Success in leveraging external innovation isn't just about finding technologies, products and start-ups for new sources of growth. The hardest part, especially when it's an acquisition of a company (vs. product or technology), is often in successfully integrating the acquired start-up.
I wrote a post last year on Black & Decker's acquisition of Vector Products for $160 million. Black & Decker had licensed its brand to Vector for several years, and the licensing to acquisition path actually looked like a smart move on B&D's part. It had afforded B&D an opportunity to leverage one of its strengths (brand) into a new, but related category (emergency preparedness and inverters/chargers) and doing so with limited risk.
Well it's a small world in the South Florida business market, and we've gotten word that the company has now laid off a significant number of employees (though it said it planned none when it announced the acquisition) as the business has struggled under Black & Decker. Laid off employees talk of an entrepreneurial company that struggled to retain that culture under the process-driven, disciplined approaches of Black & Decker. New products suffered, the speed of innovation slowed and large company 'best practices' turned out not to be the best thing after all.
In the next post, we'll talk about some steps companies can take to ensure they don't kill the very things they're acquiring: innovations and the innovative cultures that create them.
(image from ScottMcCloud.com)