M&A: Does your talent approach fit your deal?
May 14, 2021
May 14, 2021
The M&A landscape has changed. Beyond market share and cost synergies, the value of M&A increasingly lies in transformation and growth.
Companies can’t afford to delay transformation for the sake of integration, as it freezes their ability to innovate while competitors surge ahead. Deal approaches need to change, allowing organizations to transform, and talent to flourish during integration.
Using deal intent as a guide, C-suite leaders can move beyond the one-size-fits-all approach that no longer works. We see three major deal intents requiring different approaches to talent, with advanced analytics technologies bringing out more value in each of these deal types.
These “in with the new” deals are meant to expand a company’s portfolio—from new products and brands, to new capabilities, to new geographies and markets.
Company leaders generally integrate support functions but take a light hand in coordinating innovation and go-to-market capabilities. Usually, the acquired entity brings something special to the table in these areas and leaders want to preserve it.
In pure consolidation deals, wholesale transformation is not the end goal. Instead, the focus is on achieving greater scale and the benefits that come with it—for example, cost reduction.
But some deals are a hybrid, where certain aspects of a deal will be treated as consolidation while other parts of the business might be viewed with a transformational lens.
Transformation deals are created for wholesale change—from positioning, to growth, to new capabilities.
A global consumer goods company made a major acquisition of a high-growth, leading beverage business.
Organization design approach
The acquiring company was seeking how best to protect the innovation capabilities of the beverage business, but also unlock its growth potential. Leaders considered multiple operating model options—standalone/add-on, different alignment options by geography or product category—but ultimately moved to a new operating model, creating a new division for the acquired company as well as its own relevant brands.
Talent approach
Careful consideration was given to retention of key talent to preserve the strong innovation culture of the beverage company. Talent largely stayed in their incumbent roles, with opportunities offered at the acquiring company for those who wanted to extend their experience and grow.
Lessons learned
The acquiring company was seeking to protect and nurture the capabilities and brand power of its acquisition, while leveraging the breadth and scale of its own operations to catapult growth. With a best-of-both transformation of the commercial model and increased investment in driving growth, the business thrived.
While 58% of executives in an Accenture Strategy survey reported that technology is already allowing them to achieve targets and capture value faster, many leaders don’t use their digital tools to full advantage. A mindset shift—gravitating toward purposeful experimentation and scenario testing—is necessary.
We’ve seen companies design combined organizations in half the time it used to take, leveraging a suite of analytics techniques. And the additional insight and flexibility these tools provide can be invaluable in an uncertain world.
People analytics tools allow for real-time, central management of a complex organization design and selection process, increasing speed to value while providing pinpoint accuracy.
In addition, the use of analytics enables insight-driven decisions at every major step of the organization design process, from a better understanding of costs to addressing organizational agility.
In our experience, companies that use M&A analytics technologies to their full advantage, designing a new organization to maximize transformation, give themselves a speed and accuracy advantage versus organizations that don’t.
We’ve seen companies design combined organizations in half the time it used to take, leveraging a suite of analytics techniques.
While there are myriad first moves depending on your company’s situation, a few overarching ones help the majority of companies hit the ground running:
Talent can’t be an afterthought in M&A. It’s an essential part of any new combined organization. Leaders who know its value are determined to use a tailored approach—and in the process, enable a better organization.