ACQUI-HIRES AND LIFT-OUTS
The market place for senior executive talent is tight and getting tighter every day. So, it’s only a mater of time before you’re going to have one of those Mondays. You know, the ones that start out great because the traffic on the way to work is cooperating. They got your order right at Starbucks. It’s all good. Then just as you step off the elevator, you see Sally waiting to speak to you outside your office. You think, “she’s in early”. Then Sally hands you her letter of resignation. Bye-bye Monday if Sally was one of your top people or ‘what a great opportunity’, now I don’t have to let go. Either way, it’s an opportunity to do better.
What if you receive multiple resignations from the same team at once, or a resignation provides you with an opportunity to assemble a new team? In that case, you have a couple of options that can turn the situation in to a real opportunity for you and your organization. Here are my top two recommendations to consider if this happens to you some Monday morning:
Acqui-hires were made very popular by technology companies that needed to grow ‘fast’ and technology talent was tight. Essentially an acqui-hire is when a big company buys a smaller company — usually an early-stage start-up — not to take over that business, but rather for the express purpose of acquiring its employees. This strategy was extremely popular in Silicon Valley — Yahoo! was a particularly big proponent — but it has fallen out of favor in recent years due to spotty performance.
Lift-out have been around for a while longer and are not just used by technology firms. Law firms, executive search companies and engineering companies have used the tactic for years. Fans of The Good Wife an American legal and political drama television series by CBS will recognize the tactics immediately.
Lift-outs are exactly what they sound like. In a lift-out, you “lift out” a group or team at another organization in its entirety. This approach can be quite effective. Indeed, research shows that great performers who move with their team become successful in the new company more quickly than those who move alone or are assembled as part of a new group. That’s because the team already works as a unit. They don’t need to get acquainted or iron out group dynamics. In a lift-out that is well planned and well executed, you’ll see a boost to your company’s bottom line almost immediately. A lift-out is not for the faint of heart, however. It’s one of the most aggressive moves you can make. Invariably, you’ll want to contract this out to a professional.
- Map out a legal strategy for how to respond with clients, suppliers, and so on.
- Collect, preserve, and analyze evidence related to the lift-out.
- Develop a factual narrative.
- Differentiate legal issues from business issues.
- Periodically reviewing the contractual obligations that have been placed on employees to prevent LIFT-OUTS
- Diversifying risk by spreading responsibilities to multiple employees
- Establishing a contingency plan to deal with lift-outs
- Identifying and protecting trade secrets and confidential information
- Constantly monitoring employees who access confidential information to reduce the chances of a lift-out and limiting who can access client lists or IP assets
For a more in-depth explanation follow this link to another article on our site, “Aqui-hiring or Lift-out, which strategy is best for fueling your company’s growth?”
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