Technology Leadership Through Mergers & Acquisitions with Paul Robinson
Paul Robinson is the founder of Ensunet Technology Group, a San Diego based company specializing in M&A post-merger integration and IT enterprise architecture solutions, a company which is featured on Inc Magazine’s 2018 and 2019 list of the 5,000 fastest-growing private companies in America.
To-date, Ensunet has supported more than $11 billion in pre- and post-merger IT planning, due diligence, and integration, including staffing projects throughout the United States, Central America, and the Asia-Pacific region.
Paul likes to “pay it forward” on the streets of his hometown: San Diego. There, he mentors at-risk youth; he’s also certified as an elder-care volunteer. Always rising to new heights, he also makes time to go off-roading at dizzying elevations in the High Sierras, as the organizer of a group that’s now nearly 500 members strong.
Inside This Episode
- When to Start Planning M&A
- The Evolution of Corporate Growth
- The Danger of Focusing Exclusively on the Numbers
- The Key Factors for Technological Integration
- Giving the IT Department a Seat at the Table
- The Need for Developing a Cybersecurity Plan
- The Biggest Risk When Growing Through Acquisition
- Developing Your Employer Value Proposition
- Why You Need to Train Like a World-Class Athlete
- Finding Your Strategic Parking Space
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You're listening to key conversations for leaders. This is episode number 46. Welcome everybody. In today's episode, we'll be talking about technology leadership through mergers and acquisitions. with Paul Robinson, we'll be discussing the evolution of corporate growth, the danger of focusing exclusively on the numbers, and why you need to train like a world class, athlete and much, much more.
John Ryan 0:26
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John Ryan 0:48
Hey, everybody, and welcome to key conversations for leaders. I'm your host, John Ryan, and today we have a very special guest, Paul Robinson. Paul is the founder of internet Technology Group, a San Diego based company specializing in m&a, post merger integration, and it Enterprise Architecture solutions, a company which is featured on Inc magazine's 2008 and 2019 List of the 5000 fastest growing private companies in America to date, enter that has afforded more than $11 billion in pre and post merger, it planning due diligence and integration, including staffing projects throughout the United States, and the world. And today, we're fortunate to have him here on the show. Welcome to the show. Paul, great to have you here.
Paul Robinson 1:29
It's a pleasure to be here.
John Ryan 1:31
thank you very welcome. Thanks. You know, no full disclosure to everybody listening and watching Paul and I have worked together in different capacities for the last five years now. But I wanted to see if you could just kind of run back a little bit. I know from from us talking previously, that there was a bit of a leap of faith in your career that really set you down this path. Can you talk a little bit about that? That origin story? Absolutely.
Paul Robinson 1:57
I appreciate the question my entire career started with and has continued to, to, you know, encompass leaps of faith, I actually started 20 years ago now. Uh, gosh, the time gone by so quickly, I started here in San Diego, doing what's called Help Desk work, and you know, progressively in our industry, you work your way up. And you know, try to get, you know, more levels of responsibility, bigger titles. And when I originally got started, I had two choices. I could go the short term contract route and aggressively go after more responsibility and build the resume or I could go the the safe, secure, stable route with more established companies. And I was hungry at that time, which is very, very important in terms of career development. And so I chose to take the leap of faith, and I did, you know, short term contracts, they had a lot of responsibility, but there wasn't certainty necessarily, with the organizations, but it got me into technology, I was immersed in all different types of things, big, complex type projects. And you know, that was sort of the, you know, my start, I didn't know a whole lot about it, but I just I wanted to jump straight in and learn as much as I can and and continue to grow. So it's, it's been a progressive set of leaps of faith, and each year, they've gotten bigger and bigger and bigger.
John Ryan 3:19
Fantastic. How did you decide to get involved with m&a as a specific, you know, industry?
