Mastering M&A Success with Transparent Leadership and Strategic Agility

The reality of being a CEO in a publicly-traded company

It is fun being a CEO of a publicly-traded company. It’s an amazing responsibility. I enjoy it immensely. You are truly solving problems for customers. In the end, any business only exists if it can solve problems. And it has to solve problems in a way that customers recognize delivers value to them. So, you're solving problems for customers. 

We're a global company. We have 4 million developers who rely on our software every day and hundreds of thousands of businesses. By doing that, by solving those problems, and by making sure the employees are engaged and we have a great culture, you then deliver great shareholder returns. 

In the end, that's what a business is supposed to do—grow the business and ensure the investors get their money's worth.

It’s interesting because I’ve been CEO of three types of companies: VC-backed, private equity-backed, and public. I have a much more balanced view. I think people who say being a public company CEO is difficult don’t realize it’s equally hard on the other side. 

It’s not easy being a private equity-backed CEO either. Everybody's looking for outcomes, whether it’s public or private, they're all looking for a financial outcome through increasing the value of the business.

In a public environment, one of the things I’ve found really positive is that if you're transparent with your shareholders—like you mentioned, with the quarterly calls—you have to be honest. You have to be transparent. You have to share the good and the bad. And if you do that and share how you expect to overcome the challenges, the investors work with you and stay with you. 

We’ve seen that at Progress, and it’s been a good ride. Now, not every day is fun. Not every moment is exciting or positive. Challenges will happen; that’s what business and life are. The question is, how do you overcome them? 

Investors know that. Investors understand that. When they see inaction or communication that isn’t transparent, or when they feel they're not being told the whole truth, that’s when the problems arise.

The same is true with customers and employees. Transparency, in my book, is the number one foundational element to build trust. 

• You’re building trust because investors are putting money into your business—that is trust. 
• You’re building trust with customers because they're relying on your products. 
• And you're building trust with employees so that everyone feels we can win and succeed together. 

I see it all as part of that foundational piece: building trust through transparent communication.

We're not a consumer company, so let me be precise. I’m running an enterprise software company. For our investors, the perception is about the product and the business. On top of that, are you delivering the results? 

Results matter, no matter where you go or what you do. But even in a private company, if your product image changes, your business outcomes change.

So, I don’t see that much of a difference. Maybe it's just the way I'm wired. As I mentioned, I was a corporate officer at Computer Associates for nine years. I did the investor relations tour with the CFO, attending IR conferences and analyst relations. To me, it’s about sharing and being open. If you do that well, the market rewards you.

It has some additional components, but I wouldn’t call it harder. It’s just additional components. That’s my view.

Crafting a clear and actionable M&A strategy

Figuring out the strategy starts with understanding the current state of the business. If you don’t understand where things are and what the current state is, it’s really hard to figure out where you want to go and if you can actually get there. Strategy has to be executable.

If someone says, “I want to fly,” but you're a pig, well, engineers haven’t yet figured out how to make a pig fly. 

So, if the business is a particular type, how can you grow it? 

How can you create more value for shareholders? 

How can you make your employees happier? 

How can you serve your customers better? 

Because in the end, serving your customers better is the foundation. If you do that, everything else follows.

The strategy has to start with understanding your products. Where are they strong? Where are they weak? What markets are you in, and is there an opportunity there or not? You identify your weaknesses, figure out where you're wasting resources, and where doubling down could lead to much better results. That’s how you put together a strategy.

I think the second most important part, in addition to being honest about where you are, is having a team that helps figure out where to go and how to get there.

I was very upfront with the board, as I’ve always been with shareholders, investors, and employees. I told them that I would take the first couple of months to figure out where we could go and what was really going on in the business. 

The five years before I joined, the business had struggled, and the investors weren’t happy, to put it mildly. But that was water under the bridge. The real question was, how do we move forward?

When I came to Progress, we had a slight decline in revenue year over year. The first question was, how do we stem that? This is a basic, foundational issue—if you have a leaky bucket, how do you plug the leak? What can we do with our products to make them stronger, create additional value, retain our customers, and even expand their relationship with us?

We spent the first 18 months to two years focusing on that, and we stopped chasing new things while not keeping an eye on the core business. To me, strategy is common sense, but the hard part is execution.

