Mergers & Aquisitions

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Before, during, and after the merger (or acquisition), Stark HR can help you while increasing innovation, keeping communication going in all directions (upwards, downwards, across departments, across organizations), lessening the impact on those who are “reduced” and on the survivors, and assuring that cultural issues do not derail integration.

 

 

Stark HR’s role before the merger

 

We ensure that both organizations have a strategy mapped out in advance. Once the merger starts taking place, people will often be too busy to keep a strategic perspective.

 

Before the merger takes place, the leaders of both organizations – at least, of the dominant firm – should have a strategy mapped out, including communications to employees and customers, where layoffs will take place (if any do), and how the cultures should be merged. A SWOT (strengths, weaknesses, opportunities and threats) analysis per department will be done for the combined company.

 

A brief culture survey (preferably done via interviews as well as paper or Web/e-mail) will be undertaken in both companies to discover what the cultural differences are.

 

Sometimes this will be obvious in some aspects -e.g. one culture values teams and bottom-up innovation, the other favors command-and-control tactics – but not in others, such as how and whether individuals and teams are rewarded for innovations, how failure is dealt with, whether conflict is addressed openly, etc. This will prevent disconcerting delays between the announcement and the implementation of the merger/takeover.

 

Finally, before the merger or acquisition takes place, Stark HR will consider the non-financial issues. Will people in the two companies be able to work together? Will acquiring a company, or merging with it, destroy the properties or drive away the talent that made it worth having? How to avoid it? Who belongs to the “must-have” team?

 

Some of the questions to be answered prior to the merger are:

 

  • Is there a communication strategy to keep employees and customers informed?
  • Are the cultures for the two organizations compatible? Is there a plan for merging the cultures? Will one be dominant, and, if so, how will people operating under the other culture be brought on board?
  • What are each organization’s key strengths, weaknesses, opportunities, and threats?
  • What is each organization’s strategy? How will they be merged?

 

This is done by conducting interviews with senior leaders, one at a time. Difficult questions, for example whether there are alternatives to an employee, should be raised as early as possible.

 

Stark HR will analyze the issue of culture – how people work, how they think, what they value, and, of some importance, how they view the other organization. If the acquired (or acquiring) organization is viewed with disdain, these issues must be addressed up front. Likewise, severe cultural differences must be addressed. They can be overcome with attention and work.

In this light, Stark HR is able to use management coaching skills to help managers and executives to communicate effectively and completely, to address power issues, and to deal with cultural issues. In some cases, we may take a more active role; in others, we will act as a coach.

 

 

During the merger

 

The new leadership team needs to work together, despite cultural and personality differences, power issues, and other barriers. Stark HR can act as a facilitator and provide coaching; personal and team assessments can be helpful in enabling team members to work together constructively.

 

Here are the key areas where Stark HR can support you during the integration process:

 

Communication.

As people look inwards to try to find their place in the merged company and attempt to see their future in it – or outside it – productivity drops. The grapevine can become a major source of headaches. Constant, consistent, and honest communication is essential.

 

Power and conflict.

It is essential to bring conflict out to the surface and deal with power issues honestly. If one group is obviously in charge, that should be admitted early on so people don’t waste time with second-guessing. Often, people get wrapped up in turf wars which are destructive to both sides, rather than trying to figure out roles for both sides and have a win-win situation.

 

Culture

Organizational culture is an organization’s shared values, beliefs, and preferred ways to behave – is a key to success, and though many talk about it, few seem to have the skills to grapple with culture and work with both organizations to assure a good fit.

 

Operations

Ideally, processes can be examined to see where true synergies lie. In many mergers and takeovers, power relationships determine operational changes, rather than actual efficiencies or quality concerns. By making changes with facilitated cross-platform teams, Stark HR can help to ensure that the best of the two organizations are preserved.

 

 

Where we can help:

 

In a role as executive coach / consultant, Stark HR staff can also be effective through:

 

• Helping the leaders to agree on a clear and specific set of goals for the merger, with a focus on tangible, measurable results, which brings misunderstandings and conflict into the open.

 

• Scenario planning – will the merger work if there is a market decline? What will be the responses of customers and regulators?

 

• Investigating assumptions – the OD consultant, as an outsider, is in a unique position to bring out hidden assumptions. This should be done continuously throughout the process, though scenario planning and exploring options are expressly designed to explore and test assumptions.

 

• Rewards – even where bonuses or profitsharing help to increase motivation, the money itself is often symbolic, a measuring stick for achievement. Our staff will help your organization to set up milestones and celebrate small and large successes along the route to integration, so that people not only feel progress, but also feel that their achievements are being rewarded.

 

• Integrating initiatives – ensuring that managers are not overwhelmed by initiatives and changes that all seem to come at once.

 

• Watching key processes – often forgotten are key processes such as new hire orientation, training, and even compensation systems. These processes all support or sabotage both the present and desired culture. As HR professionals, we know the impact of these processes, and can work to make them support change efforts.

 

 

We care about your customer!

 

This is not a major breakthrough but it can cost ten times as much to gain a new customer as to keep an existing one.

More significantly, we know how employee retention has a strong impact on customer retention, which in turn has a strong impact on both profit and revenue.

 

By knowing what makes mergers succeed, keeping an eye on the human issues as well as the financials, and using appropriate tools, we can make your mergers work by quickly developing a strategy that helps the company to achieve the synergies it needs — and developing HR’s game plan for this process. All done with achievable goals, with stretch targets, and concrete milestones (supported by good, valid measures) for implementation.