Podcast 134 - New Acquisitions

[00:00:00] The goal of every business is to grow, and the fastest way to do that is by acquiring. Other businesses, and this is great for the company's financial position and for their bottom line, but it always puts safety in a very tricky situation because they never consider the condition of the safety program when they're evaluating this new acquisition, and they just expect us to come in and fix it.

Once they've bought this new company. So let's chat about how to approach new acquisitions. Should be a good topic for today. I. [00:01:00] Hello? Hello, hello, my safety friends. How are you doing on this beautiful October day? I know it has been a couple weeks since I have recorded, but I have been telling you that 2025 has been kicking my butt, right?

Like I have one issue after the other in 2025 and two weeks ago. I found myself in the ER getting admitted and then having emergency abdominal surgery unexpectedly, so I. Was in the hospital for quite a bit and then after that I had recovery and I'm recovering just fine. I got another four weeks or so before I can be fully recovered.

I'm on a [00:02:00] lifting restriction right now and there is still some pain and discomfort, but. It's all gonna be fine. It's all gonna be good. But it was just like, of course this is happening. Of course. 'cause it's 2025 and I even said in one of my last episodes, what else can this year throw at me? And if it does, we will handle it.

So we are handling this. So that's where I've been for the last couple weeks. But what I realized was that. My last two episodes, I talked about my top 10 safety issues. I hope you guys got a lot out of that, but as I was recording those, it came to the front of my mind that a lot of those issues that I experienced were all because they were new acquisitions.

Like even the meat company that I was hired at, it was a brand new acquisition. I was hired by the corporate office. For these companies, but the companies had only been part of that corporate office for a very short period of time. And [00:03:00] then on top of that, every company I've ever worked for has always bought other companies.

And now that I'm a business owner and I rub shoulders and network with other business owners, what I've noticed is that it's just kind of a thing. That businesses do. I work out of a coworking space, which is a shared office space. There's about 30 different businesses in there. And even that coworking space is acquiring other coworking spaces and growing .

So I feel like acquisitions are just something that businesses do. That we as safety people need to be prepared for because as your company grows, they will likely do this. And I believe you'll face this in your career. And knowing how to do this well can be a strength. Because a [00:04:00] lot of people have never really gone through it.

And like I said, every business I've worked for has always bought other businesses, and when I started out, I did not do it correctly. I came in, like I knew everything and I was right. And you, I can't believe you were doing it this way. It was awful. Like a great example is the company I worked for, I don't know, like 20 years ago.

I think it was in 2001 they bought. Another company that was a hundred years old. And when I went in for my first evaluation of this company, like the ammonia, refrigeration pipes were not even insulated and you could just reach up and touch them and they were covered in rust. Like literally these could bust at any moment.

And. This is in a working environment. And at the same time, somebody was there [00:05:00] making a repair on the system with no hot work at all. And I'm sitting there walking and it's my first acquisition and I'm just like, stop. Whatcha doing? I can't believe you're doing it this way.

Right. And then I basically berated them about everything that they were doing wrong. And what I found was that ruined my relationship with that company, with that management team, and it was very, very hard to build that back. Now since then, I have done tens of different acquisitions and you learn from each one and you get better at each one.

And now I know how to approach them in a positive manner so that way. I can reach my end goal, right? That I can get them up to speed in their safety program and meeting whatever that corporate requirement is. A typically a corporation will [00:06:00] have their own safety program that they want to implement within these new acquisitions.

So I have lots of experience . I believe when I left my last job, they were literally acquiring two to three a year, and I spearheaded the onboarding process for all new acquisitions when it came to safety. And then they took my onboarding process and they loved it so much. They actually built an onboarding process similar to it for every department, you know, for quality and finance and sales, because they just loved how structured.

It was and how it got that new acquisition up to speed faster. So not gonna get too much into my onboarding process, but today I thought that I would walk you through some tips on how you can handle new acquisitions in a way that keeps this new business entity seeing you as a valuable. Support [00:07:00] team or a valuable resource to their experience of the acquisition.

So let's get into it. This is gonna be a fun one. I got lots of tips for you.

So let's talk about new acquisitions now. Before we get started, I want you to understand if you've never been through a new acquisition, there's a. Typically a way that it goes the normal structure is that part of the deal in buying another business is that the current business owners.

