Mergers and Acquisitions Involve People Assets Too [infographic]

by Sharlyn Lauby on February 15, 2013

Mergers and acquisitions (M&A) are in the news. US Airways and American Airlines. Berkshire Hathaway buying Heinz.

Naturally, part of the conversation in M&A situations is the transfer of physical assets, like property and equipment. Another big part of the process involves employees. It’s critical during times of transition to communicate, communicate and communicate some more. Both organizations are in the flux of change and need effective leadership.

This is a critical time for human resources professionals to offer value to the organization. Today’s infographic from Mercer and Column Five, shares some insights. And opens the door for interesting questions.

For example, the graphic gives HR credit for meeting the demands of the business during M&A activities, but also points out the need for greater leadership. Is this a place where HR needs to focus future efforts in terms of training and development programs? Or is the expectation that operational leadership should spend greater time mentoring and coaching their teams? Possibly the answer is both.

What do you think?

mergers, acquisitions, M&A, leadership, HR, human resources, training, Column Five, Mercer
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Tim Collins February 15, 2013 at 8:09 am

Sharlyn,

A great subject for discussion, and an area where HR can and should have a significant role. HR aspects of acquisition integration is one of my main responsibilities @ IBM, and we do a lot of them, so I have an opinion. ;-D

Plain and simple, HR’s role is to support leadership in achieving the business objectives for the transaction. Almost always, the reason for the deal is the people and what they have created and bring to the acquirer– IP, patents, knowledge, expertise, clients, revenue, profit, technology, marketing, more. The way we manage the people aspects of the deal can often make the difference between success and failure.

People. What do people need?

They need to know why you intend to acquire their employer. What is the thinking behind the deal? HR should coach senior leaders to make this as clear as possible.

People need to know what you plan to do with them, do they have a future. To the extent you know, tell them. If you don’t, tell them when you will. HR should drive business leaders to make these decisions.

People need to know how the integration will proceed, when, how, who, where. HR should work with the business leaders to develop and then share an integrated, global “big picture” plan.

People need to know, what’s it like to work at your firm? They know your public reputation, but what is it really like? You should be honest. Don’t give them platitudes, tell the truth.

People need to know what their focus should be. Being acquired is intense, it’s hard, the change curve is real, and the various functions and team can “swarm” and completely overwhelm the acquired company. HR should work with business leaders to ensure our plan fits with business priorities, it’s realistic, manageable and helps to achieve business outcomes. We should also work with our colleagues in other HR “towers” to help them understand “how it feels” to be acquired, to raise awareness and sensitivity, and prevent toe stubbing.

I hope this adds to the conversation.

Tim Collins February 15, 2013 at 8:17 am

Oops, forgot to mention change management, absolutely critical and where HR plays a leading role. Leadership Alignment, talking openly and deeply, in a structured way, face-to-face, about what the acquisition brings, how it fits into the acquirer, who will play what role, what is the plan to maintain and then grow the business. A baseline survey of acquired employees. Going forward, focus groups, roundtables with senior leaders, follow-up surveys, monitoring and tracking of what is and is not working, adjusting the plan. Tracking business results, monitoring headcount growth and attrition, etc.

Tom G February 15, 2013 at 1:46 pm

First chart says it all. Culture eats strategy for breakfast and CEOs for lunch, just take a look at ALU.

Sharlyn Lauby February 15, 2013 at 1:54 pm

@Tim – thanks so much for sharing your expertise. I particularly liked your comments about leadership alignment. M&As take time – I’ve seen companies wait over two years after an acquisition to make major change.

@Tom – Culture is king. Thanks for the comment.

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