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With more companies becoming involved in acquisitions or mergers, there are increasing opportunities for HR consultants to help the newly formed organizations "become one." What types of services are consultants providing, what is the demand and what opportunities are emerging?
Sarah Hathorn is CEO and founder of Illustra Consulting (www.illustraconsulting.com) in Duluth, Ga. She’s a former Fortune 100 executive who has survived multiple mergers and acquisitions and now shares her personal experiences with clients to help them “stay above the fray.”
Through her experience, Hathorn has noted some predictable outcomes related to merger and restructuring activities.
*When a merger, downsizing and rightsizing occur, many employees lose their enthusiasm and morale can be impacted, said Hathorn. “People are worried about their jobs and there may be a lot of redundancy and overlapping of responsibilities,” she said. Some facets of the operation may suffer. HR consultants can become agents of stability, she said, “by exerting leadership when needed, being a dependable team player and keeping an eye out for ways to plug gaps in the system until things return to normal.”
*“Silo mentality” is a risk during merger situations, noted Hathorn. This occurs when critical information is stored—or even hoarded—within companies. “Instead of sharing their knowledge and information, employees guard it like private property, thinking that this gives them an added advantage,” said Hathorn. But, the silo mentality disrupts communication, causes inefficiency and redundant work and is cited by CEOs as one of the biggest and costliest obstacles to performance and efficiency, she said.
Dennis and Michelle Reina are consultants specializing in measuring, developing and restoring workplace trust. They are the authors of Rebuilding Trust in the Workplace: Seven Steps to Renew Confidence, Commitment and Energy (Berrett-Koehler, 2010). They agree that, during times of uncertainty that are created by mergers, acquisitions and restructuring, there are some predictable “red flags” that companies and their HR consultants should be alert to. Are people disengaged? Are teams missing targets or deadlines? Are groups operating in silos?
Initially, the relationships between executives of merging organizations are most susceptible to trust issues, but those issues are rapidly exhibited in other areas—notably with employees and clients.
“For workers and executives, relationships generally break down when employees are asked—and expected—to make changes without leadership making efforts to understand who they are, what they do and how they do it,’ said the Reinas. “Workers can, and do, feel marginalized. They distrust leadership and, rather than accepting and even embracing the merger, they withhold their commitment and energy in supporting its success. An ‘us vs. them’ mentality emerges.”
HR consultants can explore and positively impact this predictable environment by asking employees—preferably face to face—what’s happening for them. Leadership should be sharing information, showing the larger context for business decisions and helping people take responsibility for their choices going forward.
HR consultants, even HR consultants in single or very small operations, are in a good position to help address these problems, said Hathorn, the Reinas, and others.
Opportunities for HR Consultants
Suzanne Francis is a senior partner at Schaffer Consulting (www.rhsa.com) in Stamford, Conn., and has recently led merger integration efforts at ConAgra Foods, Pfizer, PepsiCo and Fidelity. Consultants can help merging firms increase the likelihood of merger success through early strategic planning, adequate allocation of resources and the relentless pursuit of measurable results through cross-business collaborative projects, said Francis.
“One of the trends that I see in the world of integrating, mergers and acquisitions is that more companies are recognizing the need to do something and are going to outside consulting firms for help,” said Francis.
Many turn to larger firms. “We battle that all the time,” she said. Through her experience, though, she has identified some areas in which small firms or even individual HR consultants can land opportunities in this area:
Coaching integration leaders. HR consultants can coach leaders on how to manage the merger effort and serve as an advisor to them, said Francis. Having prior experience in this area can add credibility, she said.
Cultural integration. A predictable challenge of any merger or restructuring effort is integrating two or more diverse cultures. “This is an area where the big firms say they will do it, but they are probably more interested in strategy and mechanics and analytical work,” said Francis. Independent HR consultants have an opportunity here to help organizations learn about their own culture and the culture of the company that it is acquiring. “What are the differences in the businesses’ motives of operation that are going to make these two companies effective as they become one?”
Niche opportunities. Francis recommends that HR consultants find ways to collaborate with organizations that are involved in merger efforts. “Look for areas where you have expertise that might be useful to them,” she recommended. For instance, HR consultants with experience in acquisitions and mergers might develop workshops or seminars. “See if you can find a way to position yourself to work in a niche, rather than competing as an overall advisor with the larger firms,” she recommended.
There is a “goldmine of opportunities,” she said, because the HR function extends into so many different areas of the organization. Because of this, targeting the HR function itself during a merger or restructuring may be more effective than attempting to sell the leaders. “How can you help them select and staff during the integration effort? You’re going to have two people for every job—how do you have fair, equitable and product talent assessment that leads to the best players?”
There are plenty of opportunities, said Francis, but like anything else these days, she said: “It requires hustle.”Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues.
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