When an acquisition closes, there is often a sense of achievement. Months of negotiations, due diligence and planning have culminated in a completed transaction.
But the deal closing is not the end of the process. In many ways, it is where the most important work begins.
The first 100 days following an acquisition can set the tone for the entire integration. Employees are looking for answers, leaders are establishing new ways of working and organizations are attempting to capture the value that justified the deal in the first place.
The question for HR is therefore not simply “What do we need to integrate?” but “What do our people need in order for this integration to succeed?”
Start with People, Not Processes
There is inevitably a long list of practical priorities after a deal closes: systems, structures, policies, reporting lines and technology. These are important, but they should not overshadow the human side of the transition.
WTW’s M&A Barometer found that 78% of respondents identified key talent below the executive level with unique or specialized skills as their highest due diligence priority. Retention of non-executive talent was also identified as the leading measure of integration success by 50% of respondents.
That effectively tells us that the people who create value are not necessarily sitting in the executive suite.
HR should therefore identify critical talent early and understand what might cause those individuals to leave. That could mean uncertainty about their role, concerns about culture, compensation changes or simply a lack of communication about what comes next.
Giving People Clarity
Few things create more anxiety during an acquisition than uncertainty.
Employees want to know: Will my role change? Who will I report to? Will my compensation change? What does the new organization expect from me? What happens to my career?
Not every question can be answered immediately. However, there is a significant difference between saying “We don’t know yet” and saying “We don’t know yet, but here is what we are doing and when we expect to have an answer.”
A credible communication strategy is therefore essential. Employees do not need leaders to pretend that everything is certain, but they do need honesty, consistency and a clear sense of direction.
Align the Leadership Team
The first 100 days also provide an important opportunity to establish how the combined organization will be led.
Leaders need to understand the rationale behind the transaction, the organization’s priorities and the behaviors expected of them. They must also present a consistent message to their teams.
This is one area where HR can play a strategic role. Rather than simply communicating decisions made elsewhere, HR can help leaders prepare for difficult conversations and develop the capabilities required to lead through change.
McKinsey’s research emphasizes the importance of developing leaders specifically for the challenges of merger integration, including aligning the top team, defining the new organization’s direction and building the capabilities required to lead the combined business.
Don’t Try to Change Everything at Once!
A successful integration does not require every process, practice and cultural norm to change immediately. In fact, some of the things that made the acquired organization successful may be precisely what the acquirer wants to preserve.
The first 100 days should therefore be about establishing priorities; what must change, what should be protected and what can wait.
That creates a more manageable transition and helps employees see that integration is not about erasing one organization and replacing it with another, but about creating something stronger.
Use the First 100 Days to Build Confidence
The best integrations recognize that people are not an obstacle to value creation. In fact, they are one of its greatest sources.
PwC’s M&A research found that successful integrations invest earlier in change management and talent retention, with effective programs spanning leadership, communication, culture, organization, incentives and employee onboarding.
The first 100 days are therefore an opportunity to build confidence, retain critical talent and create a shared sense of purpose. The deal may be done, but the real opportunity to turn two organizations into one that is more capable, more resilient and better positioned for growth is only just beginning.
If you would like to discuss the fractional support we can offer in ensuring your merger is smooth and efficient, please get in touch with us today!
