3 Keys to Prioritizing Human Capital Change Management in an Acquisition

If an acquisition is on your horizon, you’re probably already thinking about how best to assess and integrate the company’s operations and financial with your own. But if you haven’t given much thought to how to merge people and culture, you’re not alone. Manufacturers tend to overlook human capital change management because they lack resources or well-defined processes for the effort. Unfortunately, we’ve had many clients share how this oversight has come back to bite them in the form of high turnover, perpetuated bad habits, and low productivity.

The good news is, it’s entirely possible to get ahead of these issues and to help people navigate through the changes in a positive way. Process, planning, and communication will be your allies here. More specifically, here’s what it takes to do human capital change management right:

  1. Prioritize human capital due diligence. Just as you will take a close look at operations and financials before you execute any acquisition, you need to size up the people you will be bringing on board as well. And this goes beyond the top one or two executives in the firm. Acquiring companies often lack formal processes for this effort, but it’s well worth putting in the time to create process that is aligned with and can be implemented alongside your operational and financial due diligence. Ideally, you want to look at leadership performance down to the shop floor managerial level as well as each leader’s readiness and aptitude for change. You should also have checklists and action items for assessing workplace culture and determining how it meshes with, or conflicts with, your own.
  2. Work out the details of your change management plan. One of the biggest issues we see in companies that experience human capital integration problems is that there simply is no vision or communications plan in place to help the people at the acquired company understand the forthcoming changes and how they will affect them both professionally and personally. When people don’t know what their future holds, they are likely to assume the worst. And this can and will cost you good people. It will also do serious damage to productivity and morale. What’s more, if you don’t address these issues up front at the time the acquisition is announced, it’s going to be much more difficult and disruptive to tackle them later on. People will see it as a second round of major change and will be much less receptive to getting on board with the new policies and procedures the longer you wait.
  3. Collaborate with the acquired company’s leadership team to ensure success. When it comes to communicating and implementing changes that will impact people and the way they work, your biggest allies are going to be the leaders they already know and trust. So, it’s important to gain buy in from the acquired company’s leadership team first and to work collaboratively with them to roll out the changes. Equipping the acquired company’s leaders with good information, support, and a channel to get their questions answered in a timely manner will go a long way in ensuring changes are presented in a positive way to the larger team. This collaboration can also help you successfully bridge any cultural gaps and find ways to help people successfully adjust to their new work environment and expectations.

Have a plan for your people. And avoid people problems down the road.

Human capital change management can be one of the trickiest parts of a successful acquisition. Good planning, process, and communication can help you avoid the pitfalls and ensure the success of your deal across all dimensions. To learn more about why and how to prioritize human capital change management, download the article, “Acquisitions 101: The Hand-Holding that Should Be Happening, But Isn’t.”