What are the CHRO's post-merger priorities?

Though the term "merger mania" is most closely associated with the raft of business deals that followed in the wake of RJR Nabisco in late 1980s and early 1990s, consolidation is rampant in many industries, including health care, retail, media and energy.

Creating a single entity out of two separate ones requires a long list of activities for leaders in both companies’ C-suites. We asked two experts to outline a handful of post-merger announcement priorities for chief HR officers: Colleen Madden Blumenfeld of global outplacement and career transitioning firm Challenger, Gray & Christmas; and Dave Ramos, alignment expert and founder/CEO of SHIFTPOINTS Inc.

1. Show empathy. “The CEOs and investment bankers will celebrate the deal,” says Ramos, who is also the author of "Drive One Direction."

“While the deal may create shareholder value, in many companies, the employees are not shareholders. Recognize that 99% of your employees did not ask to be merged or acquired," he says "Thus, the deal has only downside for most of them. They will rightfully worry about their jobs being eliminated. They will rightfully worry about their benefits being changed. They will rightfully worry about their futures. Therefore, CHROs must lead with authenticity, empathy and compassion.” 

2. Present a united front. “Don’t worry about your own job,” Ramos says. “While it may be the case that the new company selects the other person to be the new CHRO, the first few days are critical. Sorting out who will ultimately get the job can create internal tension and politics, which can undermine the integration. Be a servant leader and worry about yourself after you have taken care of everyone else.”

3. Get policies in place. “If redundancies are expected, consider which departments and levels will be affected, what is the combined company going to offer them in severance, and how are they going to communicate these changes,” Blumenfeld says.

Many companies bring in professional experts to collaborate on severance package design, job-search assistance and other outplacement assistance. “This is where outplacement services can act as a partner to support transitioning employees," Blumenfeld adds.

4. Communicate frequently. “In some cases, leadership will not communicate post-merger staffing plans in the belief that it will panic existing talent,” Blumenfeld laments. That’s a bad idea. In the absence of information, top talent may pack up for greener pastures rather than hang around to see what happens.

“CHROs should be working cross-functionally to actively identify and retain high-potential performers," Blumenfeld says. "Take control of the narrative early on to not only retain talent, but to support staff who are transitioning out of the company. This could help create happy alumni and avoid potential legal issues down the road.”

5. Look for quick wins. “Immediately after the merger, the new company will have two of everything: two vision statements, two mission statements, two lists of core values, two sets of policies,” Ramos notes.

Your goal is to create a path to integrate the companies for optimal performance. “Find something that you can integrate quickly and celebrate your success.” This builds confidence and momentum to tackle tougher tasks ahead.

Mergers are complicated and emotional for everyone involved. Setting a small number of priorities for the first days and weeks after the announcement makes the process more productive and humane for everyone.

 

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