Stay on for a while. It's not like buying a house, right? Like when you buy a house the old owners just leave immediately. That is not how it goes. When you buy a business, typically the management team and the owners will stay on through a transition period. It, and sometimes there is a buyout period, so they get part of their money for selling the [00:08:00] business upfront, but they don't get the rest of it until they have met certain goals or milestones during the transition period.

So sometimes what ends up happening is that these milestones are sales related and profit related. So that way when you come in and you start telling them, well, we have to get safety up to speed. They see you as an expense and that's gonna hurt them from hitting their milestones. And typically, this transition period can be for a couple of years and.

You can't get much done until that old owner is gone. And once the transition period's over and that old owner has. Transitioned out, you will see a huge change in how things are run and the support that you'll get. So those first [00:09:00] couple years or whatever this transition period is, it's tough. It's very tough, and you have to be very strategic about what you're asking them to do, and you always have to keep in mind that their goal is profit.

And that their goal is to reach whatever milestones are set up in the buyout contract, which you never get privy to. So it's, you have to sometimes just have really positive relationships and good conversations to figure out what their goals are. Now, recently I was working with a corporation and their process was that the old owners actually stayed on.

And that they now just reported to this corporate office. So you might see that as well. That makes it even trickier because what you have to realize with business owners is like, they've built this business and it's like their baby, right? And then you're coming in and making changes that they [00:10:00] don't agree with.

So it's harder when the owner stays on, but it's not. Impossible. That's what I want you to think. And the problem with new acquisitions, when you start doing a lot of them, what you'll find is that there's no due diligence when it comes to safety. So before a company buys another company, they're doing all of this financial due diligence.

They're really like. Looking at the books and looking at the expenses and looking at all the things to make a determination as to whether or not it's a viable company and if they can make it profitable. But they never, ever look at the safety program other than maybe insurance costs. And. You because they haven't done any of this due diligence.

You are walking into this blind. And a lot of times what I was stuck with is that I was not told about the new acquisition until, like the week it happened or right [00:11:00] after they acquired it. So I couldn't even prepare. And now all of a sudden I'm in charge of their safety. I definitely like it better when they tell me that they're considering buying a company and I can start preparing and working my schedule and knowing, you know what I have moving forward.

But a lot of times you don't know. All of a sudden there's a meeting and it's oh, by the way, we bought this company. In fact. A lot of times I found out about them from press releases because it never got trickled down into the regional level that I was gonna be in charge of a new location. And the other problem with new acquisitions that you have to realize is that many of these small, privately owned companies that are getting acquired, they've stayed out of the radar.

They were so small that they. Didn't have to worry about regulatory bodies coming in. And they had small staff. They have small companies, and on top of that, they don't necessarily understand [00:12:00] what they should have been doing. And they didn't understand that they needed to have an OSHA log, or they didn't understand that they needed to have safety policies and they didn't understand that they needed to have safety training.

So those are some of the problems that you're walking into and that you're gonna face when it comes to new acquisitions. So the most important thing when you start a new acquisition and you're showing up for the first time is that you wanna make sure that you set the proper tone that you start off

working at building a positive relationship with the old owners and the management team, and that you admire what they have achieved and what they have built. So we all know the stories of companies like Amazon and Apple and Microsoft, right? Like there, those companies started off in a garage or a living [00:13:00] room, and likely this business that was just acquired was started the same exact way.

So that's what I want you to think is that. This person that has built up this huge business started from nothing and they built it up.

So you really need to admire that because it takes courage, it takes knowledge, it takes experience, it takes a lot of failures. And now they have reached this pinnacle where other companies are interested. And buying them. And one has, and they probably have gotten a big pale, like that's for a lot of small businesses is what they're working towards.

They build it up just to sell it. So admire what they've achieved. Right? So you wanna start off setting this positive relationship, admiring what they achieved, making sure that they understand that you are their partner and that you're not there just to find things that they've done wrong.[00:14:00]

Because honestly, anything you find, it does not mean that they're doing anything wrong. It's just a difference between a small business that was able to stay under the radar and now being part of a bigger organization, and they will understand that the pockets are deeper, but you just have to get them to understand that you have now transitioned to this.

