So, the boss just told you that your company has entered into an agreement to buy another company. The transaction is expected to close in 60 days, and you need to prepare to bring all the people onto your systems and programs.
First, take a steadying step back and a long, deep breath. Avoid the urge to begin “doing things” just for the sake of doing them, despite the pressure you might be feeling from corporate development or operational leadership. They will thank you in the end.
Next, think about your communication plan. Just as you cannot un-ring a bell, it’s impossible to take back what you say in the crucial early days of integration and incredibly difficult to fix any misdirected actions. Rushing in could cause missteps that will affect your credibility and make a successful transition more challenging.
Unfortunately this scenario plays out far too often in corporate transactions — and it can affect all levels of HR, from the business partner all the way up to the CHRO. However, there are steps you can take to help ensure a smooth business integration process.
Consider these four:
- Ensure you understand your company’s overall deal strategy and goals. Why did your leadership feel this transaction was important, and what was the primary driver for making the acquisition? Was it for growth, market share, technology, talent? Understanding what your leadership valued in the acquired company and the key goals of the transaction will help inform your decisions as you consider which elements to retain as you develop your integration plan.
- Develop an initial hypothesis on what the end state will look like. Will the acquired be kept as a separate operating group within the company, or be melded into an existing group once the integration is complete? You should have this end-state vision top of mind so you know what you’re working toward. However, it’s only a hypothesis at this stage. As you learn more, you might consider changing the plan.
- Learn all you can about the company being acquired. Who are their leaders and how long have they been in place? How are decisions made? What type of culture do they have, and do they thrive in it? There are many sources for this information (due diligence pre-deal material, online company overviews, etc.), but the best might very well be to speak with experts within your own ranks. Do you have any current associates who used to work at the acquired company? These people can lend valuable (non-confidential), first-hand knowledge well beyond simple Internet search results.
- Identify any commitments that will affect employees and your ability to move forward. Make sure you review all the sections in the purchase agreement — not just the “Employee Matters” section. There could be other parts of the agreement that impact HR, such as Conduct before Close, Buyer Covenants or Transitional Services Agreements. Knowledge of these commitments will be critical to planning and executing a successful integration. You may have a specific timeline or certain levels of service or benefits that were agreed upon by the deal team, so understanding these early in the business integration process will prevent you from failing to live up to your obligations.
Even with evidence that early HR involvement increases the potential for success in a transaction, many companies are so concerned about confidentiality they wait too long before bringing the HR team “under the tent.” That makes it tough to do your job in a condensed timeframe, but if you’re faced with this scenario don’t be tempted to rush in before you fully understand these four critical items. Understanding these central points will enable you to begin with a solid, directed plan and put you on the right path to deliver a successful integration — plus, increase the likelihood that you’ll be invited to the deal table earlier next time.