Paul Robinson 3:27
That's a high quality question. I think the decision was made for me. This takes us back about four or five years. And at the time, we were poor, small business about five or six people and we were working a contract with a client and 12 months into that contract in that program being into inflight. That client was acquired by a much larger enterprise. And so we had the opportunity to help integrate that, that that company was that was just acquired. And so it was actually by by accident, that we were pushed into the m&a. You know, I wish I could tell you, I sat home and drove out and sketched out this amazing entrepreneurial plan on a napkin in a kitchen, right. But it didn't quite work out that way. It was an opportunity that we were that I was presented with, by accident. And it ended up being a very, very interesting, fun, and from a business perspective, profitable niche.
John Ryan 4:25
And that's kind of how life is quite often we have a plan and then things come a different way. It's not like life is designed out like the Marvel Universe series where phase 123 and four, you take opportunity and you go with it when that happens. So So five or six years ago is that's when you began the m&a work and was internet already in existence or is that a more recent development from an organizational perspective?
Paul Robinson 4:48
Much more recent development, we have a will be this year in 2021, a 13 year operating history and so for the first half of the company's existence, we did what was Traditional, IT consulting it architecture. And very simply that means a company has deferred maintenance older antiquated systems and they want to upgrade and they need a an advisor, a consultant to come in and help plan and strategize and implement that work. And so that was the type and the complexion of the work that we were involved in prior to prior to m&a. And so yes, the m&a story for us is a recent development recent being five, five years and running now.
John Ryan 5:32
And as a company, you know, how do you describe the the services that you offer as Ensign it?
Paul Robinson 5:39
Great question. We very simply describe our services. And what we offer is helping corporate and private equity, portfolios realize investment synergies, right, so Company A acquires Company B, and they're trying to, you know, very simply make one plus one equal 10. It is the underpinning is the foundation for, you know, the modern organization. And so what we do is we come in and strategize, you know, the integration plans, a lot of different elements to help empower the business and you know, help them reach that objective that they're trying to get to for m&a.
John Ryan 6:17
So with the companies that are going to go through a merger, when does that planning process for what happens after the actual merger? When does that really need to begin?
Paul Robinson 6:27
The planning process, ideally, for a merger should begin many, many, many months, to even looking at targets to acquire, you need to understand your internal capabilities. It's almost like a self assessment. And this is one of the things we recommend. Yep. Who on the who, on the team has gone through, you know, an integration event? What were the lessons learned, you know, how can we bring those lessons learned and apply them to what we're trying to do here, and quite often, nine out of 10 acquires they start thinking about these things after the transaction has happened. You know, frankly, I get the call all the time, you know, after the the toothpaste has been squeezed out of the tube, and we're in this reactionary mode, trying to put together some type of integration plan. So ideally, it's happening many, many months before. And you're going through a self assessment, a readiness assessment, a capabilities assessment, to understand how ready you are how prepared you are, because it's a very, very fast paced event. And if you're trying to realize synergies, one plus will trying to make one plus one equal 10. At the speed of business today. And if you're, if you're not planning that out months in advance, it's going to be what's called the value drain, you're going to lose a lot of money.
John Ryan 7:42
Have the mergers in what you've seen in Melbourne, from your own experience, but in talking to other professionals in the industry? Have they changed significantly in last five to 10 years? Or is as mergers always been pretty consistent across the board?
Paul Robinson 7:56
Great question. The core fundamentals of m&a transactions are still the same. You know, if we look back 510 1520 years, all of the focus was primarily on the financial underwriting, we buy this and it's going to take us to this next level. In today's environment, 2021, you have a lot of new factors, technology is here. And it's ever changing, you have a new generation of workforce that is demanding different things, right. And so if you're an acquirer, and you're only myopically focused on just the financials, you're missing two thirds of the picture, you have to be thinking about how, how is this acquisition going to, you know, position us as a good corporate citizen out in the out in the social media space? How are we going to be looked at as an organization, and this is important, because you're caught, you're on this serial path of acquisitions. And if the court the companies that you're acquiring are, you know, looked at and desired is really good places to work that are making good social impact, right, that's going to have a direct impact on the talent that you're able to bring in? And so short answer to the question is financial, all of that still is there, but you'd have to be looking at some of these other elements as well.
