Acquisitions Fail for This Main Reason, Here’s How HR Can Help
When two companies come together, there are seemingly endless details that must be considered to integrate the activities of the organizations. Merger and acquisition (M&A) negotiations take careful planning and input from every level and department within each organization. At Rocket, we’ve been busy welcoming the ASG team into our Rocket family, and we’ve been intentional with each step to have a successful merger of the two communities.
The truth is, organizations can do all the negotiating and number crunching in the board rooms, but at the end of the day, a successful M&A is about one thing – people working together. To enable effective collaboration, companies must keep people’s needs at the forefront of M&A strategy, whether it be employees, stakeholders or customers. That’s where HR practitioners can help. Putting people first is what we do, and strong HR initiatives during the M&A process can help avoid unnecessary friction, confusion and lack of unity as people learn how to work together in new environments.
Here are Three HR Best Practices to Overcome M&A Obstacles
- Align on Mission
There’s so much to coordinate during an M&A, between important details like relocation to questions of rebranding. While many organizations may want to dive right into administrative processes, placing an overemphasis on these concerns is a mistake. The focus of a merger should not be on company logistics, but rather on company culture.
This means the two entities need to first align on a shared mission that is driven by values and then work to build collaborative processes throughout the M&A journey. When leaders clarify these core values and messages, they can create a purpose-driven organization where people understand what they are working towards and feel a sense of belonging. Too much attention on administrative details too early on can result in core values becoming afterthoughts when they need to be the foundation.
HR teams’ role in this process is to connect the needs of leadership and those of the larger employee community to build a roadmap for a strong company culture. This means facilitating conversations with employees about what it means to work at their company and listening to stakeholder input. If employees share that they prioritize creativity, imagination and passion, how can those be built into the company culture? How does that fit with the other partner in the merger?
There needs to be discussion early and often during the M&A process to ensure there is a strong, shared vision for the company that employees can rely on to guide their daily activities. Impactful, productive work is difficult to accomplish in an environment where employees don’t understand their purpose. The administrative details will follow once everyone involved has a solid foundation to work from.
- Integrate Employee Initiatives
Another critical role HR departments play during an M&A is integrating employee initiatives from each organization. It is important that programs such as mentorship communities, DEI strategies or mental health awareness campaigns are not siloed as that may hinder the path to a unified company culture. Employees that participate in these programs benefit from connecting with each other to find commonalities, support each other and build relationships that strengthen the workplace.
For example, if one company has established hobby communities such as hiking or book club, how can HR work to raise awareness of those communities across the organizations as they come together to promote inclusion? Or maybe one entity has built a community of working mothers and the other has one for women of color, how can these groups work together to support different layers of employee identity and still remain distinct?
Planning and strategizing for the future of company initiatives helps employees feel secure that the relationships they’ve built as a result of these initiatives will continue to be supported after the M&A transition. These programs are important to the employee experience and are valued benefits of a workplace. Neglecting to consider how M&A will impact their structure can damage employees’ sense of belonging at an organization.
HR teams should solicit input from employee participants to plan the future of these programs and find the most collaborative and inclusive way forward. This may mean consolidating some under a single umbrella (like Rocket has done with Women Leaders in Tech joining Rocket Inclusion, Diversity and Equity) and ensuring that employees know how to take advantage of programs that are new to them.
- Communicate, Communicate, Communicate
As with any change that goes on in an organization, communication is key. Challenges are bound to arise if there is confusion between the two entities, or within teams and departments. HR professionals should establish consistent and reliable communication processes to circulate up-to-date information throughout the company. This could come in the form of weekly company-wide emails, Slack channels, intranet networks or any other platforms employees and stakeholders use.
Communications should come from a trusted authority within the organization, and there should be an avenue for employees to respond and provide feedback. Successful communication during an M&A – and more broadly – should be reciprocal. Employees need a way to share their input so that they feel their voice is heard and so that leadership can address any concerns.
Unfortunately, during many M&As, communication is siloed with the intention of avoiding confusion while strategies and procedures are established. The thinking behind this strategy is often that information should be shared only once it’s completely solidified, that way employees will feel confident in their leadership’s direction. But as HR practitioners know, this can lead to more confusion. Mergers can cause employees to question their job security, their changing roles and their new environment. The best way to alleviate these concerns is by sharing information as it becomes available as much as possible so that everyone is kept informed.
Always Put People First
Companies are made up of people, each with their own unique perspectives and roles. While it’s easy for sweeping changes like M&As to become removed from this reality, HR departments play an important role in amplifying the voice of employees and other stakeholders. By continuing to advocate for putting people first, HR professionals can contribute to an M&A’s success and help build a unified organization that is even stronger.