{"id":4478,"date":"2023-07-07T14:43:03","date_gmt":"2023-07-07T14:43:03","guid":{"rendered":"https:\/\/www.ceo-worldwide.com\/blog\/?p=4478"},"modified":"2025-05-15T21:12:36","modified_gmt":"2025-05-15T21:12:36","slug":"the-importance-of-people-strategies-in-merger-acquisition","status":"publish","type":"post","link":"https:\/\/www.ceo-worldwide.com\/blog\/the-importance-of-people-strategies-in-merger-acquisition\/","title":{"rendered":"Beyond the Deal: The Importance of People Strategies in a Merger & Acquisition"},"content":{"rendered":"
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In today\u2019s competitive business world, many organizations are choosing to focus their growth strategy through mergers and acquisitions. The value proposition for leaders is that by joining forces with another organization, growth can be more exponential and accelerated when compared with attempting to expand organically. When an organization is considering a potential merger or acquisition, they often place a priority on evaluating the prospect\u2019s industry segments, geographic footprint, revenue, and service offerings. While this is critically important to achieve the desired goals, if the people & culture component is overlooked, there is a significant risk of turnover, low engagement, and low performing teams which in turn affects the experience for clients and ultimately organizational performance. This is where HR leadership has a critical role to play.<\/p>\n\n\n\n

Before we dive into some best practices, I\u2019d like to take a moment to differentiate between a merger and acquisition as these words are used interchangeably. A merger occurs when two organizations agree to join forces to create a new, joint organization. The recent merger of BKD and DHG<\/a> to become FORVIS is a good example of a merger. Conversely, an acquisition is where one organization is absorbed by another. The recent agreement for tech giant Oracle to acquire Cerner<\/a> is an example of this type of transaction. It is important to note that since an acquisition can have a negative connotation as a \u201ctakeover\u201d, it is sometimes informally referred to as a merger, leading to the use of these terms interchangeably. Now that the business lesson has concluded, let\u2019s return to the topic at hand.<\/p>\n\n\n\n

Regardless of the type of transaction that is taking place, it is essential to have people strategies as a central component, particularly at the onset of conversations between two organizations. For this to occur and for HR leaders to be invited to this conversation, a prerequisite is for these individuals to establish credibility as a strategic business partner so they can have a seat at the table. For more on this topic, visit my blog and download the whitepaper \u201cHow to Get a Seat at the Table\u201d.<\/p>\n\n\n\n

To truly put people first, here are five best practices to consider for your next merger or acquisition:<\/p>\n\n\n\n

Conduct People Strategy Due Diligence <\/h2>\n\n\n\n

At the onset, a people workstream should be formed to conduct due diligence for the prospect organization. This team\u2019s responsibility is to evaluate the following elements of the potential transaction:<\/p>\n\n\n\n