Conducting diligence and understanding the business in the first 90 days

I spoke to more people—more customers and employees—than one usually does in the first 90 days. I spoke to hundreds of customers. 

We happened to have a conference with some of our larger ISV customers—other software companies that use our products to build theirs—so I spent two days there, walking the floor, meeting every customer, and asking them what they liked and didn’t like.

I also visited our large offices, met with employees, held open town halls, and walked the halls, going into people’s offices. Some were surprised, saying they had never spoken to a CEO one-on-one. But once they realized I was there to learn, they opened up. 

I also met with every product manager to understand what was going on with their products. I’m a product-centric guy, so it starts with understanding what we offer that solves the customer’s problem.

I met with the leadership team and all their direct reports—about 70 people—and did one-on-ones with all of them. That was my homework.

We did some pretty hardcore diligence. You have to. The problem is that people sometimes get parts of the story but not the complete picture. When that happens, they jump to conclusions. Conclusions should come later. 

So, as you build and validate the picture, you ask follow-up questions to ensure accuracy. That was the first 90 days. At the same time, I was evaluating the people. I made significant changes to my leadership team within those 90 days. 

Conversations helped me figure out if they understood the big picture. If their view differed from mine and I believed mine was more accurate, I assessed whether they were connecting with people and customers or missing key insights.

Speaking to customers gave me a deeper understanding of how critical our products were for them and what few changes they wanted to do more business with us. 

I joined in mid-October, and by the first week of January, I was in places like Minnesota, meeting customers at Quicken Loans and large healthcare clients. This was pre-COVID, so we were traveling to meet customers where they were and asking, “What can we do better?”

Establishing leadership and building a foundation before pursuing M&A

As you're doing the groundwork, people begin to see who you are and what’s important to you. They notice if you're genuinely listening and forming a viewpoint based on what you’re hearing versus coming in with preconceived notions. 

No one likes a know-it-all, and nobody wants to be told what to do. It’s crucial to come in with an open mind because each business and circumstance is different.

As I moved forward, I recognized the need to find the right people for my leadership team. I reached out to my network and brought in a couple of people. I also found talent within Progress and was promoted from within to fill other key positions.

I was pulling in people with M&A experience but not at the start. Initially, it was about finding people who were great at their specific roles. 

For example, I needed a new head of sales who understood managing customer relationships, growing the existing customer base, and ensuring their needs were addressed. 

I brought in an engineering leader who could work closely with the sales leader to respond to customer feedback. And on the product side, I also hired a chief marketing officer who knew how to target and engage the right audience.

M&A came later. At first, it was about shoring up the core business. After about two years, once we had a strong foundation—stronger margins, doubled cash flow—then we shifted focus to acquisitions. 

That’s when I decided to use our growing cash flow to buy companies adjacent to our portfolio. It allowed us to expand our customer base, grow cash flow, and create a virtuous cycle. I hired our current head of M&A, Jeremy Siegel, around the time COVID started.

In late 2018 to early 2019, we said, “Okay, it’s been two years, we’ve done the heavy lifting on the core. Let’s now start doing M&A.” The first deal we did was local—this very headquarters used to belong to Ipswich, the company we acquired in May. It was a great business that fit well with Progress.

Progress is about helping IT organizations develop, deploy, and manage amazing applications and digital experiences, now increasingly AI-powered. Back then, we were mainly focused on developing and running those applications, but didn’t have products for deploying, scaling, monitoring, or securing them. Ipswitch brought us observability products and others we needed.

After that acquisition, we realized we needed to do this on a more repeatable basis, so we hired Jeremy in early 2020. I was interviewing him before COVID, and by the time he started, we were in the middle of the pandemic. 

The first deal we did post-COVID was in October 2020, and it was done entirely virtually. As far as I’m aware, we were the first enterprise software company to complete a deal during COVID without meeting anyone in person. That was a completely new experience, flipping all previous norms on their head.

Yes, that was Chef—our first fully virtual deal. It is a great business and it is a great company. And the number of mission critical large businesses that rely on it is astounding.  And, without Chef, Christmas shopping would come to a standstill. How is that?

