Using Mergers and Acquisitions to Create Culture

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I have managed several mergers and acquisition activities in my career, and what I have noticed the most is the disconnect between the process and costs and the people and culture. Most often, in the hub of number crunching and legal anxieties, the people aspect of a merger or acquisition gets lost and along with it the talent and the potential for strong cultural development.
While a merger or acquisition is the coming together of two organizations, it is predominantly the merger of two different cultures. To come out of this transformation successfully, companies must apply a people strategy as part of the overall merger and acquisition objectives.

The HR aspect of a merger or acquisition is key to managing the transformation. It is about integrating people into the business strategy. Organizations must define and initiate the end result. By this I mean, assessing leadership, determining what talent is needed to be successful on a go forward basis, identifying how they will recognize and capture that talent, determining which, if either, of the current cultures support the long-term business objectives, establishing where and how to build on the positive enforcers that are already in place, and capitalizing on the power of effective communication.

Much of my focus in the past has been on the HR employee benefits aspect of M&A activity. This is where it gets personal for the employees impacted by the transition. While much thought is typically given to the compliance and legalities of benefits administration during a merger or acquisition, the power of an effective employee benefits integration relies on consideration being given to the human capital element and the business and people strategy. The employee benefits package, at the very least, impacts the employees’ compensation, the employees’ engagement and moral, the employees’ health and financial well-being, and the employees’ families. Incorporating these relative concerns first and foremost into a detailed evaluation process, the communication strategy, and in conjunction with the cultural assessment and alignment, creates opportunity and the ability to effectively support the defined end result.

Of course, it goes without saying that employee benefit plans are often looked at as a financial hardship and a compliance nightmare, but a necessary evil, especially during M&A activity. While that is a conversation most would have, it is imperative that during the conversion process, that organizations seize the opportunity to begin to include the restructuring of these programs into their HR talent strategy and overall business operations. Removing the singular focus of the costs of employee benefit plans as a line item in the budget, creates an awareness that money spent on employee benefit programs averts money that would be spent on lost talent, a disruptive integration, and an unachievable human capital success story.

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