Posts

Four Ways HR Can Support M&A Success

/ /by

Merging companies requires thousands of worker-hours to integrate systems, processes and workforces, but scant time is spent understanding how well varying cultures will work together.

From a strategic perspective, an acquisition or merger is typically a path to faster growth or market dominance. But the ability to achieve those goals is far from assured, as many deal makers have found over the years. In fact, the failure rate of mergers and acquisitions in many studies conducted over the past several decades show that the rate of failure is at least 50 percent, with one study finding that nearly 83 percent of organizations do not achieve their merger goals.

Most experts agree, that the primary reason that most merger and acquisition (M&A) deals fail is a result of poor integration! In a 2006 study by the Corporate Leadership Council, senior executives reported that integration was the greatest source of failure in M&A and rated several human capital aspects as most critical to successful integration.

Integration management from an HR perspective is the process of monitoring and proactively responding to human capital barriers to integration success, allowing for the company to realize the full value of a deal. In this same study, the most commonly cited human capital barrier to M&A success was an organization’s inability to address cultural integration issues.

With this in mind, here are four ways that HR can help support the merger and acquisition process:

  1. Get involved in the acquisition process early

At the beginning of any cultural integration work it is important to set clear goals, structure, and leadership from start. This means bringing people together on project teams from very beginning, not after a deal is signed, but during the due-diligence phase of any M&A project. The primary goal of cultural integration is to work to identify existing values and branding to determine how to take the best of both worlds and combine them.

Surveys and focus groups should be conducted by HR to ask questions intended to gain a better awareness of the culture of the acquired company and then use the answers to help identify gaps or risk areas. Sample questions include:

  • Who’s running the company?
  • Who does the talking in the meetings?
  • Speed of decision-making—fast or slow?
  • Why do people like working for the company?
  • Are individuals in clear functional roles or doing work across functions?
  • How formal is the working atmosphere?
  • What do people wear? Formal? Casual?
  • How do they refer to one another? First names, Mr./Ms.?
  • Appetite for risk?
  • What kind of process documentation is available for review?
  1. Conduct due diligence to identify human capital risks – As part of the due diligence process to close a merger or acquisition HR has many areas they need to focus on. These include, but are not limited to, a thorough review of the seller’s employment and benefit policies, current list of job titles, compensation scales and competency frameworks. Additionally, if done right, special attention is paid to understanding the culture of the organization to identify any potential challenges that might occur as the acquiring organization begins to integrate these new employees into their organization.

As part of the due diligence efforts it is also highly recommended that you attempt to identify ‘culture carriers’ —employees who are highly/positively influential— to help identify specific areas of cultural fit & risk within both the target and acquiring organizations. This can be done through a series of carefully constructed interviews, but if you want to get even fancier, consider conducting a social network analysis study to help identify who the influencers, brokers and bridges are within each company. See “Additional Resources” for more information on this topic.

  1. Plan for the human side of integration

According to a 2015 survey by Robert Half Management, employee anxiety spikes immediately following news of a corporate merger. Managers need to keep team members apprised of new developments and provide reassurance where they can. Effective cultural integration starts with ensuring individuals feel understood and recognized. Pre-close, a variety of approaches to understanding and affecting culture are recommended. These can include the following:

  • Online surveys to identify what it feels like to work at the acquired organization and impressions of the new organization.
  • Focus Groups designed to understand how to best minimize impact of cultures
  • Employee data: Getting each acquired employee set up with an employee id before they start is essential to making sure the employee has access to all systems and resources they need to start working on day one. While this in important to onboarding in general, it plays an even bigger role if onboarding an employee due to M&A. This is also the number one factor that if not done well will result in greater levels of attrition amongst these groups of individuals.
  • The little things matter: Have business cards, office supplies and a work station ready to go on their first day

It is equally important to continue to address the human side of integration, post-close. To do this, consider involving the broader employee population in directing integration initiatives. Additionally, HR should try and complete a job analysis for all key roles prior to integration. It is important to make sure that both the acquired employees and the existing employees understand their roles and job duties as a result of a merger or acquisition.

