Merger

Merger

What role for HR during mergers and acquisitions?

Most of what appear at first to be good merger or acquisition deals sadly fail when the two businesses attempt to integrate to form one seamless organization.

The deal may appear to make eminent sense from a financial and strategic perspective, but somehow the two organizations do not blend. Even worse, in many cases the individuals on the integration teams do not have the skills, knowledge and experience required to plan the project in great detail, resolve issues promptly, redesign processes correctly, or adapt systems to the new merged company's needs. Either way, the result is a dysfunctional organization that has destroyed economic value.

All too often, the role of HR in a post-merger integration is focused primarily on organization design and aspects relating to employment law, remuneration and pensions. Any time that may be available after dealing with those topics is dedicated to internal communication. This restricts HR to what used to be called “personnel” a few decades ago, dealing with the transactional side of resource management rather than the development of the organization.

Many mergers and acquisitions are an opportunity for companies to redefine themselves, with a new vision, new values and ways of working. In practice, these have little chance of coming to life unless they are expressed and perceived in daily behaviors, and this is the first of several areas in which HR needs to step in and take a lead role.

Step one: making the vision tangible

HR must translate the vision and associated values into visible manifestations of ways of working and behaviors which are “in” or “out of” character, and to coach senior and middle management for them to adopt and comply with these new “house rules”. By doing this, the new values and ways of working become tangible and will gradually be emulated across the entire organization rather than just remaining a statement of intent from the...