Mergers & Acquisitions
5 primary people obstacles you’ll encounter in your M&A deal and how to avoid them.
Mitigate merger risks with effective change management to ensure seamless integration.
The challenges you will face in the process of integrating the workforce in both entities are many and complex. While you would expect your merger to bring about the desired growth, a majority falls short of their goals and objectives. While some failures can be explained by financial and market factors; a substantial number can be traced to mismanaged human resource (HR) people issues and processes.
People are key to making your merger work and it is the HR related challenges like cultural ignorance, leadership/management disputes, loss of key talent and the inability to manage change, which are the basic reasons why your merger may fail to deliver the desired results.
Top 5 M&A obstacles to overcome
The top 5 obstacles to achieving success in your merger or acquisition are:
- Incompatible cultures
- To sustain financial performance
- Loss of key talent and a clash of management styles
- An inability to manage/implement change
- Objectives/synergies not fully understood
These obstacles are either directly or indirectly related to the management of your people and those cultural differences between companies may be the single barrier to your success.
In most M&A deals, people integration factors are afforded little consideration at the pre-deal stage, which goes a long way to explaining why people, organisation and culture issues tend to get overlooked, often the members of the deal team have no skills to assess the HR soft issues that are so critical for integration.
A merger has a profound effect on the people of both companies and managing this impact is an important part of managing a successful transition to a unified leadership, business model and organisation. By recognising and responding appropriately to the impact of the deal on each employee, you can set the tone for long-term success of your new company.
Key people factors for deal success
We draw upon extensive experience of supporting leaders and workforces during periods of mergers & acquisitions, internal change, restructuring and downsizing.
- Human Capital Due Diligence – We will advise on cultural change factors and support on cultural integration.
- Leadership – Helping you determine the skills required of leadership, align views and styles of the leadership teams involved in the deal, and support consistent messaging and communication.
- Culture – Helping you develop change management and communication strategies and align those activities with other work streams for a seamless transformation.
- Communication – Helping you create a communication and messaging framework to support employee engagement and maintain a focus on driving business performance.
- Talent – Helping you get the right people, with the right skills, into the right roles for both the short and long term.
- Career Management – Helping you by facilitating and supporting transition for staff at all levels into new roles, portfolio careers, self-employment and re-skilling for new careers.
