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April 10, 2023

Losing key people is one of the most significant value leaks post-close. Acquirers must focus on the employee experience to retain as many employees as possible. This article will discuss how to execute a people-focused integration featuring Marilyne H. O'HARA, Global Head of M&A Integration at Block. 

"All integration must be people-focused. Culture will always outperform strategy, and if you have culture and strategy together, it's unbeatable." - Marilyne H. O'Hara

Ideal process

According to Marilyne, the integration lead must be involved early on in the process. Ideally, the integration lead should be involved in management presentations and have a close relationship with the sourcing lead and the general manager.

When the integration lead is involved from the beginning, they can create a stronger integration plan. The integration lead will also have more time to build a better relationship with the target company, which will come in handy post-close during onboarding. 

Including the integration lead early also helps avoid redundancies during diligence, increasing the speed of the transaction. 

For companies with no dedicated integration team, everyone considered critical for post-close activities must be involved in the diligence process to gain continuity and improve day-one readiness. 

Focusing on people

When focusing on people, the most important thing to do is listen. The integration team must understand what's important to the employees if they want any chance of retaining them post-close. Involve the HR lead as early as possible because they have expertise in reading people and understanding culture. The target company should also bring their HR lead in early to help identify risks.  

Provide the managers on both sides a chance to have conversations. Aside from valuable insight into the companies’ cultures, managers can help identify functional cultures, list key employees, and share how to make their employees happy.  

Have as many conversations and interviews as possible to understand the target company's culture. Go on-site to get a hands-on feel for the culture and learn what's important to the employees. 

Onboarding people

Never treat acquired people like new hires. The incoming team often learns about the deal a couple of days or weeks before the announcement. As a result, the incoming team has very little time to get to know the acquiring company and mentally prepare for any post-close changes.  

Customize the onboarding process to cater to different employee groups. Communicate the deal rationale, so everyone knows what to expect regarding the upcoming changes.

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