A bigger business and we need to transition how you do safety because things need to be done differently now because those pockets are deeper. So it's not that you were doing it wrong, it's not that you were incorrect. It's not that you were bad. Even though rusted ammonia pipes are extremely bad, but you have to be like, no, it's good.

I understand why you made the decisions you made. I understand why you did what you did. You were building your business and now you've achieved this acquisition and this payout, but now we just have to do things [00:15:00] differently to shore up your business so that it is profitable for this new organization that has acquired it.

So that is setting the tone. And that is what I learned over time, because I did do it wrong that first time I set the tone that they were bad, and they're not bad. It's just that's how their business grew. All right. Next thing you wanna do is set expectations, because their expectations as they were building their business are gonna be totally different to what the expectations are now.

And what you have to realize is it's not just you coming in like this when there's a new acquisition, they're getting representatives from every department from safety, quality, hr, finance, maintenance, everything. All of them are setting in their representations, all of them are setting expectations.

, These old owners that just sold their business are getting overwhelmed with how things [00:16:00] need to change during this transition period. And the way they're seeing it is like, this was their baby that they built and now this company's coming in and it's basically changing everything, right?

I don't want you to be the bad guy in this. Let another department be the bad guy, and you just be like, look, here are my expectations when it comes to safety, is that safety is a way we do business because when you do safety right, it actually adds value to the business and makes you more profitable.

And I wanna help you reach any milestones or goals that were set for you during this. Buyout period or this transition period. Safety is a profit center. People typically don't see it that way. They see it as an expense. So you want to set that expectation from the beginning that when you do safety right, it's adding value to the business.

It's making more profitable, it's allowing you to make more sales, [00:17:00] and it's allowing you to keep your expenses down. And I am here as a partner to help you do this. And you also wanna set the expectation that you are gonna do a full comprehensive hazard assessment to get a list and a view of where they currently stand.

Like a baseline, right? So you're gonna get that, but you really need to emphasize that there is no expectation for them to fix everything right away. And you want to constantly emphasize what I already said, that they weren't doing anything wrong. It's just now that you're transitioning, we need to do things differently.

And this allows you to not put the blame on them and to put the blame on the new company that just acquired them. It's not you. It's now that you're part of this new company, we need to do things differently. You were doing everything right when you were the owner, [00:18:00] but now that you're not the owner, we have to do things differently and that your job is to find what's wrong and that if you didn't find this big list of things that were wrong, you wouldn't be doing your job.

And that it is your job to support them through the transition process when it comes as it comes to safety. And I'll tell you, when I do this comprehensive hazard assessment on new acquisitions, I typically find 150 to 300 items that need to be fixed. We're talking down to every small detail into really big things, and I really hate to share this list with them, but at the same time, it does need to be shared with them.

But the whole idea is I need to get a baseline. I need to know what we're working with, but I truly. Tell the entire management team, there's no expectation to fix this right away. This is what we're gonna work on over the next couple of years. And I do know that some of those things will not get fixed until the owner is gone, because [00:19:00] that's just the way it'll be.

So next we take that list and then we prioritize. It, and that is the list that we wanna give them is the prioritized list. And the way I prioritize things is the very first things I need to get fixed or worked on is anything that's gonna shut that company down or kill somebody. So if it is like someone's gonna die, if we don't fix this, or an accident is gonna happen, that is so bad that it will bring in a regulatory body who will shut down the operation.

So anything like that is first and foremost, like literally we are fixing those within a couple of weeks. This is priority one. This has to get done. Some examples of this might be like forklift operation or heavy equipment operation. It might be if there's like no machine guarding type of thing.

So think about things that are gonna kill somebody. No fall protection stuff that somebody could die. [00:20:00] Number two is anything the employees are complaining about. So if you are doing a comprehensive, hazardous assessment, which I do have. A whole workshop on this. Just go to the safety geek.com/ha workshop.

I'll put a link in the show notes. It's our Hazard assessment Workshop. It is a comprehensive hazard assessment, which includes interviews with employees and management team. So during that assessment, you're gonna hear some complaints from employees and employee complaints always need to take priority, not over the shutdown or kill somebody, but priority over everything else.

