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The Top 10 M&A Issues

M&A deals have grown considerably in sophistication and complexity in recent years, and an increasing number of companies are realizing that people-related issues such as cultural adaptability and an understanding of local HR policies and practices have a strong impact on the long-term success of many deals. Underestimating or failing to address basic HR challenges that arise during due diligence on any merger or acquisition leaves companies vulnerable to legal incompliance, exposed to potentially large hidden costs and undeclared expenditures, and at huge risk of loosing key employees. However, many HR directors remain unclear as to what they should be doing. So how do you add value? We introduce ten essential steps HR needs to follow to ensure you add value during a merger or acquisition.

Business Issues Follow On
1 Understand the business issues If you don't understand what's driving the deal you'll have a tough time creating value
2 Undertake consistent, comprehensive due diligence that incorporates integration risks and costs. You’ll pay too much and you’ll need to start from square one later if your due diligence is inconsistent and ignores integration costs.
3 Prioritize, move quickly on highest value actions, and drive all decisions based on alignment to business needs. As the saying goes, if you don’t know where you’re headed any road will do.
4 Determine guiding principles, integration structure, and confirm senior management commitment early. If there’s no agreement or commitment on accountability from senior management—prepare for an exercise in futility.
5 Allocate full time “A” resources to managing the process. If you think you can handle this on top of a full-time job, think again.
6 Select top leadership carefully and address executive comp early. If the captain(s) of the ship are missing or distracted, you’ll drift aimlessly.
7 Identify, retain, and engage critical talent. If you don’t keep the “keepers”, the value of the deal disappears.
8 Address cultural issues and make sure your culture supports your growth strategy. Reward behaviors that drive your business and make sure everyone know the rules of the road.
9 Communicate consistently, clearly, and frequently. We’ve got a great strategy and plan—trouble is, no one understands it.
10 Measure and monitor your progress and results. You only get what you measure.
 

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