Every single credit card company uses Chef products to scale their backend infrastructure to handle the transaction load that goes up as Christmas comes around or any holiday comes around. And then they basically use it to scale it down once the rush goes away. It's just a small example of the kinds of things our software is used for. Dev Ops.

How the strategy evolved

The first couple of deals were primarily tuck-ins focused on strengthening the existing core. But from then on, the strategy has remained consistent. You identify a company with a great set of products and a solid customer base.

A great set of products means they perform well in a good market. A great set of customers means they recognize the value of those products and stay with you. Key metrics include renewal rates, customer retention, and average customer lifetime—whether you're seeing churn or not.

Finally, you consider if the financial metrics make sense. And it’s all backed by the people and culture of the company you're acquiring.

Strategic AI integration

The buzz around AI is incredible right now, and it’s leading companies to both talk more about their AI work and do more with it. Our very first acquisition in 2017 was an AI company—a machine learning startup. 

I’ve always believed that the world was moving toward AI, and we’ve seen this shift in different ways. Eighteen months ago, with the rise of generative AI like ChatGPT, it became widely accessible, sparking even more excitement.

Over the last several years, especially the past 18 months, we’ve made significant AI investments. Our recent acquisition, MarkLogic, is a data platform supporting unstructured data, and it has acquired a company called Semaphore, which does semantic text analysis. 

Combining these capabilities with our data connectivity and intelligent decisioning products, we launched the Progress Data Platform. 

This platform is about responsible AI in mission-critical, secure, and reliable environments, minimizing issues like hallucinations and random answers. It provides answers with context, linking back to the source information, which is essential for business reliability.

For instance, if you ask what kind of product to offer a customer, it might suggest a couple of options and explain why, with links to product information and identified customer needs. It offers a logical connection, like humans do. So, we’re not just delivering generative AI answers—we’re creating a responsible, secure, reliable, and hallucination-free AI.

We’ve made numerous AI advancements across our products. In our cybersecurity product, we added AI capabilities to monitor network activity, helping cybersecurity experts identify genuine threats rather than just anomalies. This AI reduces the time needed to pinpoint issues by 52%, effectively doubling productivity.

Our content management product also uses generative AI to create and target audience-specific content automatically. These are just a few examples. AI is a major focus for us, too.

Executing successful M&A deals

Don't just hire the best of Corp Dev and the best of integration. While you do need strong leadership, the success of a deal is much more than that. It comes down to the execution post-acquisition: integrating and delivering outcomes over 6, 12, 18, 24 months, or even longer.

Success requires initial analysis, expectation setting, goal setting, and due diligence to validate assumptions. This is coupled with creating a thorough integration and execution plan before the deal closes. You can’t wait until afterward to plan; there must be a solid roadmap that everyone responsible for execution has signed off on.

For example, while the M&A leader might oversee the deal process, ultimately, it falls under a General Manager (GM) who needs to sign off on revenue and efficiency targets. 

IT has to commit to the integration timeline and systems compatibility. HR must confirm that onboarding, training, and cultural integration are feasible. Each function, from finance to customer success, must know their role and have a plan for how they’ll deliver results in line with the business’s expectations and timing.

It’s about answering every question with a plan. It’s a lot of preparation, but the more you do it, the better you get.

Ensuring fit and managing integration risk at the LOI stage

At LOI, we conduct a high-level analysis. For us, this means assessing whether the acquisition fits across the dimensions we care about. Is there a product-market fit that complements what we do? 

Is their go-to-market approach similar enough to ours that we can integrate it smoothly? 

Is the product quality solid, based on any informal checks or initial data we receive?

Before the LOI, you have limited data, so you rely on online resources like G2 Crowd to see what customers and users are saying about the product. We evaluate if it’s a market we want to enter and whether the business is the right size and scale to absorb. 

One of the biggest mistakes I see is buying companies that are too large, thinking a big leap will accelerate progress. But when the leap is too large, integration risks increase—people, customers, and product integration all become more challenging.

It's often said that a series of smaller acquisitions is lower risk than one large one. But you need to look at both the revenues of each company and the headcount. It’s a combination of both, but headcount is particularly key when considering operations.

If I acquire a company and, after the integration process, have a ratio of five existing employees to everyone from the acquired company, that’s ideal. Why? Because with that ratio, our culture will prevail, and we’re very proud of our culture.