Address any areas where there is considerable overlap as soon as possible, if not before the integration process begins. Lastly, use focus groups to provide opportunities for small groups of individuals at both the acquired company and affected teams to share feedback on the process to date and ideas for ensuring a smooth integration.

  1. Measure performance to ensure future improvements: 

The target company should examine both hard financial data and soft measures, such as training participation and employee engagement, at regular intervals during the first twelve months post-close. Examples of financial measures/factors to consider in your evaluation include revenue, productivity and customer satisfaction rates. Other soft measures can include employee retention/turnover, performance and the frequency with which new employees leverage networks within the acquiring organization.

Photo Credit: cfdtfep Flickr via Compfight cc

2014: Year of the Social Employer Brand Ambassador

/ /by

We already know that social media is extremely powerful for business communication. Essentially, anyone with an internet connection has the potential to cultivate and grow a brand. Corporate brand, product brand, personal brand, employer brand — the possibilities are limitless.

It’s as easy as flipping on a light switch! Well maybe not that easy, but social channels have blown traditional media out of the water, and there’s no going back.

Of course, with its potential to drive brand development, social proliferation can also have a huge impact on talent acquisition and retention. How does that work? The idea in leveraging social media to grow a brand is through a fan base that we call “brand ambassadors.” Collectively, your ambassador group functions like a marketing and promotional team that amplifies the message for whatever it is that you’re trying to sell — products, services, yourself or your organization.

Employer Brand Ambassadors: What’s the Challenge?

If you’re an employer, which audience should be your biggest, most important source of brand ambassadors? Customers? Industry thought leaders? Local media outlets? Nope — it’s your employees. But do organizations currently view employees this way? Based on my experience in working with HR executives, I struggle to say yes.

We know that social media instantly connects you with the online world, and the most effective way to grow an employer brand is through social media channels — Facebook, Twitter, Google Plus, LinkedIn, blogs, Instagram, Pinterest — the list goes on. So ideally, if employees are your prime brand ambassadors, and social media is the best way to grow your brand, you should be able to say that, when your employees interact with others on social channels, they’re effectively promoting your organization as a great place to work.

Are you confident making that claim? Unfortunately for most employers, the answer seems to be NO!

Enter My Bold Prediction for 2014

With the holiday season upon us, we’re seeing our share of blog posts about HR Technology predictions for 2014. One of many good reads is from Craig Bryant at the TLNT blog, “5 Predictions for Where HR Technology is Going in 2014.”

My key prediction is a tad bold, but here goes: I think that organizations are ready to give their employees the right tools, so they can easily represent the company as brand ambassadors on social media. In other words, employers will actively explore and implement cloud-based solutions that make it simple for employees to curate and share high-quality, on-brand content with their connections.

Why Does This Shift Matter?

The biggest barrier organizations face when integrating social media across business functions is the inability to ensure a consistent, coherent brand message and voice. It’s about mitigating risk and ensuring that employee social media activity creates a net positive impact, and doesn’t result in PR fiascos. (Case in point: HMV employees react to firing on Twitter.)

Organizations that figure out how to remove these barriers so employees can comfortably operate as employer brand ambassadors will see huge gains in all facets of their business. Think about it — if your company has 500 employees, and each employee has an average social media network of 300 people, that’s a direct network of 150,000. All of these 150,000 connections have a network of their own, so before you know it, you’re reaching millions — all because you enabled your inner circle.

Mark my words: 2014 will be a watershed year of “employee enablement.” Organizations will gain momentum by creating and supporting brand ambassadors who come from within their ranks.

There are very few players in this space, but watch for momentum in the year ahead. You’ll want to look at platforms like PostBeyond, Jostle and EveryoneSocial to see how they help organizations support employees as brand ambassadors. Fasten your seat belts ladies and gentlemen, 2014 is going to be a milestone year for social HR business tools!

