When looking at a deal from a people perspective, Insperity Managing Director, Private Capital Markets Emily Hak told attendees at this past week's Milwaukee Smart Business Dealmakers Conference that communication is critical to a post-deal integration plan.
"You can have a really great plan, but if you don't have a plan on how to communicate it with those employees that probably weren't involved in the decision to be acquired, or a plan to really follow through, that's where some of the best deals can become the worst deals if they're not well integrated," she says.
Wisconsin River Partners Managing Director Jim Frings says that when it comes to the people in deals — from the top down — each is unique. In some cases, he wanted the seller to stay on board and continue to run the company. When there are sellers who care greatly about their employees and the legacy of the business, those people turn out to be excellent managers for the long run. But that's not always what the seller wants.
In one deal, he says the company had great customers, really good people on the floor, great knowledge, but two divorced couples in management created a unique circumstance.
"We did an old-fashioned signing of a deal at the accountants office," Frings says. "And we got back to the company to make the announcement and I went up to the divorced woman who was one of the sellers. She was sitting in the waiting room until we made the announcement. And I said, you're still part of the family. Whenever we have a luncheon or something like this, we would like to have you come and join us. And she looked at me with a little disdain in her face, and said, 'You'll never see me again.'"
When the purchaser, whether a strategic or financial buyer, claims post-acquisition that they'd like things to stay business as usual, Executive Search Partners President Nick Curran says the motive of that is real and true.
"We want to make sure that people are not afraid," Curran says. "We want to make sure that people aren't scattering out like mice when we take over. So, we feel that the appropriate thing to let people know is it's going to be business as usual, when the fact is, is that that's absolutely not the case."
Given that the intention when buying an organization is to improve it, he says it then can't business as usual at that company.
"This organization has grown to a certain point — grown to $20 million, we want to grow it to $40 million. There's absolutely no way that the same company can go in and have business as usual to grow it to $40 million."
Since that's the case, he says he encourages buyers to tell the truth.
"People can handle two kinds of news: good and bad. You lose people in the gray," Curran says. "So, you tell them the truth. And the truth doesn't have to be negative, the truth has to be realistic; realistic of this is who we are, this is what we stand for, this is why we acquired you, this is what matters to us. We recognize you're fearful of. However, this is what we stand for. It may not be easy, but we're here. We're here to listen, we're here to learn, and we're here to make this company as great as it can be. And we can't do it without you. However, there will be challenges. Some of you will not be here by your choice or by our choice. But the fact is that we have a great goal in mind and we're all going to get there if you give us that chance. And what I ask is that you give us at least six months to show you who we are. And then you'd be the judge."
Kyle Enterprises (dba Millennium) Vice President of Employee Success and Development Mary Burback says when employees get acquired, it's not their choice.
"It's our job to really create that employee proposition so that they understand the why of it; you show them the value, you get them coming along," Burback says. "You can anticipate, am I going to lose my job? Is my coworker going to lose their job? Am I going to have a new department? Am I going to have a new manager? Am I going to lose my benefits? There's so many things that swirl in people's heads that you really need to be intentional about calming some of that down."
She says by getting new employees in the fold in that first 90 days, it makes a huge difference in productivity, engagement and long-term retention. It's also important to get the basics right, which means making sure employees get paid and that the benefits are right.
"Because those are the things that are personal, not only to them, but to their family," she says. "It's hugely impactful the change that we bring."
She says they also get their leaders involved in performance management at all layers of the organization. That can be done through one-on-one meetings, quarterly conversations, as well as team building and other opportunities to bring people together to talk.
"Because if you're talking, you're going in the right direction," Burback says.
