How to Proactively Get Ahead of People Challenges from an Acquisition

As we have previously written about some of the challenges of integrating two companies, I wanted to close this series with a focus on people. I had always received advice to be sure to get the “soft” things right around people during integrations. As much as we tried to focus there, inevitably issues would arise that needed to be quickly addressed. Here are three areas where you can be proactive to get ahead of some of the common challenges.

Identify and retain key talent

One of the main benefits of an acquisition is the talent you acquire from the business. This process begins in due diligence where you get a chance to interact with the team. It can quickly become apparent who the key influencers are, who gets things done, and who the team looks up to as leaders (hint - they sometimes are not the people with the highest titles!) Once those people are identified, ensure you get them on board with the acquisition rationale, their role in the new organization, and how they become a part of the decision making team. These people are key resources to bridge the cultures of the two organizations, and can provide hope to the acquired company that there are career advancement opportunities in the new company. One of the more difficult challenges is dealing with an executive who stays on the team, but quickly becomes disenchanted and spreads that negativity across the acquired company. Or alternatively, they do not buy in, and leave the company, prompting other key leaders to leave as well.  Retention bonuses and other comp packages can only help so much and also come with their own challenges.

One of the main benefits of an acquisition

the talent you acquire from the business

Address “Day 1” issues

I collectively call some of these basic HR/IT policies as “Day 1” issues. Individually, they can be problematic if not addressed. Collectively, they can sink the culture following an acquisition. Imagine how you would feel if you did not have access to the new HR system or health insurance immediately; your pay structure changes; your benefits are different and require a PhD to decipher; you have a hard time getting reimbursed for expenses; or your official title in the organization changes. Many of these things are addressed with simple pre-planning (spend the time to do it!). It also helps to have a clear “go-to” person to resolve the inevitable issues that will arise. It is beyond frustrating when you have an issue and do not know who to go to in the new company for resolution. Lastly, some issues (i.e. official titles) can be more complex. As an example, a small company with job title inflation may be moving to a larger company that has job title deflation. A current “VP” may drop to a “Director” or even “Sr. Manager” title. Even though this makes sense in the eyes of the big company, it is important to realize this does have an effect on people, especially if they cannot see a path back to their old title.

Develop clear communication strategy

Finally, a clear communication strategy is paramount. In the absence of information, people always assume the worst. To make matters worse, people could receive secondhand information (#fakenews) that is not accurate, but perpetuates rumors. Now imagine your product roadmap: the product team is operating under the belief a decision was made to prioritize product X. Meanwhile, the engineering team has not heard that information and still focuses on product Y. It is critical to lay out a formal process: who is involved in making decisions, what decisions are made, and how they are communicated to the team. People react much better when they understand the process when they have a central source (sharepoint, calls, meeting notes) as well as multiple distribution mediums that are consistent and support key decisions. There are many decisions made during integration, and you want your team aware, moving fast, and in the same direction. Spend the time to get buy-in and overly share the information at all levels.

People are often the most important asset acquired in an acquisition, so it is worth spending the time to get this part right!