I lived through an acquisition in the teens that I feel was an illustrative story. An old financial services provider embarked on a massive, whole organization modernization effort. The new CEO went all in and actually made the necessary investment in staff and headcount, which was remarkable in itself.

A big part of the effort involved providing customers with big data solutions and all the implied benefits that would entail. They jumped aboard the hype train with gusto. Each quarter progress was reported and margins improved with a clear upward trend. From the trenches it was clear that even with the investment made, it was still not enough to reach any of the goals.

After a year of “modernization” the company was acquired, the buyer literally salivating over the coming profit margin increase and “synergies” in selling into related markets. After another year post acquisition it became clear that the benefits were simply out of reach, and the profits did not arrive. The acquiring company was left with the low margin business it had always been. Layoffs ensued as the buyer sought to salvage something from the transaction.

Turned out the entire modernization and big data effort had been an elaborate bait and switch committed by the board and CEO of the acquired company, masterfully executed.