Integrate key employees in a merger

In most integration efforts, the acquirer simply leaves most employees in their current jobs, because they do not have sufficient time to evaluate everyone. This is perfectly acceptable for many positions. However, what about senior positions and opinion leaders where the quality and attitude of the employee can have a profound impact on the performance of the acquiree? The following issues for the integration team to address are targeted primarily at those key positions:

  • Evaluate employees. It is dangerous to base the retention of a senior manager on a single interview (or none at all). Instead, the team should schedule a round of interviews with each senior manager, and have the interviewers fill out an evaluation form that is then aggregated to arrive at a group opinion. These interviews should involve a common set of questions, as well as mandatory scoring in such areas as leadership, technical skills, and communications, so that all interviewers can evaluate based on the same information.
  • Founder disposition. The acquirer has probably just made the founder of the acquiree a wealthy person, so job retention will be unlikely, unless there is a way to pique his or her interest. Here are several possibilities:
    • Advisor status. The founder may have an interest in advising the acquirer in exchange for a stipend. This is more likely if the founder plans to retire, and so has time available for such activities.
    • Invest in new venture. The founder is probably an entrepreneur and so has no interest in being managed, but might consider accepting an investment in a new venture. This may be a good approach for the acquirer, if only to maintain relations with the founder.
    • Run R&D unit. If the founder has an engineering mindset, there may be some interest in putting him or her in charge of a special research and development group that allows for a focus solely on new products.
  • Opinion leader relations. There are typically a small number of longer-term employees whose opinions are listened to by others within the organization. The team needs to locate these people and work with them in crafting its integration plan. The result may not be their active support, but it may be possible to keep them from engaging in active resistance to the integration team.
  • Relocate positions. If the acquirer is truly interested in retaining employees, but needs to move them to new locations, then it must pay 100% of the relocation costs, as well as provide sufficient monetary incentives.
  • Retention analysis. The team should create a report for the acquirer’s senior management team, detailing the impact if certain key employees leave the business, and also describing the team’s retention plans for them. Retention should involve whatever is needed to keep an employee, such as a change in title, responsibilities, job content, or location – the issue is not always compensation. Senior managers need to decide if they are willing to support the recommended actions, after which the team works with the targeted employees to keep them with the company.
  • Settle roles. Most employees in an acquiree are not going to be laid off as a result of the acquisition – but they do not know that until told. Consequently, the integration team should decide as soon as possible which employees will be retained, and to whom they will report. Waiting to complete this step is dangerous, for it introduces uncertainty into the work force, which will at least result in reduced productivity, and which may extend to some people finding jobs elsewhere.

The integration effort can involve some tense moments, as some employees are shuffled out of positions that they may have occupied for years. The worst case is when there is considerable ambivalence against the acquirer, and this attitude is rampant in the work force. If so, the integration team may have no choice other than to replace a large part of the acquiree’s work force, probably starting with the opinion leaders and cutting as deeply into the organization as necessary to root out those causing trouble.