The Dilemma of HR and M&A
HR department has got a crucial role to play in mergers and acquisitions. The IGATE acquisition of Patni last week is an example. It required the integration of 25,000 people. Informing the employees is a must in such situation, and similarly the employees were informed way back even before the stake holders. Within minutes of the announcement, employees received mails from the CEO, PowerPoint presentations explaining the benefits of the deal, and timelines for various activities. Discussion forums, Town Hall meetings and teleconferences were set up. Although both the company’s preferred independent HR policies, the queries that were posted anonymously were also answered. Post-acquisition, surveys need to be conducted in the acquired company, and training provided to staff, for them to get a feel of their new environment. Role changes are crucial; the sudden removal of top management in an acquired firm leads to instability. HR function has an increasingly important role to play, even during the due diligence stage of an M&A, to be able to assess the cultural fit of the transaction, particularly where the objective is complete integration of the acquired or merged entity. Cultural integration is a concern even with smaller companies. The constant evaluation of the effectiveness of the organization results in the need for the HR professional to frequently champion change. The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this. This strategic partnership impacts HR services such as the design of work positions; hiring; reward, recognition and strategic pay; performance development and appraisal systems; career and succession planning; and employee development. In today’s organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives.
The key HR initiatives have included
* development of preliminary organizational designs and identification of the top three levels of management
* assessment of critical players and deployment of appropriate resources in the new company
* retention of key people and separation of redundant staff
* development of a total rewards strategy for the combined companies
* communications strategy development and implementation
* integration of payroll benefits and HR-IS
* an ability to do all of the above with speed.
The guiding principles:
* Take definitive action and make decisions quickly--the secret for holding onto good people.
* Be candid with employees, and treat them with respect. Let them know that the combined entity will be a more valuable organization.
* Whenever possible, use ownership of the company as represented by stock options and stock grants to get everyone pulling in the same direction.
* Be honest about the people decisions that must be made.
* Treat those leaving with the same respect and attention as those staying.
The primary roles of HR during this phase are to
* develop strategies for retaining key people
* examine compensation and benefit programs
* identify barriers to a merged culture
* create and execute a comprehensive plan for communicating with the new organization.
All of the change-management expertise in the group should be called upon to address employees' anxieties about the merger.
The Ten Lessons of Integration
1 Integrate fast. Realize synergies and efficiencies sooner rather than later.
2 Dedicate the necessary resources.
3 Make tough decisions about organizations and people quickly.
4 Restructure and re-recruit top talent.
5 Set clear, short-term objectives; celebrate successes as you achieve them.
6 Communicate strategically; be open and forthright.
7 Allow the acquired company to conduct business. After all, that's why you acquired it.
8 Manage the culture integration carefully.
9 Focus on what each event means to individuals.
10 Keep your sense of humor.
HR department has got a crucial role to play in mergers and acquisitions. The IGATE acquisition of Patni last week is an example. It required the integration of 25,000 people. Informing the employees is a must in such situation, and similarly the employees were informed way back even before the stake holders. Within minutes of the announcement, employees received mails from the CEO, PowerPoint presentations explaining the benefits of the deal, and timelines for various activities. Discussion forums, Town Hall meetings and teleconferences were set up. Although both the company’s preferred independent HR policies, the queries that were posted anonymously were also answered. Post-acquisition, surveys need to be conducted in the acquired company, and training provided to staff, for them to get a feel of their new environment. Role changes are crucial; the sudden removal of top management in an acquired firm leads to instability. HR function has an increasingly important role to play, even during the due diligence stage of an M&A, to be able to assess the cultural fit of the transaction, particularly where the objective is complete integration of the acquired or merged entity. Cultural integration is a concern even with smaller companies. The constant evaluation of the effectiveness of the organization results in the need for the HR professional to frequently champion change. The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this. This strategic partnership impacts HR services such as the design of work positions; hiring; reward, recognition and strategic pay; performance development and appraisal systems; career and succession planning; and employee development. In today’s organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives.
The key HR initiatives have included
* development of preliminary organizational designs and identification of the top three levels of management
* assessment of critical players and deployment of appropriate resources in the new company
* retention of key people and separation of redundant staff
* development of a total rewards strategy for the combined companies
* communications strategy development and implementation
* integration of payroll benefits and HR-IS
* an ability to do all of the above with speed.
The guiding principles:
* Take definitive action and make decisions quickly--the secret for holding onto good people.
* Be candid with employees, and treat them with respect. Let them know that the combined entity will be a more valuable organization.
* Whenever possible, use ownership of the company as represented by stock options and stock grants to get everyone pulling in the same direction.
* Be honest about the people decisions that must be made.
* Treat those leaving with the same respect and attention as those staying.
The primary roles of HR during this phase are to
* develop strategies for retaining key people
* examine compensation and benefit programs
* identify barriers to a merged culture
* create and execute a comprehensive plan for communicating with the new organization.
All of the change-management expertise in the group should be called upon to address employees' anxieties about the merger.
The Ten Lessons of Integration
1 Integrate fast. Realize synergies and efficiencies sooner rather than later.
2 Dedicate the necessary resources.
3 Make tough decisions about organizations and people quickly.
4 Restructure and re-recruit top talent.
5 Set clear, short-term objectives; celebrate successes as you achieve them.
6 Communicate strategically; be open and forthright.
7 Allow the acquired company to conduct business. After all, that's why you acquired it.
8 Manage the culture integration carefully.
9 Focus on what each event means to individuals.
10 Keep your sense of humor.