We consistently win awards as a top employer, from the Boston Globe in Massachusetts to Forbes in Bulgaria and similar accolades in India.

We have positive employee relationships—our employee net promoter score is among the best in enterprise software, and our turnover is half the industry average. This continuity is good for business, too. With low turnover, we don’t spend as much on hiring or training, and we maintain consistency.

So, a 1:5 or 1:6 ratio works well for us in terms of headcount. For revenue, it’s proportional but not always exact. Sometimes we acquire companies that are up to 30% of our size, which can work within this structure.

Balancing objectivity and cultural fit in M&A decision-making

You look for a strong culture fit that will mesh well and you think about whether you can change the company's culture to align more with yours. It's a bit of both. You won’t find two companies with identical cultures, but you might find one with, say, 80% overlap. 

That’s not an exact figure, of course, but we look for similarities. For instance, Progress values collaboration, respect, trust, and continuous improvement—values our employees live every day. We want to see those same values in the companies we acquire.

Sometimes, certain cultural traits can be addressed at the top level. If transparency is missing at the top, for instance, that’s something I can enforce as the new leader. 

But other cultural aspects, like how employees feel about sharing information, may be harder to change. We analyze where potential cultural differences might exist and whether they’re manageable. 

At LOI, you don’t get much cultural insight at all. This cultural assessment happens between LOI and deal closing.

We’ll walk away from deals post-LOI if certain aspects don’t align, including financials, product quality, customer profiles, or people and culture. These are critical. 

Before LOI, you get one management meeting where you ask basic questions, and if it sounds reasonable, you proceed. But if later the cultural fit is far off, we walk away.

I also believe it's essential for buyers to avoid falling in love with an asset. You need to stay objective throughout the process. If there’s a significant issue, you may decide to renegotiate the valuation, but I generally try to avoid that unless there’s a compelling reason, like a substantial difference in the business size or metrics.

Building trust through transparency in M&A relationships

For me, trust starts with transparency, and I’m very upfront about that from the first conversation. I’ll be honest and say, “We may or may not do business, but I’ll always tell you the way I see things, and I want you to do the same.” 

If you ask me a question, I’ll give you an honest answer, and I expect the same in return. If that trust is broken, I find it very difficult to move forward.

Setting these ground rules and agreeing to be honest and open establishes a foundation for further conversations. As you continue discussions, you’re naturally validating the other party—not questioning every answer, but observing if they’re being consistently truthful. 

And if you’re not in love with the asset, you can step back if things don’t add up. For example, if I have to ask three different ways to get a straight answer, I’d question if I really want to proceed.

When deciding not to move forward, you have to explain why. It’s not about animosity. It’s simply saying, “I no longer believe what I’ve heard, so I can’t move forward.” It is what it is, without hard feelings.

Influencing a sale by building long-term relationships

“Convince” is too strong a word. Influence is more accurate. There has to be at least a small willingness on the other side to consider the idea of selling. You don’t start with, “Do you want to sell your business?” No one starts there.

You begin by understanding their goals and aspirations. I often do CEO-to-CEO calls, nurturing the relationship over time. They may not intend to sell in the near term, and that’s fine. I want to get to know them, and I want them to get to know me. 

I ask what their aspirations are for the business. They may say, “Next year we’re planning to grow, launch a new product, or achieve specific goals.” We touch base six or nine months later—how’s it going? Are you seeing progress?

At some point, you may sense that they’re getting tired. That’s when you say, “We’ve been talking for a few years, and I think you have a good business. You’re not quite reaching your goals—would it make sense to get there together?” Sometimes you can influence someone this way, and sometimes you can’t.

Objections often stem from just that—they’re hitting targets, enjoying the work, and feeling satisfied. In those cases, I say, “Great. We’ll wait.” I can’t change their mind if they’re truly content, but we stay in touch in case things shift.

Changes can happen for personal reasons as well, not just business. I once knew a CEO who owned 90% of his business and, after a personal life event, rethought his priorities. He’d spent over 20 years building the company and began considering other pursuits. Because of our relationship, we could have an open conversation, and that’s when he started to entertain the idea of selling.

