- Merger and acquisition negotiations that fail to engage middle managers risk weakening the outcome of a deal, according to a report by The Conference Board. In a press release, The Conference Board said neglecting middle managers in M&A deals carries risk because these managers perform day-to-day work and are ultimately responsible for either embracing or rejecting senior leaders' proposals.
- Perhaps equally important to the success of an M&A proposal is leadership; companies are increasingly considering leadership as a factor in M&A decisions, The Conference Board said. According to the think tank's report, successful acquirers spent more time gathering the opinions of stakeholders regarding individual leaders, rather than relying solely on interviews with leaders.
- The Conference Board released the report after what it called "a banner year for M&A activity"; 2018 marked the third-highest year for M&A activity on record, and that M&A activity may only increase in coming years, the organization said.
An M&A's success depends largely on what happens after a deal closes, and HR has a responsibility to engage both management and front-line employees throughout the process to ensure a smooth transition.
Culture may be one of the most important factors in M&A, a point of discussion that gained prominence following the high-profile acquisition of Whole Foods by Amazon. In that particular case study, experts who spoke with HR Dive emphasized the importance of communication and transparency regarding retention plans and the acquisition's effect on stated company values, if any.
Employee engagement in general is key to preserving culture in an M&A scenario, and not every worker is sure to be on board with the change. HR can develop a risk mitigation plan around the most sensitive change items and facilitate activities like peer-to-peer conversations that allow workers to share their workflows, one expert told HR Dive in an interview. Employers might want to avoid saying changes won't occur if they in fact are, lest they risk losing the trust of stakeholders on both sides of the M&A.