The HR Juggler

Integrating Acquisitions: HR & Business

Posted on: February 24, 2011

One of the things I enjoy most about my role is the opportunity to work alongside senior, talented business people and gain an insight into how they work. I am fortunate to have been involved in a number of acquisitions in recent years and am always fascinated to see patterns in some of the steps that are taken to support and nurture the new businesses and how HR can impact this activity.

The business leaders whom I support and work with do the following things and execute them really well –

1) Communicate – what is the business going to do and why? What is the plan and how can people influence it?  Establish good channels of communication and open and transparent communication, both in groups and one-to-one meetings.

2) Focus on profit. Not revenue, not potential for growth but real, true profit on a granular level.  Without fail, this is the first step I see business managers make, to bring financial discipline to the accounts, so that senior management and the whole team can understand what activity and products are truly profitable. Once this has been established, these figures are shared on a transparent basis, so that all employees can gain clear sight of how their products add to the bottom line.  This then feeds into business decisions around stopping product, concentrating effort where it matters, consolidating output and targeting investment.

3) Invest. Whether this is in systems, resources such as sales or marketing, premises or training, investment is a key focus for any acquisitions we make

4) Integrate. Both in shared services or the back office support functions, and also in front office products and services, where it makes sense to leverage opportunity and scale.

5) Harmonise benefits (upwards not downwards!). Benchmarking of salaries, review of existing benefits and a commitment to bring the level of benefits to the same as the acquiring company, helps to create a culture of fairness and trust.

6) Empower the management team. Ensure that the right, talented people are in the right jobs, that they can lead and be empowered with true accountability.

7) Processes and policy. Neither for its own sake, but giving people clear parameters of what is expected and what level of authority they have and are expected to utilise.

8) Simplify. Some things just become way too complicated. The more quickly you make things straightforward and transparent, the more quickly people will be able to deliver.

It’s a privilege to be involved in these discussions and see first-hand the impact that can be had on newly acquired businesses.  I’d love to know about your experiences too!

4 Responses to "Integrating Acquisitions: HR & Business"

[…] This post was mentioned on Twitter by Ailsa and Alison Chisnell, Peter Hros. Peter Hros said: @alisonchisnell @BettyBBlonde Stop fighting girls here it is […]

Great post, Alison.

The conventional wisdom is that most acquisitions fail to produce the expected business benefits, at least in the short term, and the nicely vague ‘culture’ word usually gets the blame. I’m interested that ‘ensure the right people are in the right jobs’ sounds like a metaphor for ‘sack some senior people’ with all that means for those that remain. This is a feature of every acquisition project that I’ve been involved in and cuts both ways in getting the acquirer to where they want to go. It also represents the first test for the ‘communications’ measure which, in my experience, is the ‘big deal’ for making these things work.

I was once told that ‘ambiguous communications are the biggest single obstacle to successful change management and communications are always ambiguous at times of change’. I’ve been struggling to solve that conundrum one way or another for most of my career.

Thanks for commenting, Kevin. It’s interesting to hear about different perspectives – I suspected when writing this that my company is probably a bit atypical in that we are quite acquisitive and are relaxed about having lots of pockets of different cultures, as we have many brands rather than one.

Funnily enough I didn’t mean ‘ensuring the right people are in the right jobs’ as a euphemism for sacking people. With the exception of proprietor types, who understandably don’t want to stay on, most other staff of acquisitions generally tend to in my company. What I meant was more skills-based – if an individual has been running a team but with no real accountability for P&L, then if they are given that responsibility, they won’t always have the ability to manage. We may just have been lucky to find that most of these individuals have had huge strengths in content or business development and have shifted them to these roles, or moved them to report into an MD who can coach them on developing those skills.

I don’t know the answer to your last point, but it certainly makes for interesting pondering! We shall have to chat more over the next cup of tea ;).

Hello Alison, nice to read something about growth, not a lot of it about lately.

Do you have any specific examples of communication method that have worked well at and beyond the point of integration? I ask this because one of the last projects I was asked to lead in BT was a reintegration of some 250 staff who we had TUPEd into the business some 2 years earlier. Their previous employer – our customer – had been onto the chief operations officer and told him what a shambles this team had become. Their were threats made – sort this lot out or we’ll retender the business (a £30m pa service contract). Our COO called me “you understand this people stuff – I need you to sort this out”. Gee thanks.

First thing I did was look back at any (precious little) documentation from the tie of arrival. I found some survey stuff which indicated optimism about the future. I then arranged to go and visit the team at their various places of work. This process started slowly – the first session was polite and though we learned a few things from the team directly (one of which was “we’ve been here 2 years and you lot still haven’t finalised and told us our working terms and conditions”.) the other thing I learned was this team were reluctant tot speak up in front of other management. So we arranged for the remaining sessions to be held without any current management in attendance.

The sessions grew in size and I began to learn just how frustrated this team were. As more and more of them spoke up what became clear was we had pretty much abandoned this team to learn to survive in a new environment. No heed was given to the fact that we may need to communicate differently with this group (at least while they were finding their feet). They didn’t understand the systems within which they were now working – they became detached and their productivity and esteem were shot. At one session in Rotherham I was so overcome by just how fed up, down and angry this lot were I was reduced to tears. I was ashamed of my employer. And I was amazed at how detached and impotent such a seemingly capable group had become.

We made some agreements. I took on the responsibility for harmonising their benefits (I love your term Alison) within two weeks. I gave them some basic tools so they could create an online space to work and share together. I canned all their old technology (it turned out a number of them were still using old laptops and email addresses from their previous lives). In return they agreed to work within the new technology “rules” and evaluate their current work processes to look for improvements (this was something they had actively been encouraged to do in their previous place of work).

So I went and sat on some of my HR colleagues and forced the benefits issue. I’m embarrassed to say that three changes in HR management over the two years had failed to sort this matter out. It was put in the too tricky box through a perceived fear of how some people would react to changes in their benefits. Of course what was bothering folk was the uncertainty more than changes themselves. The benefits were agreed and publicised within the two weeks (I just nagged folk into submission) and over the coming weeks a couple of people did move on as a result. 2 out of 250.

More inspiring was the manner in which the team set about finding problems and blockages in their workflow and made biiiig strides in service improvement (and shifted the focus from revenue to profitable growth) as a result. Happier customer and happier staff.

I left BT not too long after this project (I think in part it hastened my departure) so I don’t know the longer term outcomes. But the absence of any thought or adaptability around communication caused the 250, and their customer, and BT a huge amount of unnecessary grief.

Sorry for going on so long, I feel a little like your article has prompted a therapy session for me!

Cheers – Doug

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