We’ve all heard the phrase 'our people are our greatest asset', yet it seems to represent business about as well as an episode of The Apprentice. After all, where are all the front-facing staff when the City wrangles over a company’s performance? Why do all the financial deals we ever read about seem to revolve around headcount and cost savings? These are the questions Andrew Shapiro, executive consultant of The Forum Corporation addresses.
"Believe it or not, it really is the people that matter. Thus concludes some global research we recently carried out at The Forum Corporation, a global consulting leadership development firm, which looked at how companies grow – either organically, through alliances, or through the more juicy merger and acquisition (M&A) route...
We found that those companies that have actually gone through a merger or acquisition believe retaining key staff is the biggest challenge. While that might sound unsurprising to HR folk – after all, who likes change? – it strikes quite a curious note when you think about the way business tends to talk about the marriage of two organisations. It’s always about the financial value.
Yet our research found the most successful companies at M&A demonstrated the greatest ability when it came to 'the people issues'. It was those firms who engaged staff instead of relying on old-fashioned hierarchy who succeeded.
The crème de la crème of M&A were also far better at bridging the differences in the two organisations’ styles and values. (Note to ed: don’t ever accuse HR of not being strategic).
This has huge implications and not only for how businesses should perceive their own value. It highlights just how important it is to make sure you have good leadership in place if your company is looking to grow, particularly for something like M&A where you run the risk of a clash of cultures and key talent leaving.
So what can you do to get the leadership right and retain key talent in your business?
- Don’t assume there’s only good leadership and bad leadership. Our research found that it took very different types of leadership to successfully navigate M&A growth, organic growth and key business alliances. Just because your star member of staff does brilliantly at one type of growth project, doesn’t mean they will be able to adapt easily to another.
- Prepare your leaders properly. Two-thirds of those we surveyed didn’t think they had been sufficiently coached and trained by their senior management to lead change.
- Support those who will influence key decisions and the culture of the organisation.
- Think twice. There’s a reason why so much M&A fails and why organic growth is the less glamorous, 'unsung hero' for organisations trying to grow. It’s easier to train and get the buy-in of staff you know, so M&A has to make an awful lot of sense on paper to make it really worth it. A little spare cash and a wild commercial union will only end in heartbreak.
Personnel Today case study features:
HR in practice: How household detergent manufacturer Henkel handled its acquisition of Sellotape
When Henkel - home of household detergents - acquired Sellotape, things could have been a bit sticky or spun out of control. But the HR team made sure former Sellotape staff were happy to stick with their new employer.
Career coach: Merging workforces
I am the managing director of an organisation with around 600 staff and have recently bought out a smaller company of around 50. While both companies are successful and results-driven, they have significantly different cultures.How can I ensure the transition is as seamless as possible, combining the best of both cultures, without losing talented employees or causing anyone to become alienated or de-motivated?
Struggle to combine corporate structures limits benefit of most mergers, research shows
More than 90% of corporate mergers and acquisitions are falling short of their objectives, as companies struggle to combine corporate cultures and structures, a study has found.
