Maximize the People Impact in Acquisitions

Maximizing the Impact of People
in an Acquisition

Most acquisitions fail to achieve the original financial objectives that were anticipated. Research shows one top reason is that parent organizations fail to fully integrate, activate, and engage the people and culture of the acquired firm.

Getting the “people” side of acquisitions right is essential, though. In today’s world, service is a significant part of almost every business, and people are more transient in jobs than ever before. It’s tough to deliver your brand promise and retain top performers during an acquisition, but the alternative of not doing it isn’t pretty.

If your organization is considering an acquisition, here are some key things to consider:

Get aligned. Regardless of the nature of the transaction, it’s essential to align cultures and values—and that means aligning people. We all process words through our own filters; just because people say the same words doesn’t mean they have the same understanding. Ensure company leaders rally around a common mission and vision by bringing leaders from both organizations together in a facilitated alignment process.

Stay focused. Employees look first to leaders for guidance, motivation, and focus. This is particularly true during times of organizational transition and disruption. Leaders need to be visible, aligned on message, and armed with the knowledge and tools to address concerns. Create a toolkit for your managers and leaders to use in addressing concerns and answering questions.

Address questions. It’s critical (some would say necessary) to include clear and compelling communication throughout the transaction lifecycle. As quickly as possible, communication needs to start by addressing three essential employee questions:

  • Do I still have a job?
  • What’s my pay and total compensation/rewards?
  • Who is my manager?

Be transparent. Fully engaging the acquired company requires creation of trust. Trust doesn’t happen overnight—you need to eliminate reasons for people to be skeptical. It starts with transparency. Share as much as you can as early as you can.

Control the story. People can handle good and bad news, but no news is an issue. With limited information, they will “write their own story.” Tell them the vision, strategy, and timelines and share information regularly.

Anticipate change. If there are process and system integration efforts (and often there are), don’t forget to plan for the changes to come, using tools such as impact analysis, internal marketing, training, and adoption measures.

The bottom line: People matter.

In any acquisition, the desired deal outcome rests to a surprisingly large degree on how well employees are supported and integrated throughout the transaction process. Managing the people side of acquisitions inside both affected organizations is vital—from the day the deal is announced through close and well beyond.