John Ryan 9:19
So you have to, of course, the financials are part of that. But you have to look ecologically of technology, the people, the environment, the positioning in the marketplace, and all these other factors. If I can ask on the technology side, you know, imagine quite often two companies coming together that have not had a coordinated, you know, it plan. Can they always come together? Is it always possible to integrate technologies and get the systems working together properly? Or is there a limit of or is that a cost benefit thing to
Paul Robinson 9:49
it? Absolutely. You can always integrate systems together. The real question becomes is, how long is it going to take you to do that? How expensive will it be to To maintain both environments, right, you're going to have to have staff that has expertise in depth with both systems, right? How long is it going to take to integrate those systems? So the short answer is yes. But it doesn't necessarily make financial sense, you know, to maintain disparate systems, you know, for the long, the long haul. And so if you're, again, going back to due diligence planning, and really understanding the rationale behind the the acquisition, you know, what are we trying to achieve? If you have a very clear in state, or future state in mind, you can make better decisions. But yeah, it's possible to integrate multiple, multiple systems, it's just going to be very, very costly and not very beneficial down the road.
John Ryan 10:45
Those it integration decisions are those also things that have to happen before the merger actually occurs? Or is this something you just want to wait till afterwards and then get started?
Paul Robinson 10:55
Oh, we always wait to the very end. Ideally, it the senior leadership in the organization, the acquirer, the company, that's going to be doing the acquisition, the acquiring, if the senior it leadership has a very tight and tight relationship with the leadership of the company, that is, there's trust with the IT group and the leadership of the business, then they can have a strategic seat at the table, and understand what the rationale for the inorganic m&a, you know, growth plans are, and then how it as a partner to the business can really empower that. And so if there's trust inside the organization, and and with the IT departments, they can really understand what what's happening, and then, you know, position leadership to be ahead of the curve, if they actually do I start executing on acquiring companies.
John Ryan 11:52
No, no, another offering that you do in addition to the the PMI, is, of course, cybersecurity and IT staffing but on the cybersecurity, you know, what are some of the things that that companies organizations really should be thinking about, in relation to keeping up to all the demands of the ever changing nature of cybersecurity, I'm sure.
Paul Robinson 12:11
One of the biggest holes inside of any any organization is the lack of information being distributed to the, to the workforce, right. So very simple things about not opening attachments that you don't recognize from people, you don't recognize just small things like that. And so if the if you as the parent organization, or even the target organization you're looking at, doesn't have what's called an enterprise risk management plan, cybersecurity plan. That is educating the workforce is telling them about what's what the latest threats are, what are the latest, you know, subversive tactics to try to get information really, really, really, really simple things.
Paul Robinson 12:54
We always think about this elaborate cybersecurity hack, bringing down an organization quite often, it's it's just something, you know, very, very innocuous, you know, someone a line worker, just opening something or doing something that they shouldn't have done, and have they been educated properly and trained through regular communications from the IT group to the organization, you can avoid probably 50 60% of the events. And so if you're an acquire, and we're doing a readiness assessment, we have our due diligence checklist and playbooks. And we're beginning the due diligence process. That was one of the targets, we want to understand how far along the the journey and how mature that targets cybersecurity plan is, you know, what, what types of things that they've been doing? The it groups, the IT group in question, or whoever is responsible for it to educate, you know, the workforce. So they're, they're all singing from the same sheet with respect to the threats that are out there.
John Ryan 13:52
So so if I hear that correctly, that the cybersecurity risks are of course technological, and also people and it sounds like the majority of the risks are people focus versus like coding and software and things like that.
Paul Robinson 14:07
This is not to say, yes, this is not to say that if you are not doing routine maintenance on the IT systems and infrastructure, and just leaving gaping holes that the bad actors out there, whether they be nation states, or just people looking to monetize are not going to find them, I'm not suggesting that necessarily get overwhelming, it's just average average people, average, average people in the workforce making just inadvertent mistakes, because no one told them not to do this.
Paul Robinson 14:37
And once you let them in the bad actors in, they can spread through the organization and can can put different parts of technology in the organization who have sat there for years, you may be acquiring a company who was you know, infiltrated two or three years ago and that intellectual property, the data, the source source code, or the secret sauce, may actually We'd be sitting out somewhere that you don't even know about, right. And so this is why we always educate just around, you know, just putting the information out there to the workforce and educating them regularly. So it's so it's not a shock when, when they when they see something, and you know, open it, and they get surprised, right? It's just really, really simple things like that doesn't have to be a complex discussion.
