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Merger and Acquisitions – What is right choice ?

Rajni Jain

HR Head

PCS Technology Ltd.

Merger and Acquisitions – What is right choice ?

When a company decides to merge with another or acquire another company, the idea is to form an entity that is bigger in terms of value, resources, expertise than the sum of the two individual companies.

The idea behind merging or acquiring with companies is to use synergies to create efficient processes. HR plays a pivotal role in tackling the most critical issues faced by both the organizations during the transition — managing the human resources, ensuring their buy-in in the process and preparing them to adapt to the change.

In order to ensure a successful integration, HR should be involved from the initial stages of discussion wherein it can focus on aligning the most crucial areas.

To begin with, there are few specifics that need to be looked into during the pre-merger/acquisition stage:

What business life-stage are both the companies at?
How different are the work-cultures at both the companies?
What is the acquire company’s way of working?
How profound is the company’s performance to those ways of working?
Are the processes & systems at both the companies complimentary or contrasting to each other?
Which talent is indispensable from the second company and how to utilise their potential in the renewed system structure?
How much time, effort and management investment will it take to coherent the newly combined organization?
How many functions/roles are duplicated, how to re-align & rationalize headcount
Post this due diligence, the companies needs to introspect & understand whether the difference in the processes, working methods, culture are reconcilable or not. If yes, then a framework needs to be worked out in the initial stage itself.

Here’s how HR can play an important role, when involved from the initial stages of integration:

1. Retaining the Right Set of Talent:

The uncertainty that the unison brings in can lead to the exit of the critical resources. Hence, HR from the very beginning should develop a strategy to identify & retain the right set of people. This could be done keeping in mind the below requisites:

Select employees on merit
Build your employees’ trust
Keep the formal communication channels open
Offer an employee retention arrangement
2. Integration in Compensation Structures:

HR’s efforts to integrate compensation strategies and practices are a key component of successful mergers and acquisitions. They need to carry out the vital actions by reviewing the compensation policies of both the companies & defining a structure which is practically implementable and workable for employees of both the companies.

3. Alignment of Performance Management Methodology:

It is a challenging task for HR to ensure that employees’ are consistently performing during the transition & to evaluate their performance on a regular basis. For this, a proper performance management strategy should be worked out during the pre-merger/acquisition stage itself ensuring a proper implementation of work during and post the transition.

4. Change Management:

Employees will resist the change that the merger/acquisition process will bring in – as there will be an uncertainty of the work structure post the change. Hence, HR together with the management should focus on change management during the transition. Few things that need to be looked into for the same:

Initiate the change management effort at the earliest possible stage
Createshared principles for the change management initiative for the involvedcompanies
Verify the change through every stage of the process
5. Integration of Cultures of Both the Companies:

Integrating Company Cultures Is the key to the success of an M&A. The ways in which you can successfully implement it is:

Communicate Early and Often
Examine Cultural Differences
Develop a Cultural Integration Plan
Embrace Change
6. Transparent Communication:

Assuring that a transparent & proactive communication process is followed. This will help fend off the informal channels of communication and will play an instrumental role in the pre, ongoing& post stages of the transition process.

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Curious- a HR habit!

Anita Simson

Manager – Human Resources

Towell Mattress & Furniture Industry

Curious- a HR habit!

Its a very much required habit, obligatory trait for a forward-thinking HRP. But…, a doubt arise- Does this sound like a positive or a negative trait?

Let’s perceive it from a diverse angle- Inquisitiveness- that’s how simple it is…but the world always find it as nosiness, prying or entering into someone else’ reserved zone. Stand beside me and take a 3600   look at the same. But… this time from a different angle… isn’t it right to show your interest on everything where you belong to? Isn’t it necessary? Yes… that’s it…. Showing your interest in all the  happenings, understanding the deep root cause of every single thing, meddling to get things right and to the next level and obviously questioning yourself and others around for betterment of the situation … is Curiosity.

Curiosity-…nonetheless is the interest for getting yourself involved in every single thing happening around or being just far-sighted. The word ‘interest’ may generate positivity…. But here, by only spreading positivity without knowing the depth doesn’t help you… The word- ‘curiosity’ has it all in every sense.

A HR professional has to be curious… should be acting as a sniffer, as many a’ things are to be sniffed out, as these doesn’t happen with an announcement. A HRP, to act as a strategic partner should be sniffing around to discover, to understand and analyze the surroundings and to see whether the things are moving in the right direction. You need to be involved in everything- right from knowing your people, product, process, industry, competitors, market trend, statutory changes, economy, global scenario, etc. etc.

Start from knowing your people- what brought them in, what keeps them in and also what gets them out when they walk off. These kind of tapping will sure shot keep you alert and act well before any awkward scenario arise. Lend your eyes to notice the happenings to avoid blind assumptions, lend your ears to what’s ringing around, b’coz this time everything will not be mere music to your ears! Need to be attentive, need to develop a detailing censoring persona- as lots of stuffs are rumored in the corridors, water/coffee corners and even at the work desk. Watch it considerately for  motivating, correcting and improving and of course- NOT with a policing eye.

Things doesn’t happen all of a sudden… understand this element. It’s You– who  didn’t notice it anytime, rather found it ONLY when the damage has already been made. So, wake-up and smell the coffee in time… so that… the entire day is yours!

Activate the sixth sense of sensing stuffs around- some may find you intriguing and some may find you interfering and also some may find you irritating… Doesn’t  matter- Finally, you are not here to please everyone, make everyone happy. You are not here to be liked or loved. Your role has to be commended. And that happens only by providing a quality job. Know your job, your role and act wisely. This is something I learnt from my current boss. That’s why I say that you learn everything in bits and pieces from your seniors. And the professionalism, you portray- is a bouquet of traits, characteristics and features- you picked up knowingly or unknowingly from all your managers when you worked/ still working with them.

Curiosity advances you with much more clarity, uncover truths, experience freshness by killing your monotony and spice-up with arrays and varieties.

I reiterate- be professional, stay professional and sound professional when you are at your work, when you are in your role. Here… staying objective always- and that’s by keeping the organizational goal and vision on top of everything, will help you attain your personal goal too.

And, gradually… people around you will better understand that everything is carried out only with one motto- Organizational growth- and you work and walk with that- You grow with the organization! And that’s what ultimately matters!!!

Wearing your HR hat and adding this trait and making it a habit will allow you to lead the crowd. Now- start being curious… it opens up more possibilities and don’t ever stop asking questions! – Sounds unorthodox; but very effective!

 

Happy sniffing!

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