Because if you don't fix employee complaints, they now know there is like a new company in town. That they can put blame on, that's got deeper pockets, and they will start calling those regulatory bodies and filing complaints, or they will start claiming injuries that might be fraudulent injuries, just to get in those deeper pockets and say, well, we [00:21:00] told them about it and they didn't fix it.

So then the claim balloons, because then it's negligence as well. So employee complaints, you never ignore them. Because ignoring employee complaints can lead to bigger issues. Number three, anything that's on the OSHA emphasis program.

So every year OSHA releases a list of things that they are paying attention to and anything that's on that list, if you have it within your facility, you need to make sure that it's up to speed because that's one of the reasons why OSHA may come knocking is because your industry falls on this emphasis list.

So you wanna make sure that is taken care of. So we're doing anything that shuts the business down or kills people, employee complaints, and now OSHA emphasis program. Next. Any past incidents. So you should be able to get a three year or five year claims run from before the company was acquired.

If not, you likely have access [00:22:00] to the accident and incident reports at that facility. So you need to look at what those past incidents are. Do some tracking and trending to find out what behaviors were causing, the worst incidents, and make sure that those policies, procedures are tightened up. You have JHAs for them.

You have everything in place for them because if it happened in the past, it's likely to happen again. So we wanna make sure that we take care of that. And then next we're gonna take our list. And we're gonna do a risk matrix on it, meaning that anything left after anything that would've shut anybody down, any employee complaints, any OSHA emphasis programs, any trending from past incidents.

Now we're gonna go, what is the likelihood that this is gonna cause an incident? And what is the severity if that incident was gonna happen? And how many employees would be infected, [00:23:00] and that allows you to just use data to tell you what to work on next. 'cause that will bubble up to the top. So now you will have this.

Prioritize lists. So you started with, you know, 300 items on your list. You have the two or three that would likely shut the company down. You have the handful of employee complaints. You have the handful of OSHA emphasis. You have the past trending, that's next. So then you just prioritize it from there.

And then you share this with that management team. So whenever I go into a new acquisition, I always plan to interview the entire management team one-on-one. So I set meetings with every member of management and I sit down with them for 10 or 15 minutes and I just talk to them. This is part of the hazard assessment anyway, and then I set a meeting for the entire management team to come together when I'm done, and then I review my findings and my plan.

At that point, [00:24:00] they've already gotten to know me 'cause we've had these one-on-one conversations. I've set my expectation, I've set the tone, and then when it comes to the meeting, what I do is I share this prioritized list. But I emphasize over and over again that this does not need to be done right away.

That we are gonna work on this over the next two to three years, and that this is the order that we're going to work on things. And I will tell you, this has never been successful for me because when I hand over this list, they start working on it. In a haphazard way. They do work on the things in the order that I gave them that like they will work on the high hazard stuff that I tell them is priority, but then I'll see them lower down on the list, like completing all the little things that I might've found or the easy things.

It's like they want to show. The company like, look at all this work I've done. I've [00:25:00] already knocked all this out to maybe help them hit a milestone or something. And unfortunately when they do it this way, they do it quickly, but they're not doing it effectively, like it's not sticking. So no matter what, even if they're doing that, I would just praise them.

Thank you. I'm glad you did that, but definitely always prioritize what I have prioritized first. And then you just work with 'em from there. It's just something I've seen. So many times I don't wanna not share the list with them though how to stop them from doing that is to not share the list and just give them what we're currently working on.

But then what ends up happening when you do it that way is they think they have the whole transition period to do this one little piece. It's like, no, you have the transition period to do the 300 pieces, but we're working on this one now. Hopefully you understand what I'm saying here. I feel like I'm going off on a tangent, but that is just something I've noticed.

So just be prepared for it. And even [00:26:00] though they have knocked it off the list, it is still your job to make sure that it's knocked off the list effectively, like it is solidly in place before you take it off your list. Now you've gotten through your first meeting with the acquisition. Like you're going into the acquisition you're doing your comprehensive hazardous assessment, you're meeting with the management team, you're having this final meeting to share the thoughts.

And then the next thing is just, you just work the list and you work the list in the order that you prioritized it. You have regular review meetings. You might do regular site visits. I like to start with very frequent site visits until we get through the OSHA emphasis program stuff, and then

I will go less maybe quarterly, maybe every six months. And then you do regular review meetings. And then when you are onsite, you're always verifying things are completed. So you never just take their word that it's completed. You wanna see that it is completed, that how are they doing things now, and is it different than [00:27:00] your first hazard assessment?

