What are team lift outs?

Team lift outs – or team moves – are a great way for organisations to expand into a new geographic or functional area. In simple terms, team lift outs happen when a high functioning team moves together in a single, coordinated recruitment action. Team lift outs allow organisations to bring proven capabilities to the organisation, within a team structure that has already been successfully woven together. That structure will have established clients and can therefore allow companies to acquire new client relationships that would be much harder to achieve if only a single team member is recruited. Of course, the portability of clients is always, to some extent, an unknown, as the exact loyalties and preferences of clients are not always clear, even with a full team lift.  There are no guarantees of clients following teams and as such if contemplating a team lift out the acquiring organisation must be comfortable with the risk that clients might not immediately follow.    It is a reasonable assertion, though, that a team lift increases the likelihood of a client following compared with targeted recruitment of a key individual.  After all, the person you think is the key individual might not be who the client sees as pivotal in the relationship.

Mergers and Acquisitions or Strategic Hire?

Traditionally organisations looking to expanding have either merged with or acquired companies or business units. However, the risks associated with this type of activity can be high, with failure rates can be as great as 70% according to research by KPMG. Similarly, organisations can look to build their own teams with strategic hires. However, this process is much slower than either team lift outs, or mergers and acquisitions. Equally once separated from the conditions that made individuals a star it is often difficult to replicate that success quickly. And securing the services of key people from a variety of organisations may fall at the first hurdle when they simply can’t gel as a team.  Team culture – and the compatible working preferences that can be built in established teams – should not be underestimated.

What are the benefits of a team lift out?

Team lift outs are becoming more common as they allow an organisation to quickly acquire new talent quickly without the challenges of creating associated with creating a new team from scratch. Some of the benefits of completing a team lift out include:

  • The long-standing relationships of existing teams mean trust and collective experience is already present and as such teams hit the ground running. Teams which have been brought together for the first time lack this trust and collective experience and so take longer to get up to speed – with more risk for the employer.
  • There’s no need for team members to get acquainted, they already understand each team member’s strengths and weaknesses and as such they understand how to get the best out of each other. They know how their skillsets – and egos – fit together.
  • A team lift out can lead to gaining competitive advantage over a rival by reducing their ability to compete in a particular market or service.
  • High performing teams can boost morale and bring new ways of working to existing teams increasing overall productivity.
  • A team receptive to a lift out is likely to be one where the team likes to work together but the corporate environment the team works in is sub optimal. Identify the retarding factors in the team’s current organisation, then rectify them in your organisation, and you can quickly catalyse even greater performance.

What are the pitfalls of team lift outs?

Team lift outs are not without risk. It is easy to get carried away with the notion of gaining market share and scoring points on the competition, but it is important to understand what can go wrong so that you don’t waste time and money which could be detrimental to other opportunities. Here are some of the things you should consider:

  • Does the market opportunity really exist?
    • Team lift outs are ill advised where the hiring organisation has little or no experience in the market. If you are looking to a team lift out to enter a new geographic region or to expand your service offering to existing clients and/or acquire new clients then you could be on to a winner. But try and hire a high performing team into an area where you have little or no experience is asking for trouble. Make sure the team is playing in the same or similar space, but in a better corporate environment with better incentives and more potential for the future.  Remember, this may not just be about money – flexibility, autonomy, recognition of achievement, scope to prove yourself and better client situations are all examples of things that can drive teams.
  • Do you share the same goals?
    • Do you and the team have a shared clarity and understanding of your business goals and can you commit the resources needed to achieve them? If there is a difference in vision, then this should be discussed early in the process to see if these can be overcome. If not, it is probably not the right team lift out for your business. And if you overpromise on resource or support and not then deliver it, you will likely fail to get the traction you want with the new team.
  • What do you want/need to get out of the team’s external relationships?
    • Are you looking for the team to bring a high profile to your organisation or to acquire high profile clients? Client loyalties are difficult to predict in fact the only thing you can be sure of its that some clients will stick, and some will move but the chances of predicting which clients fall into which category is incredibly difficult. Do some brainstorming with the team members regarding how their current employer is likely to approach the client renetion challenge once they have gone.  As such it is always best to err on the side of caution rather than optimism. Hence, test how the team would look to create new client relationships if existing relationships don’t follow.  Don’t just assume that “If you build it, they will come.”  There needs to be a clear marketing strategy for legacy client retention (or “poaching”, which is what in reality this will involve).

Is a team lift out for you?

Team lift outs are inherently complex and have execution challenges. Teams are normally categorised as “in the market” – i.e. they are unlikely to be actively looking for an exit but may well be interested if an opportunity is brought to them.  This requires astute and well informed executive search advice.  Executing a successful team move requires careful identification of the team’s contractual obligations and potential risks to the acquirer.  Moorlands Human Capital has considerable experience and is uniquely placed to help you identify and attract the right team that will fit your business needs, taking the process from initial scoping through to contractual implementation.

For more information contact our CEO Paul Battye on 0207 887 4534