John Ryan 15:25
I worked with a large corporation, a little over 20 years ago, and I was in an area where the guy had opened up the love you virus attachment, if you remember, that went out without to 65,000 people around the world. That was it was an insane situation. So the simplest thing is, yeah, he had to get legal involved, and all that kind of stuff. So I imagine those things still exist, but they're also getting more and more like, like tricky and more advanced on the human side. So you got to really handle both. Make sure the software, the coding and, and the systems are all set up. But also make sure you're educating the people and keeping it Top of Mind as being diligent in the process, too.
Paul Robinson 16:07
Yes, the one of the other things, too, is part of our due diligence, will ask the teams has there been a breach that they know about? Right? And, you know, how forthcoming are they being about that, right, because that that speaks to speaks to a lot of things, you know, the in terms of the cybersecurity plan and how they're addressing that. So I mean, there's those are just a few things have probably three or 400, that we're looking at, in that in that specific area around enterprise risk.
John Ryan 16:36
You know, with all the different endeavors that you've done in terms of post merger integration, IT staffing and cybersecurity and building the company up to where it is today, what have been some of the biggest challenges that you faced, as the leader of internet,
Paul Robinson 16:50
Some of the biggest challenges out there really surround competition, and it comes in a form that most people don't really, you know, think about in the context of m&a. One of the biggest competitors is this idea that we internally, we can take on all the work ourselves. And you may be already working 60-70 hours a week, and all of a sudden, now, the organization says we're going to start acquiring and, you know, the idea is do more with less, right.
Paul Robinson 17:20
And so one of the largest challenges that I've had to face as a leader is just this, this putting out the information that we're a strategic partner to you, you know, we're not trying to replace, we're not trying to come in and change a lot of things, but to just to position us as a strategic ally, you know, along the journey, and that's as a leader, trying to get the information out there to enable organizations has been one of the biggest challenges as a leader. The other big thing is that there's no secret is, you know, we're probably negative unemployment for it qualified 18 players and so we are always continually recruiting for people to you know, help in all different areas of what, what we what we offer in the m&a services world. So as a leader, I'm always, you know, not only communicating with prospective and existing clients, but evangelizing and, and, you know, hunting for, for for talent, because we always need, you know, high qualified people to deliver our services. That's, that's the key piece. I mean, you can, you can market and sell something, but if you're not able to deliver that service, effectively, and you know, to the customer satisfaction, you know, things can go bad. And so, yeah, that's that's probably one of the two big challenges that and talent.
John Ryan 18:38
So then negative unemployment rate for technology. Can you talk more about what that is? It sounds like, like negative inflation in some countries as well.
Paul Robinson 18:46
Yes, what we're talking about here is the idea of, if you have a skilled tech, it practitioner, whether they be a senior consultant, senior cyber or you know, somewhere in between, they're in very, very high demand. And then when you add that additional layer of someone being a very, very good communicator, and having the right pedigree to be customer client facing and they're really good at relationships, that's just this trifecta of goodness. And so you know, people like that. They're just not very readily available. And so when I say negative unemployment for it, it's just, it's really hard to find good people coupled with the idea that we all know that you know, in today's environment where a lot of people are working, you know, virtually it jobs, technology, jobs at all levels are very portable, meaning you don't necessarily need to live in the in the city where you're employed. And so you can get you can get a job anywhere, you can work for any company. And so the real question becomes, you know, why? Why should I work with this organization? And if this is what we're, this is what we're talking about.
John Ryan 19:57
Well, that ties into the employer value proposition and marketing your your company to different prospective employees out there as well. So it's so relevant, what do you see are some of the bigger challenges that leaders are not only facing today, but may face over the next 5-10 years.
