The Human Factor of Mergers & AcquisitionsHOW TO RETAIN TOP PERFORMERS

POST-INTEGRATION

Andrew Partheniou | Jimmy Song | Simon Foucher | Stefanie Perrone

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Current State

70% M&As fail to deliver on targets• Business focus on Financial• OB Focus on People

M&As are disruptive life events • Lost of identity• Culture clash• Uncertainty / Stress

Need to consider the “Human Factor” in M&As

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Key Success Factors

Human factors are critical to ensure retention of key people

Identity Culture Motivation Process

COMMUNICATION

Identity

Who am I in this new Organization?

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Identity

Identity

Social

Circles

Family

Work Place

Work organization play a crucial role in shaping identity

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

4 Approaches to post-merger Identity

Assimilation Confederation

Federation Metamorphosis

Excpet for federation, all outcomes imply changes

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Assimilation & Metamorphosis: cope with new identity

Build Trust

Justice

Sell Benefits

Stability

Goal: Reduction of insecurity and stress for individuals

Culture

Understand Norms and Expectation

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Culture Integration – OverviewHow to Merge Culture

Successful culture integration reduces chances of failure

Pre-Merger

Planning

Implementing

Reviewing

What is Culture?• Shared Meaning• Understand Norms and

ExpectationsWhy is it Important?• Conflict Avoidance• Aligns Expectation

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Stage 1 – Pre Merger

Innovation

Relationships

Autonomy

Performance / Reward

Risk

Key to success is to clearly identify culture differance

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Stage 2 - Planning

Object

• What dimension to integrate

Goal

• Clarify

Method

• Which ones

• Time Table

Budget

• Training• Other

items

A day invested in planning saves a week of issues in implementation

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Stage 3 - Implementation

Create atmosphere of integrationClarify NormsBuild TrustCommunicatePrepare for ConflictEquity

Many tools to chose from to integrate culture

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Stage 4 – Review Stage

• Results Vs. ExpectedFind Difference

• Document findingsExplain Difference

• Revise technique• Apply at next merger

Take action

Continuously improve integration performance

Motivation

Individual View of Retention

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Identify Top Executives

Only invest in keeping key executives

• High Salary• High corporate

ROA• Companies of

comparable size

Executives

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Top guns at the Non-Executive Level

Combination of 2 our of 3 MethodsDocume

nt & Data

Approach

SurveysSocial

Network Mapping

Target the right individuals

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Intrinsic Retention Programs

Executives

• Promotion Possibilities

• Power shift from shareholders to managers

• Parent CEO controls high share volume

Workforce

• Address job security concerns

Maintain intrinsic motivation

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Extrinsic Retention Programs

Avoid going down Maslow’s needs hierarchy

Communication &Process

Ensure Reality Matches the Theory

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Organizational Citizenship Behaviour

Communication satisfaction is positively and significantly related to OCB

Increase perceptions of

OCB Dimensions

Increase OB through effective

communication

Increase Employee Happiness

(Satisfaction)

Increase employee loyalty and retention

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

The Communication Triad

Communication and trust increases organizational commitment

Communication

Organizational

CommitmentTrust

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Formal and Informal Communication

Reinforce leadership credibility and forge trust

Strategize

• Strategize and prepare a formal communication plan

Truth

• Use a truthful approach at all times• Remain consistent

Timing

• Implement frequent communications• Over-communicate

Reinforce

• Manage Change• Use “Transition Teams”

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Process for Communication Transfer

• Knowledge blind spots• Knowledge Mismatches• Knowledge Jail

Communication fragmentation causes

• Identify and select process information• Plan how information is collected• Document information transfer• Translate into useful applications (e.g.: Framework)• Reinforcement (e.g.: transition teams)

Mitigation Approaches

Formalized process changes reduces employees uncertainty

INTRODUCTION IDENTITY CULTURE MOTIVATION COMMUNICATION CONCLUSION

Conclusion

Culture/Identity

Motivate

Communicate

Process