Maintaining brand during strategic acquisitions
How GBQ Partners maintained its brand identity after three acquisitions in a year
Before its first acquisition, leading tax, accounting and consulting firm GBQ Partners LLC went through a “year of readiness” to prepare.
“It was critical that we beefed up our internal service capacity in finance and marketing, and made sure that we had our operational team, systems and processes in place so we were ready to handle the growth,” says Darci Congrove, managing director of GBQ.
The firm has been ingrained in the Columbus, Ohio, community since 1953, but 2016 brought big changes – not one, not two, but three strategic acquisitions that significantly expanded its breadth and reach.
Congrove shares what she’s learned about smoothly integrating new acquisitions – and maintaining brand attributes that keep GBQ competitive.
Responding to client needsWith hundreds of accounting firms owned by baby boomers preparing to retire, there is a huge opportunity for mergers and acquisitions, Congrove says.
“Many of these owners don’t have succession plans, so there’s a ton of M&A activity,” she says. “Over the last five years, we’ve been approached numerous times by firms that wanted to acquire us, and we made a strategic decision that that’s not what we want to do. It made us realize that, if we’re not a target, we should be an acquirer.”
When seeking out firms to acquire, Congrove says, “We’re mostly focused on finding services we’re not offering and bringing those under our umbrella.” The organization is also looking to identify firms that expand GBQ’s geography and depth.
In January 2016, GBQ acquired a small Cincinnati accounting firm, expanding the footprint of its core accounting, auditing and tax consulting services. One month later, it acquired a staffing firm and began offering temporary accountant staffing and hiring support to help companies fill positions.
“It was a natural fit, because it was a service clients desperately needed,” Congrove says. “We know from our own hiring that accountants are in high demand, and we don’t have enough accountants coming out of college to replace the number that are retiring.”
Then in November 2016, GBQ responded to client concerns by acquiring a cybersecurity firm, adding IT consulting to its growing list of services.
“It’s easy to figure out whether the math will work on a merger. It’s a lot harder to figure out whether the personalities will mesh.” – Darci Congrove, Managing Director, GBQ Partners LLC
Finding a fit
From the first acquisition, GBQ was equipped to add people. Yet finding the right people was key.
“It’s easy to figure out whether the math will work on a merger or acquisition,” Congrove says. “It’s a lot harder to figure out whether the personalities will mesh, because we’re not just looking for size, we’re looking for strategic growth and long-term success.”
When evaluating potential firms, GBQ asked leaders about their belief systems with questions including, “How do you believe clients should be served? How do you believe you should treat your team? What are your beliefs on work/life balance and community service?” The topics gave insight into other firms’ guiding values and culture.
GBQ’s leadership team also looked for firms that embodied its seven brand attributes, which are painted on the wall in every GBQ office. These traits helped them identify like-minded firms that were responsible, personable, savvy, highly motivated, sociable, attentive and passionate.
Integrating each acquired company required an intense hands-on process, Congrove says. GBQ developed detailed operational checklists to guide integration activities across human resources, IT, finance and marketing. The team continues refining and revising these processes with each acquisition.
Ultimately, Congrove says the success of M&As comes from culture and accountability. GBQ’s seven brand attributes help filter out acquisitions that wouldn’t be a good fit, and they help acclimate newly acquired associates to GBQ’s expectations.
To demonstrate the brand attributes in action, seasoned GBQ associates are asked to work alongside new associates at acquired offices, Congrove says.
“Everyone is keenly aware of the behaviors that are expected, because it is part of our performance evaluation process,” she says. “We measure and reward people based on how well they execute those attributes, more than we measure billable hours. If somebody scores well in behavior, the work product just follows.”
As the firm continues to grow, GBQ’s culture provides a framework to help associates make decisions and deliver a consistent approach to serving clients. And although GBQ will continue to pursue strategic acquisitions, Congrove says, “We don’t plan to continue at a pace of three a year.”
Planning for what’s next
As GBQ Partners LLC has grown, so have its financial needs.
“We didn’t have very complicated needs until we started to do acquisitions,” says Managing Director Darci Congrove. “Huntington has been able to grow with us. They’ve been flexible and responsive as our needs change.”
Since its relationship with Huntington began in 2009, GBQ has grown from 104 associates in two offices to 170 associates in six offices. Over that time, the firm also grew an average of 8.7 percent annually, to $30 million in revenue in 2016 from just under $17 million in 2009.
Huntington has helped GBQ plan for its next stage of growth, in addition to providing financing.
“They’ve provided numerous ideas for us to move quickly if we find the next deal, so we’ve preplanned how we’ll get through the process, which allows us to be nimbler,” Congrove says.
For more information, visit www.gbq.com.