(Editor’s Note: To discuss World of Work topics like this with others in the TalentCulture community, join our online #TChat Events every Wednesday, from 6:30-8pm ET. Everyone is welcome at events, or join our ongoing Twitter conversation anytime. Learn more…)

Image Credit: Pixabay

Preventing Unforced Social Recruiting Errors

/6 Comments/ /by

Written by Omowale Casselle

Usually, one of the key characteristics of champions is that they have an amazing ability to prevent themselves from making unforced errors. Opponents will often try to force you into situations that they can utilize to their advantage. But, if you can do those things that you do well on a consistent basis without making mistakes, you will often come out ahead. As we know, nothing is more important for the sustainable competitive advantage of employers than the ability to continually attract, recruit, and retain top employees.

As we move further and further into the emerging territory of socialization and online recruiting there is an increased opportunity to make unforced errors. The primary reason is that the rules aren’t well defined so both candidates and employers are as awkward as two teenagers on a first date. Each wants to impress the other, yet neither knows exactly what to do or how to do it. This uncertainty is combined with the fact that there are some people who would be totally happy to see you fail.  The key is to stay focused on your employer value proposition and effectively communicate that with candidates.

If not, you’ll find yourself making unforced errors which will compound the already difficult challenges of recruiting in an emerging environment.

So, what are the unforced errors that you should be on the lookout for?

Instigators

As long as people have been interacting in the online environment, there have been a small group of people who are interested in stirring the pot for no other reason than to make others angry. These people who have far too much time on their hands will attempt to take advantage of the increased access to employees to engage in anti-social behavior.  Without discipline, your company can easily end up making an unforced error. This can happen by either engaging in unprofessional back/forth discussions or circular arguments.

To prevent this, you must remember the purpose of your online activity. Your #1 goal is to attract, recruit, and retain the top talent that will increase the competitive advantage of your organization. Anything that is counter to that purpose should be ignored. The immediacy of social media and social networking makes it more likely that instigators will try to bait you into arguments. But, you should take steps to ensure that ambassadors for your organization have the discipline to maintain their composure when engaged by instigators.

Disgruntled Candidates

After going through perhaps a phone screen or an in-person interview, this person has not advanced to the next stage in the process. Unfortunately, they don’t agree with your rationale. So, their goal is to create a scorched earth policy within your current social recruiting efforts. This person will not make it clear that they are a candidate that wasn’t selected. Instead, they will try to use social discussions to highlight perceived flaws within your company that they feel will make your opportunity less attractive to prospective candidates.

It is important to diplomatically take these discussions offline. Not because you are trying to create the impression that your company is without flaws, but instead these people are presenting information about your company without the proper context (rejected candidate who has a score to settle). These discussions can be extremely confusing to prospective candidates and can do significant damage if your employees engage publicly.

Competitors

As we’ve seen from the different anti-poaching agreements that have recently come to light, most employers recognize the need to win the war for talent. Competitors have an opportunity to create unforced errors by using their industry knowledge as well as their understanding of your competitive advantage.

Often, competitors will not have deep insights about what exactly it is like to work at your company. But, their knowledge is dangerous enough to create challenges with your social recruiting efforts. If you are in a discussion with someone who appears to have the level/quality of information as a competitor, it is important to reinforce your unique value proposition. Remember, your competitor is just as convinced that their value proposition is superior to theirs as you are. This is a great opportunity to communicate exactly what your advantages are for prospective candidates. Don’t be tricked into argue your value proposition on their terms.

As an increasing number of employer and candidate interactions happen within the online environment, it is extremely important not to make unforced errors. We see that there can be a variety of different scenarios that might lead you in this direction. What other unforced errors have you seen employers make and what advice do you have for preventing it?

IMAGE VIA chascow

About the Author: Omowale Casselle (@mySenSay) is the co-founder and CEO of mySenSay. We help top companies and future leaders make better employment decisions.