity, under the Zappos brand and with our unique culture.

3)  We want to align ourselves with a shareholder and partner that thinks really long term (like we do at Zappos), as well as do what’s in the best interest of our existing shareholders and investors.

Source: https://www.zappos.com/about/zappos-and-amazon

Remaining independent and maintaining our brand and culture was a top priority during negotiations. Beyond that, we also worked together jointly with Amazon to establish tenets by which we would manage our relationship. Here’s the full document:

Since announcing the transaction, Amazon and Zappos have worked on establishing the tenets by which we will manage our relationship. These five tenets will guide how we will work together:

1.             Zappos will operate independently, overseen by a management committee that will function similar to the prior Zappos board of directors. The committee will initially be made up of 3 people from Amazon and 3 people from Zappos.

2.            Zappos' unique culture has been core to its success to date, and we look to protect it.

3.            There will be differences between the customer experiences on Amazon and Zappos, and we will maintain separation so customers understand these differences.

4.            Amazon wants to learn from Zappos and vice versa. We will share information back and forth to facilitate learning.

5.            The only integration 'must-haves' are processes legally necessary (for example, there are disclosure restrictions due to Amazon being a public company). These will be clearly defined and communicated.

We believe that these tenets embody the spirit of allowing Zappos to continue to build its business, brand, and culture and allowing Amazon to derive the maximum value from the transaction. In addition, just like Zappos core values, we will refer to these tenets as first principles for making decisions on how we will work together, what we will integrate, and what we wish to remain separate.

So how do you get acquired by a big company and maintain your culture? Make sure it’s part of the conversation from the beginning! Be open, honest, and up front about the importance of your company culture and set it as a deal breaker in the negotiations. And once the relationship is finalized, keep the lines of communication open and have clear expectations around how you and your parent company will work together.

After all, doesn’t everyone want their story to end with and they lived happily ever after?

Author: Christa Foley

Tags: Culture

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