Posted by Danielle Feinblum, Cliff Mansfield, Grant Listek, Stephanie Miragliotta, and Claire Logan on February 18, 2019.
No matter the size, industry, or location, every deal comes with great challenges and even greater learnings. What if you had the chance to hear from peers across industries about the creative solutions that led to success or steps they wouldn’t take again in retrospect? Deloitte’s1 third annual Human Capital DealMakers Event brought together 29 HR M&A leaders to share their experiences, discuss current challenges across the M&A life cycle, learn about recent trends, and network with one another to establish valuable connections for the future.
The two-day event, held in October at Deloitte University in Westlake, Texas, kicked off with an interactive “gallery walk” to explore five of Deloitte’s 2019 Global Human Capital Trends in the context of M&A deals. Participants had the opportunity to think critically about how applying these trends (such as emerging cloud technologies and alternative workforce) could help address common issues companies encounter during a deal.
After an immersive session in Deloitte’s Greenhouse Lab on day two, participants joined breakout sessions of their choice, which focused on 1) HR’s role in due diligence, 2) HR transitional service agreements (TSAs), 3) how to preserve the cultural “secret sauce” when you acquire a startup, and 4) how to “transform your organization while you transact.”
A few key takeaways emerged from participants at the conclusion of the event:
Address culture early and directly
Culture was a hot topic throughout the entire event. Even though deals can be delayed, terminated, or experience negative impact to purchase price due to culture-related issues, a majority of the attendees said their organization does not yet assess culture at the onset of a deal. During the breakout session on HR due diligence, participants discussed how to assess cultural compatibility before a deal is even signed. By assessing a target’s culture early on, the buyer can identify risks that may have an impact on purchase price and proactively plan for announcement and integration activities. After discussing the potential implications culture can have on the success of a deal, one participant expressed an eagerness to “bring culture to the agenda earlier in the process and change the mindset of the deal team” at her organization. A common thread surfaced throughout the discussions—actively managing culture is critical to driving deal value, retaining top talent, and fostering a positive employee experience.
Transactions as a catalyst for transformation
The amount of change, heightened focus, and increased funding that typically come along with a deal can provide an opportunity to transform an organization. In the “Transform while you transact” breakout, participants explored the possibility of leveraging these investment dollars to transform a specific function, such as HR or the broader organization, during a transaction. Transformations can result in achieving synergies faster and improving the workforce experience and productivity. During the Human Capital Trends gallery walk, participants also discussed how organization design and job-mapping exercises provide an opportunity to reimagine jobs for the future. One participant was inspired by the challenge “on how we can reskill and redeploy the workforce while restructuring.”
Consider the perspective of other stakeholders
During the interactive Greenhouse Lab, participants had the opportunity to step into the shoes of other stakeholders in a deal. Taking on the “persona” of other stakeholders allowed participants to identify opportunities to better collaborate with their stakeholders in future deals and build upon their strategic role in M&A. However, taking the time to pause and consider the different, cross-functional perspectives is, as one participant called out, “extremely hard to do while you are in the thick of it all.” But investing the time up front to understand priorities and align around shared goals will lay the foundation for effective, collaborative decision-making and teaming throughout the deal life cycle. One participant shared, “When you really break down the different stakeholders, you find that we really do have a lot of the same goals and intentions. These shared goals should always be at the center of how we make decisions.”
The Human Capital DealMakers community continues to grow and create a unique opportunity for HR M&A professionals to share and learn from others’ experiences. At the conclusion of the event, each participant shared their most valuable takeaway, including one individual who shared “Everyone is still learning, regardless of how many deals you’ve experienced. There’s no silver bullet.”
If you are interested in learning more about Deloitte’s Human Capital DealMakers, please email us at ContactMAI@Deloitte.com. Visit the Deloitte M&A Institute website for the calendar of upcoming events, training sessions, and Deloitte thought leadership.
Danielle Feinblum is a principal in the M&A practice of Deloitte Consulting LLP, where she leads clients in the design and delivery of their people strategy during enterprise-wide changes.
Cliff Mansfield is a senior manager in the M&A practice of Deloitte Consulting LLP, where he leads clients through the creating strategies to integrate and separate their HR function, create and execute their organizational strategies, and engage their employees through the complexities of a transaction.
Grant Listek is a manager in the M&A practice of Deloitte Consulting LLP, where he leads clients through organizational design and HR functional integration and separation planning over the course of transaction.
Stephanie Miragliotta is a manager in the M&A practice of Deloitte Consulting LLP with a focus on organizational design, culture, and employee experience in a deal environment.
Claire Logan is a consultant in the M&A practice of Deloitte Consulting LLP, where she helps organizations create positive employee experience throughout the deal life cycle.
1Deloitte Consulting LLP