Ginger Shelhimer, Head of M&A for Global Talent Acquisition at Ericsson, offered tips to help human resources professionals avoid costly, time-intensive M&A mistakes during her keynote presentation to Argyle's CHRO membership at the 2017 Human Capital Leadership Forum in Dallas on December 6. In her presentation, "How to Avoid Being the Next M&A Horror Story," Shelhimer examined common HR problems that follow deals and provided recommendations to avoid such issues.
According to Shelhimer, a merger or acquisition can create major headaches for an organization. Fortunately, HR professionals who know how to prepare for a deal can allocate the necessary time and resources to plan accordingly.
On the other hand, failure to understand the impact of a deal can have far-flung effects on an organization. If HR professionals struggle to seamlessly navigate a deal, these professionals could put an organization, its brand reputation and its revenues in danger.
"The higher the stakes, the bigger the headline," Shelhimer stated. "M&A transactions are impactful in terms of financials, organizations and people."
Deals drive the global marketplace, and they show no signs of slowing down any time soon. Thus, HR professionals must take steps to prepare for deals, or these professionals may put their respective organizations at risk.
"How you treat your people is fundamentally imperative for the success of your company. And that's no different with acquisition deals."
"M&A is becoming more of the reality for organizations, especially for HR," Shelhimer said. "There is drive for more deals and growth in the market … and this leads to more problems for HR."
With the right approach to M&A, HR professionals can streamline the process of integrating one organization's workforce and its culture into another's. In addition, these professionals may be able to help their respective organizations win the war for talent.
Shelhimer said, "Everybody is in a war for talent ... How you treat your people is fundamentally imperative for the success of your company. And that's no different with acquisition deals."
Ultimately, Shelhimer indicated there are five challenges that HR professionals face relative to M&A:
1. Transition vs. Transaction Mindset
A merger or acquisition often represents a major endeavor for an organization. Yet with a people-centric approach, HR professionals can help alleviate stress for all parties involved.
"You have to train your leaders on how to message and connect with people that come into your organization."
HR professionals who focus on helping employees understand what to expect before, during and after a deal can reduce the risk of unforeseen problems at this time. Plus, HR professionals can bridge the gap between new and veteran employees and ensure all parties can work together to achieve common goals.
"There are a lot of organizations that view an acquisition as a big task," Shelhimer indicated. "What you need to do is adopt a transition mindset … that is a people-focused viewpoint."
2. Challenges in the 3C's
Shelhimer noted there are 3C's that create challenges with M&A:
- Communication: "You have to have a comprehensive plan [for communication], and the planning has to start really early," Shelhimer said. "You have to train your leaders on how to message and connect with people that come into your organization."
- Culture: "Culture is complex," Shelhimer said. "It's not owned by HR … and you have to have a clear strategy and vision [for culture]."
- Change: HR professionals should help employees answer the question "What's in it for me?" That way, employees can understand exactly how a merger or acquisition will impact their day-to-day activities.
By prioritizing the 3C's, HR professionals can maintain transparency throughout the M&A process. As a result, HR professionals can provide employees with the support they need throughout this cycle.
3. Insufficient HR Structure/Support
Training programs must be established that enable HR professionals to help employees understand their roles following a merger or acquisition. These programs will outline processes and protocols for HR professionals to follow relative to M&A, and as such, can help these professionals achieve the best-possible results.
"Everybody that you're calling on to support your project has a day job," Shelhimer stated. "You need to invest in education and training to ensure your HR teams are ready for the challenges that will come at them."
4. Due Diligence That Goes Beyond Liabilities
Due diligence can play a key part in a successful merger or acquisition. If HR professionals engage with their target audiences and establish strong relationships with them, these professionals can limit risk.
Also, HR professionals should take a step-by-step approach to integration. This approach will enable HR professionals to keep employees up to date throughout the integration cycle and ensure these workers are fully supported at all times.
5. Inconsistent Processes
Established processes and performers positions an organization to succeed. If HR professionals track post-deal synergies and performance, they may discover innovative ways to help an organization achieve its immediate and long-term goals.
Lastly, organizations that best manage the people issues up front and early in an M&A transaction maximize their opportunities for success. These organizations may be better equipped to realize their strategic objectives and drive the ultimate value from deals as well.
Ginger Shelhimer is Head of Mergers & Acquisitions for HR, Talent Acquisition at Ericsson. Her experience includes leading hundreds of organizations and thousands of individuals in navigating personal and business change. Throughout her twenty year career in consulting and Human Resources, she has led acquisition, merger and outsourcing deals and teams at companies ranging from “A to X” (Alcatel to Xerox). Ginger holds a Master’s degree in Counseling, degrees in Business Management and Marketing, and is a Licensed Professional Counselor, Senior Professional in HR and a published author, speaker and executive coach.