The Human Factor of
Mergers & Acquisitions
HOW TO RETAIN TOP PERFORMERS
POST-INTEGRATION
Andrew Partheniou
|
Jimmy Song
|
Simon Foucher
|
Stefanie Perrone
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
Current State
70% M&As fail to deliver on targets
• Business focus on Financial
• OB Focus on People
M&As are disruptive life events
• Lost of identity
• Culture clash
• Uncertainty / Stress
Need to consider the “Human Factor” in M&As
CONCLUSION
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Key Success Factors
Identity
Culture
Motivation
Process
COMMUNICATION
Human factors are critical to ensure retention of key people
Identity
Who am I in this new Organization?
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Identity
Family
Work
Place
Social
Circles
Identity
Work organization play a crucial role in shaping identity
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
4 Approaches to post-merger Identity
Assimilation
Confederation
Federation
Metamorphosis
Excpet for federation, all outcomes imply changes
CONCLUSION
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Assimilation & Metamorphosis: cope with new identity
Justice
Build Trust
Stability
Sell
Benefits
Goal: Reduction of insecurity and stress for individuals
Culture
Understand Norms and Expectation
INTRODUCTION
IDENTITY
Culture Integration – Overview
CULTURE
COMMUNICATION
CONCLUSION
How to Merge Culture
What is Culture?
•Shared Meaning
•Understand Norms and
Expectations
Why is it Important?
•Conflict Avoidance
•Aligns Expectation
MOTIVATION
Pre-Merger
Planning
Implementing
Reviewing
Successful culture integration reduces chances of failure
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
Stage 1 – Pre Merger
Innovation
Relationships
Autonomy
Performance / Reward
Risk
Key to success is to clearly identify culture differance
CONCLUSION
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Stage 2 - Planning
Object
• What
dimension
to
integrate
Goal
• Clarify
Method
Budget
• Which
ones
• Time Table
A day invested in planning saves a week of issues in
implementation
• Training
• Other
items
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
Stage 3 - Implementation
Create atmosphere of integration
Clarify Norms
Build Trust
Communicate
Prepare for Conflict
Equity
Many tools to chose from to integrate culture
CONCLUSION
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
Stage 4 – Review Stage
Find Difference
•Results Vs. Expected
Explain Difference
•Document findings
Take action
•Revise technique
•Apply at next merger
Continuously improve integration performance
CONCLUSION
Motivation
Individual View of Retention
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Identify Top Executives
Executives
•High Salary
•High corporate ROA
•Companies of
comparable size
Only invest in keeping key executives
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Top guns at the Non-Executive Level
Combination of 2 our of 3 Methods
Document
& Data
Approach
Surveys
Target the right individuals
Social
Network
Mapping
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Intrinsic Retention Programs
Executives
•Promotion Possibilities
•Power shift from
shareholders to
managers
•Parent CEO controls
high share volume
Maintain intrinsic motivation
Workforce
•Address job security
concerns
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
Extrinsic Retention Programs
Avoid going down Maslow’s needs hierarchy
CONCLUSION
Communication &
Process
Ensure Reality Matches the Theory
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Organizational Citizenship Behaviour
Increase
perceptions of
OCB Dimensions
Increase OB
through effective
communication
Increase
Employee
Happiness
(Satisfaction)
Increase
employee loyalty
and retention
Communication satisfaction is positively and significantly
related to OCB
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
The Communication Triad
Communication
Trust
Organizational
Commitment
Communication and trust increases organizational
commitment
CONCLUSION
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
Formal and Informal Communication
Strategize
Truth
Timing
Reinforce
•Strategize and prepare a formal communication plan
•Use a truthful approach at all times
•Remain consistent
•Implement frequent communications
•Over-communicate
•Manage Change
•Use “Transition Teams”
Reinforce leadership credibility and forge trust
CONCLUSION
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
COMMUNICATION
CONCLUSION
Process for Communication Transfer
Communication fragmentation causes
•Knowledge blind spots
•Knowledge Mismatches
•Knowledge Jail
Mitigation Approaches
•Identify and select process information
•Plan how information is collected
•Document information transfer
•Translate into useful applications (e.g.: Framework)
•Reinforcement (e.g.: transition teams)
Formalized process changes reduces employees uncertainty
INTRODUCTION
IDENTITY
CULTURE
MOTIVATION
Conclusion
Culture/
Identity
Communicate
Motivate
Process
COMMUNICATION
CONCLUSION