Analysts at investment bank – Credit Suisse – predict there will be a surge in Merger & Acquisition activity as organisations look to increase profitability, sparking a review of organisational structure and needs.
Research by Harvard Business Review places the failure rate of M&A at between 70-90%. HR teams have a critical role to play in countering this as they facilitate this transition across the business, among employees and the C-level executives responsible for running the organisation.
As you can imagine, there are many factors that need to be considered to ensure organisational development needs are reviewed and dealt with sensitively and professionally – and in such a way that is beneficial to the organisation, its shareholders and the people it employs.
The view of the market
To do this effectively, HR teams must ensure they are communicating with the key stakeholders involved in co-ordinating the M&A and running the organisation. This includes various key C-level executives, products and solutions managers, finance teams, operational teams. Essentially, the HR team needs to form a view of the new organisation against the market it is operating in and ensure staff requirements and HR policies are aligned accordingly.
Hard and soft issues
Understanding the ‘hard’ and ‘soft issues’ and the impact they have on the organisation are essential in helping drive change. For instance, knowing the effects that certain policies and systems have on people and the attitudes that employees have because of these systems shapes organisational culture.
HR must consider both sides of the coin, ensure they are taken into consideration and managed in line with organisational strategies and objectives.
One size does not fit all
Every firm has different ‘hard’ and ‘soft issues’ to deal with. Therefore it is essential that this is taken into account so that communication and messages are tailored according to the organisation. HR’s role here is to identify what is needed to drive the best results from employees: a strict structure based on driving efficiency – or an open culture focused on encouraging creativity and innovation?
For organisational development to truly excel it is usually beneficial to involve staff. This will help drive the thinking that sets the agenda for change.
By involving staff in establishing company values and objectives, they will be increasingly motivated towards achieving results that directly benefit the business. Failure to involve employees could result in shallow, unsustainable long term results.
Develop a learning culture
A recent survey commissioned by the business school at Sheffield Hallam University found that corporates often spend large amounts on training not directly aligned with strategic business goals, while 39% of CEOs suggest not enough training is done in their businesses to achieve their corporate vision. The same survey found that middle managers are key in enforcing development programmes that align with the values and strategies of the company. So what’s the answer?
Company culture, training, learning and development can all have a powerful impact on employee engagement and organisational growth, making it important to ensure that learning and development is intrinsically linked to business objectives.
Getting it wrong
Firms that fail to take the points above into consideration risk damaging the motivation and morale of employees, as they are likely to feel disconnected from the organisation. Poor alignment can also further impact businesses through creating fragmented, independent decision making processes that have a long-term impact on profits and business costs in the end.
What does the data say?
The role – and importance – that data plays in guiding organisational growth is only going to increase. HR teams need to consider this as they evolve their organisations. What do current HR and product systems say? How do organisations integrate these systems? And, what do they need so that they can ensure they capture the right data that enables organisational development (or growth)?
With the right analytical tools, data relating to company values, objectives and messages can provide in-depth business knowledge – helping reduce costs, streamline business processes and ultimately benefit employees and the business alike.
Managing organisational change during an M&A process is complex. But, with the right approach, strategy, conversations and tools in place making a success of it is both feasible and achievable.
Debbie Rennison, HR Director and FCIPD, MidlandHR