For companies that grow inorganically, post-merger integration must consider the people impacts to gain any expected synergies of the deal. When looking at target companies that have developed complementary products and services, the retention of talent that has designed, built and successfully marketed these products are a critical piece for the overall deal success.
In a typical scenario of two companies merging together, planning for the newly combined organization structure needs to account for key personnel that are responsible for the products and services which drew the attention of the acquiring company. The 100 Day Plan must account for the immediate re-recruitment of these key personnel with clearly defined roles & responsibilities and have in place successful retention practices, including stay-on bonuses, once the deal closed. The last thing any acquiring company wants to see is their most valuable talent walking out the door and their expected benefits and synergies disappearing.
In addition to this traditional focus on talent retention, there is a related post-merger integration situation that requires companies to consider the importance of displaced talent. As companies look to focus on their core business capabilities, they often enter into long-term managed service provider agreements with 3rd party providers to gain competitive advantage through technology. In these situations, the company employees moving to a 3rd party provider require as much (or even more) of the planning and attention as the more traditional post-merger integration of two workforces.
In this scenario, the planning responsibility for the transitioning employees should not rest on the 3rd party provider receiving these employees, but also on the company from which these employees are transitioning. For the 3rd party provider, the inherent knowledge and expertise of these employees cannot be duplicated internally and could impact their ability to meet the contractual obligations and Service Level Agreements (SLAs) for their new client. For the company they are departing due to the age of social media, this could become a public relations issue. Again just like in the classic post-merger integration case, the people are critical for the success of this new partnership and need to account for before and after the deal or agreement is fully executed.
The following is an example that expands on ways Lake Shore Associates has worked with organizations dealing with talent retention in the Merger Integration space.
Our client decided to partner with a leading technology firm to take over the development and deployment of the technologies utilized throughout their stores. LSA was hired to lead the planning and execution of the employees’ transition to the technology firm. As mentioned above, the care given to peoples’ questions and concerns throughout the engagement were critical. We had numerous scenarios to account for across the employee population – from employees who had spent their career at the company to employees who had recently joined the technology firm with no idea that this change was about to occur. We also had employees who had been consultants and were now going back to a similar previous environment. Given all these scenarios, we had to closely collaborate with not only various company groups (e.g., HR, Labor, IT) but also with key personnel from the technology firm to make sure that the people’s questions, concerns, and even fears were managed from the moment the deal was closed until the actual employee transition occurred almost 3 months later. This included developing processes and communications to deliver to the transitioning employees the information they needed along the 3 month journey. Simple things such as transitioning from the company-provided cellphone to moving to their own cellphone plan and porting their business number to that newly purchased device needed to be coordinated. The most challenging task was the assignment of those employee responsibilities which were not transitioning with the employee to the new technology provider. We had to determine where in the company that responsibility had to transition, even if on a temporary basis and/or to an employee who did not have that responsibility.
Through it all, handling these types of challenges so typical in the post-merger integration space were critical to minimize employee departures. Although this was a very stressful and challenging time for employees, LSA made this process as smooth as possible leading up to the day the employees turned in their company badge and laptop and received their new firm’s assets.
Lake Shore Associates is a boutique, management consulting firm that helps organizations execute their business strategies with thoughtful approaches to project/program management, change/talent management and strategic supplier lifecycle management. The complexity inherent in the Post-Merger Integration in dealing with both internal and external changes across impact organizations require thoughtful planning and thorough execution for success.
For more information on how Lake Shore Associates can help you with your project/program management, change/talent management and strategic supplier lifecycle management needs, visit www.lakeshore.is. We will be most grateful to work with you.