How to keep the best people during a merger

How to keep the best people during a merger

Does merge have to mean purge?

When two companies become one, either through a merger or the acquisition of one by the other, it’s not just logistics, assets and finances that are involved. Like a newly blended family, there will be those who embrace the situation and others who fight against the very notion of change.

It’s about people.

So, if you’re in charge, how do you know exactly who you’re inheriting? And how will they adapt to their new home?  Is it inevitable that good people will go? And how will you identify those who maybe aren’t going to fit in?  How can you keep the choppy waters of M&As calm for those who feel all at sea?

As with so much in life, communication is key, right from the start of M&A negotiations.  Beware the grapevine: you can never overestimate what your staff pick up on and few things are more detrimental to productivity and morale than Not Knowing.  If the rumour mill starts, it’s important to respond when asked about future plans.  Obviously, there are times when confidentiality is essential (not least for legal reasons) but if you’re running the show, it’s still better to give an honest response, as far as you can, if you’re asked directly about the future ownership of a business or if a big change is on the horizon.  Once the merger or acquisition is underway, take the time to keep everyone informed on a regular basis; set up a transition task force and acknowledge the fact that this is likely to be stressful for both sides for a while.

The stark truth is that, in the US, for example, roughly 30% of employees are made redundant after a merger or acquisition within the same industry*.  While that obviously means that conversely 70% of employees don’t have to move, it’s not surprising that an atmosphere of unease and tension is bound to ensue once a big shift is confirmed.

You’ll want to keep your staff motivated during a period of transformational change and if you’re acquiring additional teams, you’ll need them to be equally engaged.  Generally speaking, people react in three different ways when significant change is afoot:

Cling to the wreckage

They keep their heads down, carry on as usual and assume it will all be smooth sailing, despite what’s happening around them.  These individuals are most likely to flounder.

Jump ship

They will size up the situation, assess how their position is potentially going to be affected, assume a worst case scenario and prepare to go elsewhere.

Man the lifeboats

The most valuable crew members of all: these are the people who see the positive, are prepared to be flexible and open minded, and will help steer the new combined organisation on its new course. You can begin to see which people you’re going to want to be working with . . .

But how do you know which teams, which senior execs, even, are the true ‘keepers’ of a company you may not actually know that well?  You can do all the due diligence you like on financial matters and check every contract within an inch of every full stop, but do you know what will happen to the sales team if Roger leaves?  And will Kirsty bring in the same results if she has to work with Ben? And is their sales team as good or even better than yours?

If you really want to benchmark the skills of those you are acquiring why not consider some psychometric assessments. You can coach those who show talent and aim to keep those with the skills you require to move the new business forward. Psychometrics are evidential, avoiding the bias of ‘face fitting’.

Ros Taylor Company (RTC) can actively help you manage the risk factors.  We design strategies, in advance, so you don’t lose the best people by the wayside as the business goes through the merger or acquisition process.

Gain the tools and insight required to assess, re-deploy or promote, speedily and effectively, gaining the respect and confidence of your newly combined teams.  Give human assets the same rigorous due diligence as you do everything else and the benefits will speak for themselves.  When you merge or acquire, you’re going to need people who are resilient and agile in the face of disruption and distraction.  It can be tough uniting different corporate cultures, systems and processes, even different working hours and office locations.

By thinking and planning ahead, senior managers and directors can prevent many HR teething problems, and, most importantly, get to hold onto the cream of the crop.  That might be those with technical expertise, brilliant team skills or specialist knowledge; Sandra in accounts who is the only person who knows how the payroll system works.  Maybe it’s Andy with the unrivalled contacts network.  We can help identify those whom you just can’t afford to lose.  Or it could simply be you need an objective view on how the new Board is going to gel together.  With our guidance, you can enable people on both sides not just to survive the M&A process, but to thrive and grow; just like the newly united business itself.

Ros Taylor Company is based in London and Edinburgh and specialises in executive and corporate coaching for organisations across all sectors, around the globe.  For more on our People Due Diligence services, please get in touch or go to http://www.rostaylorcompany.com/team-coaching/

 

*Source: Harvard Business Review