Timing is key, and these deals don’t happen overnight. It’s about building relationships and waiting for the right time. You often have a large pipeline—maybe 100 companies—and gradually, over time, you land one deal at a time.

Maintaining valuation discipline in acquisition negotiations

There’s always a valuation gap. When you’re running a business, it’s your baby, so there’s some subjectivity in valuing it. If I’m approaching you, I’ll make the offer, and if you ask, “What would you be willing to pay?” I’ll tell you what I’d pay.

As for fishing for what the seller thinks their business is worth—not really. I’m disciplined about what I’m willing to pay. If you say, “No, that’s not enough,” I’d actually prefer a quick “no” over a long, drawn-out “maybe.” And I’d genuinely wish you success in finding a higher offer.

Yes, we’re very pragmatic about valuation. We’re extremely disciplined. While you always aim for the best deal, the real goal is a good deal. Now, if the seller has a number in mind, they might share it. But in negotiation, you typically don’t want to give the first offer.

As a buyer, there’s often pressure to make the first offer, and I’m fine with that. I’ll give the first number and say, “If you get a meaningfully higher offer, go for it. But if not, I’m still here.”

Also, if we wait six, nine, or twelve months and your business performs better, naturally the valuation will change. So, if you decide not to sell today but return after growing, say, 40% in nine months, of course, the number will be different—because at that point, your business is at a different scale.

Managing transparent employee communicatio

There are three phases. Before signing, you get very limited access to the team—maybe four to eight people. They get a sense of who we are, and we get a sense of who they are, but it’s minimal.

The key phase is between sign and close. Sign is typically when most employees find out about the acquisition. They may hear it for the first time through the public announcement, and this is where our communications and HR teams work closely together to prepare for “Day One.” 

We provide a clear “why”—why we’re doing this—and I hold a call or meeting to reinforce that message. We send electronic communications, outline the timeline, and describe the process they can expect.

We also clarify when they’ll receive specific information, such as if their role will continue or if there will be transitions. We typically classify employees into three groups: those who will be staying, those we need for a certain period (with additional severance for staying through the transition), and those we won’t retain. 

Transparency is key—we want to eliminate uncertainty, which is terrible for morale. We prioritize respect and ensure our severance policies often exceed those of the acquired company, partly because we’re larger and partly because we want to treat people well. 

Job security is always a major concern, so we’re upfront about our policies on compensation and benefits. For example, we let them know that we won’t cut their salary, which helps ease worries about mortgage payments and other obligations.

Beyond job security, employees want to know our plans for the business. Will we invest in it? Will we expand the product’s reach? We address these questions, too. Often, joining a public, global company like ours means upgraded benefits and a broader footprint, which can make employees excited about the new opportunities.

And similar communication about the “why” of the deal has to happen internally with our own employees. Only a small group works on due diligence, so when we announce an acquisition, we need clear communication to our broader organization as well.

Staying agile to overcome integration challenges in M&A

There’s always something unexpected that comes up. Don’t expect the deal to go exactly as planned—you’ll find things you didn’t uncover during due diligence. Sometimes you know something exists but don’t fully understand its complexity, especially if it’s a new type of business.

For example, when we acquired MarkLogic, they served the federal government, which required security clearances. We knew about this aspect, but we didn’t fully grasp the operational intricacies until integration began. 

It forced us to adapt our governance structure to meet both security requirements and internal standards, adding a layer of complexity we hadn’t anticipated.

Another major challenge was with Chef. We discovered that Chef employees weren’t informed that the company was no longer on a high-growth trajectory and wasn’t reaching the “unicorn” valuation they’d expected. 

When we acquired Chef for a lower valuation, some employees were disappointed and frustrated with prior management, and many left. Employee retention became a much bigger issue than we’d planned for.

To address this, we brought in a team from India to work on Chef, redeploying about 25-30 people from other projects. We then rebuilt the team around them, ensuring we continued to serve customers well. The business has grown since then, but it required immense agility and quick adaptation.

You need to stay proactive, constantly monitor for issues, and be ready to address them without finger-pointing. Success comes from keeping the goals in sight and overcoming surprises collaboratively, efficiently, and swiftly. That agility and resilience are part of our company culture, which plays a huge role in navigating these challenges effectively.

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