Interview on "M&A Stories from HR, People, and Cultural Perspective"
Show Notes: Overall 70% of M&A deals fail as per Harvard Business Review. When these deals fail, the impact of these failures tends to be in millions of dollars. They affect employees, leaders, other staff members, contractors as well as communities.
A significant number of them can be attributed to people, organization, and cultural issues. This means it is important that these issues are addressed up-front during an integration before it is too late.
People, organization, and culture risks can be put into 6 different categories:
HR functional risks
Specifically to leadership risks, during integration succession planning is often not thought through deep enough irrespective of the size of the companies involved. In good integrations, leaders do end up thinking about succession planning but not necessarily formalized them. Moreover, with succession planning even if informal, people who get identified as potential future leaders, often get strongly incentivized to stay around after the acquisition.
One fact that can’t be ignored is that there will always be people who are considered their manager’s favorite. And these people are likely to be retained by their managers, post-acquisition.
Integration leaders may review a tool called Organization Network Analysis that reviews people's connections inside the organization, see where the information flows and who are your critical influencers are.
Organizations should conduct a post diligence huddle. In the huddles, all the people who were involved in the diligence activities gather together and answer two questions:
How will we break this business when we do the integration, the way we do things?
And the second question is who should we keep on-board?
Listen to this episode and learn more about what Dr. Klint C. Kendrick has to say about HR in M&A transactions.
Dr. Klint C. Kendrick has worked in human resources for over two decades, with extensive experience in mergers and acquisitions, international HR, people analytics, total rewards, workforce planning, diversity and inclusion, employee engagement, recruitment, and retention. Dr. Kendrick has worked in multiple environments, ranging from HR leadership roles at Fortune 500 companies like Oracle and Boeing to being an HR department of one for scrappy start-ups.
HR M&A Roundtables: https://www.mandaroundtable.com/
HR Due Diligence Book: https://smile.amazon.com/dp/1734958308/ref=cm_sw_em_r_mt_dp_ND3FBFBQHHBXJQEVZ72X
The host of the interview is Anirvan Sen, CEO - Fifth Chrome, https://www.linkedin.com/in/anirvansen/
This interview is part of a series run by Fifth Chrome, a firm that enables experienced professionals to build "Future Capabilities for Business to thrive".