Every acquisition is different, which means the integration process with each is unique. For instance, Warner Pacific Insurance Services VP of Human Resources Jean Halsell says they acquired two companies that were competitors, so merging them effectively requires nuance. Dealing with that is made easier when she can be involved earlier.
“One thing the business didn't think about was how important HR is on the front end during diligence, Halsell said at last year’s Denver Smart Business Dealmakers Conference. “The first one that we had go through, I didn't hear about until, ‘OK, here's the people go figure it out. So, now I'm on the front end — an LOI get signed, and they call Jean. And there's still some hiccups.”
Having been acquired, she knows what it feels like to be on the other end of a deal.
“When we were acquired, I was thinking, ‘Oh, I know what this feels like.’ No, I don't,” she says. “Because that was 40,000 people that came together. I'm one of six people that sit in an office. And you wake up one morning it's like, holy cow, my whole life has just changed. There's a lot of unconscious bias that go on both sides, which can be difficult. And just understanding that that's going to be there is helpful.”
They have a playbook as well as an integration person to help merge the companies together. That has enabled them to go in and tell people what they can expect from the company through the process. But it’s not always that straight forward.
“There are always things that we don't know,” she says. “It's not cookie cutter. Finance wants it to be a spreadsheet, a list, but when you're dealing with people, it's very messy. And when you're dealing with people that are stressed, it’s even messier.”
The playbook includes information that lets those who are acquired know what they can expect during diligence.
“I think that's a surprise to a lot of these companies,” she says. “There's a lot of work that they have to do. Sometimes it's easier to get information, other times it's very difficult. With HR in particular, just understanding the people that are there, how long they've been there, what their behavior is. I want to see historical kinds of things.”
She says they started meeting with their teams very early just to talk. They ask the questions to hear the good and bad.
“I want to know where they see the problems,” Halsell says. “When they start thinking about selling their companies, they're trying to make it attractive. So, a lot of times the people part has been forgotten. We come in (and find) there are people that haven't had a raise in 10 years and we try to bring that person along. Their benefits aren’t where they should be.”
Having conversations with those who are coming over as part of an acquisition helps her discover their issues so she can help them solve their problems, which helps gain their trust. That could mean helping an employee get a new chair, or communicating to the CEO how devastated a former owner would be if the company name changed.
“I'm a truth teller,” she says. “I feel that HR, we hold this spiritual standard for the organization, or their conscience, and I have to be able to speak up and do it in such a way that they will listen.”
The HR aspect of an acquisition can have a very long tail. Things can come up that are unexpected. For instance, finding out that pay dates don’t match.
“But just being there and listening and trying to ensure that their questions are answered about where we're going with this — no, we're not closing this office, you were a strategic purchase for a reason because you have what we want. And just having those hard, hard conversations.”
Another part of the strategy is understanding why certain people are being retained. That can mean questioning whether someone will be positive for the combined-companies’ future. Having the right conversation and voicing those perspectives is important.
“Dealing with human beings is messy and you need to be adaptable,” Halsell says. “You need to be willing to do what that person needs in order to feel heard and valued. That doesn't mean that they get everything that they want, but they need to understand.”
