Of Mergers and Politics

We’re well into the silly season of politics, as any glance at the headlines will confirm. Politics is also an inevitable part of just about any organizational merger or acquisition and, just as in Washington, can be downright silly. I gleaned this from a recent interview with Shari Yocum and Niki Lee, two managing partners at San Francisco-based Tasman Consulting.

Yocum and Lee know mergers: Prior to forming Tasman Consulting, they served on the HR mergers-and-acquisition team at Cisco Systems. Cisco’s acquired a lot of companies during its time on this planet, including WebEx and Scientific-Atlanta, not to mention a boatload of much-smaller startup firms. As people familiar with the process know, one of the biggest M&A risks is losing the very talent you’re trying to obtain by buying the company. That includes the CEOs and founders, who–especially in smaller firms–have gotten used to calling the shots and setting the pace.

This can extend to things like whether or not they’ll continue to be able to fly first-class on official business once the deal is sealed. ” ‘I fly first class and so does my team,’ ” says Lee, relating a typical statement from these executives during her time at Cisco, “and then on Monday, they’re flying to India on coach.” Personally, I do think that would be a bit tough to swallow. But Cisco had its own cultural norms that needed to be adhered to, she said, and one of them was consistency: Everyone is expected to fly coach.

“Dealing with the executives at the company being acquired can be very difficult,” says Lee. “A lot of times, you’ll see the true colors of these executives” during this very delicate process.

Other sensitive areas included post-merger span of control, integration and marketing strategy–all areas that, as company founders, are of particular concern to them. While it may be tempting at times to simply buy these folks out and say “See ya,” the inconvenient truth is that their knowledge and insight is often extremely valuable, say Lee and Yocum, and ways must be found to keep them reasonably happy and engaged–for the short term, at the very least.

Politics is practiced on both sides of a deal–including at the acquiring organization, they say. Managers and executives will often jostle to be included in key decisions, hoping to make their mark and expand their own portfolios. Dealing with this vast array of hungry egos while attending to the hundred other details involved in a merger will test you like few other corporate experiences will, say Yocum and Lee. It’s why they believe HR leaders need to plan now for the eventuality of an M&A at their own companies, regardless of whether one is on the horizon or not.

Part of this is ensuring that you have a good working relationship with each of the key players in your organization, says Yocum. That way, you’ll have their trust and will be more likely to respect and adhere to the advice you have to give on crucial matters pertaining to talent. This also requires you to have a deep understanding of the business: its challenges, market conditions, opportunities, etc. Another piece of advice: If you’ve been involved in a merger before, go back and create a playbook, a repeatable process so everyone on the merger team will understand what their responsibilities are, she says, and create some online training that captures the critical knowledge you’ve gained so others can view it.

You can learn more about Yocum and Lee’s insights by reading the Q&A with them that will appear in the August issue of Human Resource Executive, our first-ever digital issue.

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