And then you can. Always reorder the list. So that's the key here is that, yeah, you created the first prioritized list, but now that they've got a feel of how this is supposed to go, you should regularly allow them to reorder the list given your. Specificities, right? Like we have to do the shutdown stuff first.

We have to do employee complaints, we have to do OSHA emphasis program. Once they get past that, then it could just be like, you can give them autonomy as to what goes next, and you can guide them into what you think should go next based on past incidents and risk matrix. But if you allow them to feel like they're in control of this, that they just have this goal of finishing the list

and they can do it in whatever order they want. You create a better partnership and it makes it easier for them to support safety. And after about, you know, six months or so, [00:28:00] by this time, you should have them in your reporting structure. You should start. Analyzing their data, you should start comparing your safety data to the business data so that way they're starting to see that when they have a strong safety program, they have a stronger business that is more profitable.

So you're shifting those beliefs and you can generally do this after about 90 to 180 days because things have started to calm down. The first few months of an acquisition, it's very hectic for that management team and for that old owner. So after about three to six months, you're kind of more in a routine.

You're giving them monthly reports, maybe you know, you're presenting to them and you're showing them how their safety program is adding to their bottom line. You're shifting the culture to be more safety related. So that's where you wanna get to, but you're still working your list, right? And after two [00:29:00] years, you're gonna do another hazard assessment.

Or whoever the safety person is at that site at that time might do the hazard assessment and the list is just gonna grow because that's our jobs, right? Like nothing is ever perfect. Everything can always be Im improved until you shift them to more of a self audit type mode where instead of it being hazards found, it's, you know, we're identifying where we can make improvements.

And maybe by the two year, three year mark you've got, your hazard reporting in place, your accident investigation in place. You got everything in place that's bringing data in regularly anyway, so the reevaluating of the list always needs to be done. Alright. So that is typically how I would work new acquisitions.

Now, I will tell you when you start doing this a lot, like you're doing three to five of them a year. You wanna create an onboarding process. You [00:30:00] wanna, you want to create systems for yourself that are repeatable, so that way you're not having to recreate the wheel for every single new acquisition. And the way I like to do this is having a 90 to 180 day plan where you are systematically reviewing.

All of the requirements for that new acquisition. So whatever regulatory bodies they fall under, it might be like osha, D-O-T-E-P-A, Homeland Security, FDA, you know, whatever it is they fall under. You want to develop a systematic review. Of all of those requirements over a 90 to 180 day plan. I like to go 180 days because of the fact that I know they're getting bombarded by finance and sales and QA and HR and all those other systems at the same time.

And then your onboarding process should also include training of their team [00:31:00] members, training of their management team. So that way they have the proper training and they understand the expectations, and during this period, you wanna start implementing your systems and processes so that way you're shifting how they did things to be more uniform with your organization and with all the other entities within your organization. And you're gonna be developing that reporting structure how you're reporting on safety metrics and how you're comparing them to the business metrics. Now, this is what I want you to keep in mind with new acquisitions is that. The more you do, the better you will get. So I shared with you how I screwed up my first one, and you may screw up your first one too.

Who knows? Hopefully not with my tips. But you will learn and improve your processes the more that you do them. And I honestly think that knowing how to do a new acquisitions. Is something that you can brag about, you can put it on your resume. It would help improve your [00:32:00] chances in the future and help advance your career.

'cause it is definitely a skill to be able to walk into an organization and properly onboard them for safety in a way that makes the company that just acquired them look good. And honestly, this is how Safety Management Academy was born. Because I had been doing so many acquisitions and having the opportunity to work with so many different management teams that I was able to go through trial and error pretty quickly, and I developed a process that I then just started implementing it every new acquisition, and it was working.

And it's where I learned that you don't wait to work on safety culture. You do safety culture right away. Because a lot of people, what they'll do is they'll wait until their whole safety program's in place and they go like, okay, I need to improve my culture. But no, if you do your culture right away, then in [00:33:00] implementing everything is so much easier.

So anyway, I hope you got a lot out of this week's episode. I look forward to any replies or comments that you guys have, and I will chat with you again in the next one. Bye for now.