Professional Documents
Culture Documents
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Subjec t:
2/19/12
We know that people issues are so critical but still they are neglected. The possible reasons include: The belief that they are too soft, and, therefore, hard to manage Lack of awareness or consensus that people issues are critical No spokesperson to articulate these issues No model or framework that can serve as a tool to systematically understand and manage the people issues; and therefore 2/19/12
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Stage 1: Pre-Combination
HR Issues Identifying reasons for M&A Forming M&A team Searching for potential partners Selecting a partner Planning for managing the process of M and/or A Planning to learn from the process
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Stage 1: Pre-Combination
HR Implications and Actions Knowledge and understanding need to be disseminated Leadership needs to be in place Composition of team impacts success Systematic and extensive pre-selection and selection are essential Conducting through due diligence of all areas is vital
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Cultural assessment
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Sensitive to cultural differences Open-minded Flexible Able to recognize the relative strengths and weaknesses of both companies Committed to retaining key employees
Able to filter out distractions and focus on integrating key business drivers2/19/12 as R&D such
Stage 3: Solidification and Assessment of the New HR Implications and Actions Entity
Creating and evaluating a new structure Melding two cultures needs assessment revision
The concerns of all stakeholders need to be addressed and satisfied The new entity must learn
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Contd
Change and knowledge management competencies Consulting and communicating Group process facilitation Designing and working in flexible structure Partnering and parenting Negotiating Network building HR alignment Managing leader transfer
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M&A Phases
Pre-combination
Step 1: Pre-Deal
HR is on the M/A Deal Team Each step is a new level of commitment towards the deal and requires more information and analyses
Pre-Deal: Identify the strategy driving the M/A, locate and select targets, determine potential business opportunity, define critical success factors, and notify target of intent HRs role: educate team on HR implications, conduct high-level analysis of people, org, & culture fit based on available information, identify people-related issues, plan for due diligence Due Diligence: collect and analyze information from the target, assess leadership team, summarize findings, issues, and risks, and make go/no go decision HRs role: collect and analyze HR related information, identify issues, risks, costs, savings Integration Planning: set deal terms, use information previously collected to create plans to combine companies with minimal business interruptions, close the deal HRs role: secure key talent from target, collect more information where necessary, create
Step 3: Step 4: Step 5: Step 2: Integratio Implementatio Post-Deal Due n n Diligence Planning
M&A Phases
Post-Combination
Step 1: Pre-Deal
Step 3: Step 4: Step 5: Step 2: Integratio Implementatio Post-Deal Due n n Diligence Planning
HR is a member of the Deal Evaluation Team Deal Team evaluates the successful capture of synergies and achievement of original strategy HRs role
Capture lessons learned from the management of the project Evaluate organization, people, processes, systems (e.g., 24th month audit) Suggest process improvements Align with Business Strategy of the Future Learn from this deal to be ready for the next deal Ongoing involvement in integration of culture
Sample Tools
Defining the End State
high Absorption
Acquired company conforms to acquirer
Transformation
Both companies find new ways to operate
Best of Both
Additive from both sides
Preservation low
Acquired company remains independent
Reverse Merger
Unusual case of acquired firm leadership
low
high
Sample Tools
What to Look for in Due Diligence
What to get
Census info Benefits plans (e.g., Defined contribution, Defined benefit, Health & Wellness benefits, Disability) Compensation plans (including exec plans, stock, severance) Employment agreements Union Contracts Org Structure (e.g., org design, headcount, mgmt layers, centralized/decentralized, staff/line ratios) HR Compliance risks Pending employment lawsuits Turnover
Open requisitions
Assets Liabilities and expenses Potential cost savings Potential synergies Substantiation of financial records Organization fit Cultural norms and values Technology HR capabilities HR fit Depth of management talent Talent Retention Motives and mindset of management team Labor relations issues Integration risk Fit with business case and integration strategy
Employee attitude surveys Performance reviews Succession plans HR metrics & systems (e.g., HRIS, Diversity, Staffing) Company communications Policy manuals and employee handbooks Organization Charts
Published reports and news stories Exes or employees who have left Customers and suppliers Researchers, recruiters, retirees and other 3rd parties
Sample Tools
HR Due Diligence Information Request
Sample Tools
HR Due Diligence Assessment
Sample Tools
HR Due Diligence Summary Report
Thank you.
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