Paul Robinson 20:14
It comes back to attracting, you know, the right talent to deliver whatever it is that you're offering in the market product or service, you have a new generation of, of workforce that that's coming in, who cares about different things they care about more than just, you know, more than just salary? They want to live in an environment where, you know, there's ample opportunity for for growth, there's things that they can do socially, there are people who are interested in starting and, and growing families, they want to work for an organization that's making a good social impact. So there's what's happening inside the company, and then what's happening outside, there's a lot of identity wrapped around that. And so, you know, all of us leaders need to be cognizant of that and designing out, you know, our companies such that we can empower that next generation of workforce to, you know, have solid careers, but then also make a good social impact out there. And, and, you know, so it becomes a win win for everyone.
John Ryan 21:15
Another your dad, Arnie Robinson was a legend in the sports world, he took home, the gold in the 1976, Montreal Olympics jumping, I believe, 27 feet four inches and four and three quarter inches on the lawn job is that they have that right.
Paul Robinson 21:32
That is correct.
John Ryan 21:33
Okay, what, what are some of the lessons that that you learned from him along the way, and how they've impacted you?
Paul Robinson 21:41
Oh, I'll share a story with you. When I asked my father, how did you actually win the gold medal, and I think I was around 2930, I got to that age where as a child, I actually began to listen to, you know, sort of the the important lessons that my parents were talking about, and I asked my father, one day, how did you win the gold medal, and he simply said to me, I was an average athlete until I began training with world class athletes. And when I did that, I had to rise to that next level, they push me harder, I had to work harder. And then I became world class. And so the important lesson there for me was to surround myself with people who are you know, performing at that world class level in business, right, because they the expectations are higher, they push you, right? And and you become a better athlete, or business business leader, whatever it is that you're trying to do as a result of that. So I've already said the law of averages, you're the average of the closest five people you spend the most time with. And this is a key lesson that I got from my father, you know, surround yourself with, with high performing people.
John Ryan 22:53
Fantastic. That sounds like a really important and impactful conversation. You know, obviously, key conversations, we feel the conversations are the key. In addition to that, are there any other conversations you can think of either from your dad or someone else that's had a profound impact on you either personally or professionally.
Paul Robinson 23:11
One of the other words of wisdom and pieces of advice I got is from another mentor of mine, his name is David Finkel, he owns Maui mastermind, it's an organization that coaches, business owners on how to implement the right systems and controls to scale their organization. And he, he told the story, in terms of trying to position yourself in the marketplace, and you use the metaphor of a large stadium and in the parking lot. And so if you can imagine driving into the stadium parking lot, and you're seeing all these cars, you know, 1000s and 1000s of cars, and you're driving, trying to find your parking space, right? Quite often what we do in business, a lot of business owners, and where they make the mistake is they will try to drive into the parking space of a car where a car's already sitting there. Alright, you know, the world doesn't need a, you know, another, you know, toothbrush, right? What's, what's the differentiation? What's the specialization that's going to be there. And so what he described is, as you're driving down, you know, the different areas in the parking lot, you need to find an empty spot, right. And so the the lesson that I took away from that is, you know, there's 100,000 IT companies out there, but there are only a few in the world that do it, m&a as a niche, and there's only a smaller group that, you know, can actually perform that very, very well. And that's our parking space.
John Ryan 24:34
I love that. Excellent, great words of wisdom. Thank you so much for sharing. involved. Thank you so much for being here on key conversations, what's the best way for people to get in touch with you and find out more about Internet's offerings.
Paul Robinson 24:46
It's a pleasure to be here. I sincerely appreciate the invite. And if anybody wants to reach me, they can email me directly email@example.com.
John Ryan 25:03
excellent. And I'll post all the social media links in the show notes as well. Again, Paul, thanks so much for being here. It's a pleasure. Thank you. And to all you listening and watching, thanks so much for being here. Until next time, develop yourself, empower others and lead by example. Thanks for listening to key conversations for leaders with your host John Ryan. If you enjoy the show, please let us know. Give us a rating or write a review. And if you'd like to connect with me and other like minded leaders, I invite you to join our Facebook group called Develop, Empower and Lead where I deliver free live training every week. If you go to www.developempowerlead.com It will redirect you right there. Hope to see you there soon.