Do acquisitions kill innovation?
Acquisitions Can Kill Innovation—Unless You Get the Integration Right.
When large companies buy smaller, high-growth businesses, there’s always a risk. Too much integration too fast can crush culture, slow innovation, and dilute the very value that made the deal attractive in the first place. But too little integration? That can lead to inefficiencies and missed opportunities.
So, what’s the answer? Instead of a full-scale takeover from day one, an "Integration Light" model keeps the acquired company’s agility and culture intact while integrating the areas that can provide stability and scalability. So, where does integration make sense?
Supplier Contracts – Access to better rates and stronger vendor relationships.
Sales Pricing – In some industries, aligning pricing models makes sense—though not always!
Hiring & HR – Potential employees get the security of a larger company while still benefiting from the startup mindset.
Finance & Legal – Avoiding legal headaches by ensuring everyone follows the same financial and regulatory processes.
Tech & Systems – Connecting systems to improve efficiency—but beware: forcing Slack users onto Teams (or worse, SharePoint over Google Drive - from personal experience) can be sometimes cause friction.
Customer Relationships – Sharing networks to find new customers and partners can be a no-brainer, but again, can depend on industries.
But even with this approach, there’s one crucial piece that can’t be overlooked: Communication.
The acquiring company needs to set the tone from day one so that everyone understands that the two companies are moving in the same direction, and that they share the same overall goals (even if they're operating somewhat independently to start with). Differences are okay - they can even be great - so it's important for leadership not to gloss over them in their communication approach.
Done right, both companies get the best of both worlds: the agility of a startup with the backing of an enterprise.
