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Post-Merger Integration: Don’t Leave Talent on the Table
by Alexander Mann Solutions Team15th Jun 2015
We’re just past the half-way point of 2015 and it’s shaping up to be the hottest year in M&A activity since the global financial crisis of 2007-2008, with Charter Communications’ $79 billion acquisition of Time Warner Cable leading the pack.
Stats vary, but some studies show that 70% or more of mergers fail to deliver the expected return on investment. At best, it’s probably 50/50. A toss-up. That’s because a lot of things can—and do—derail success, including a poorly conceived talent strategy as part of the integration process.
Here are a few of the things companies can do to solve the merger mystery from a talent perspective:
- Lead from the top. Take senior people out of the business—from each organisation—to lead the programme management office (PMO) and dedicate their efforts to the integration programme. This helps ensure there’s line of sight into the best that each organisation has to offer, while demonstrating to the rank-and-file that the merger is supported by senior management.
- Give talent acquisition a voice. Once your PMO is in place, the question then turns to what skill sets you need on the integration team. We think it’s vital to include a senior talent acquisition professional—not leave it to an HR generalist, as most organisations do. The newly merged entity will face challenges around employer branding, talent technology platforms, differences in recruitment delivery design, supplier management, and a whole host of talent-specific issues. You need someone who understands these issues intimately.
- Draw up a “keep at all costs” list. Consider having managers assess their staff using a nine-box talent review to identify high performers and high potential employees you want to keep—and communicate regularly with them to ensure they know they’re central to your future. Conduct ‘stay’ interviews so that they feel valued, and so you can find out what’s needed to keep them. And if you lose some stars along the way, maintain contact so that they are future boomerang candidates.
You also need to look at critical resources who’ll get you through the first few months of the merger, even if you don’t believe they’ll be needed long-term. For those you expect to leave eventually, offer them an orderly, productive and dignified exit.
- Consider culture. When you’re bringing together two well-established organisations, there will almost always be a bit of culture clash. Consider a complete organisational culture assessment of the two organisations to help employees to understand how they’re different—taking the best of both worlds to create a ‘super-culture’ that enables people to work better together.
- Get help. In many cases, a merger will bring together two organisations that were once fierce competitors. To combat the natural hive mentality this creates, you should consider working with an outside consultant to referee any clashes and make sure everyone is pointed in the right direction on the change management journey.
- Everything counts. One of the key responsibilities of your project management office (PMO) is to make sure that hiccups in day-to-day systems and processes don’t scuttle success. Finance and IT systems are often the immediate focus, but consider the consequences if, for example, if an HR payroll system isn’t integrated on time and all of your staff from the acquired company miss a paycheque. That would leave a bad taste in anyone’s mouth.
Not every merger is built the same and some will no doubt be more difficult than others. Sometimes you’ll be merging with a fierce competitor. It might have been a hostile takeover. You may have had to jump through regulatory hoops before the deal is completed. These factors can make the road an even rockier one. But with a smart talent strategy in place, you can at least set yourself up for a greater chance at success