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Tag: leadership

Make HR A Key Part Of Your Acquisition Strategy

Mergers & Acquisitions: Not Having HR At The Table Is a Costly Mistake

You’ve heard the phrase “Pay me now or pay me later”. This became one of the strongest marketing slogans of the 20th century because the message of “invest a little early, to avoid big problems later” applies to so many things in life – including mergers and acquisitions.

When it comes to mergers and acquisitions, there is absolutely a business case for involving human resource partners early, in order to prevent problems later on.

M&As are part of many corporate growth strategies, yet the vast majority of these types of transactions fail to meet their strategic objectives. According to Harvard Business Review, “Companies spend more than $2 trillion on acquisitions every year. Yet study after study puts the failure rate of mergers and acquisitions somewhere between 70% and 90%.” One of the main reasons they fail is because the parties involved underestimate the impact that people-related decisions will have on the outcome of the integration.

M&As that meet and exceed expectations have one thing in common: a clearly defined people and culture plan from the outset.

Here are some of the ways that HR can influence the outcome of an M&A:

  • Culture & Leadership: A cultural and leadership review during the market scan is vital when two organizations are to align their business goals and objectives. Senior leadership, including HR, need to agree on the organization’s vision and leadership style.
  • Financial Implications: The due diligence phase of every M&A needs to be a thoughtful and thorough process. When HR is not involved from the onset it often negatively impacts the acquisition budget, and ultimately the final purchase and sale agreement. This happens because details concerning third-party contracts; pension plans; total rewards and compensation; non-competition and non-solicitation agreements; sub-agent contracts; and high value/high flight risk employees weren’t given the attention they deserve. Involving HR early will help to ensure these matters get the attention they deserve before it’s too late.
  • Communications Strategy: During an acquisition, there are always mixed feelings (anxiety, fear, excitement, etc.), and these emotions will impact the long-term success of the transaction. Honest and timely communication can help manage employee emotions and minimize the impact they may have on business continuity, productivity, and retention. HR partners can provide perspective to the leadership team regarding what messages need to be communicated, when they should be communicated, how they should be communicated, and to whom they should be communicated. They can also help identify key players inside both organizations to help make the integration of people and shared services go smoothly.
  • Retain High Performers: Many acquiring companies lose high performing talent simply by overlooking HR risks from the earliest stages. Let’s face it, the best performers are the most mobile and they know who they are. But do you know who they are at time of purchase? When HR is involved in the planning phase of an M&A they can help identify flight risks and develop a plan to retain high-value talent.

Stay tuned for more on this M&A People and Culture series.

Corrie Anderson is Director of Organization Development with Optimum Talent and a specialist in People Strategies for mergers and acquisitions.

Diversity equals profitability

Shareholders! Are too many male Canadian board members costing you money?

This post is co-authored with Normand Coté.

Is the homogeneity of Canadian corporate boards costing shareholders money?

On September 28 the Canadian Securities Administrators (CSA) issued a report indicating that women board membership on TSX listed companies had increase by 1% from last year to 12% in 2016.

That’s pretty underwhelming, but unfortunately not surprising. For over 25 years there’s been talk about women advancing into senior executive and board roles, but it’s largely talk. There appears to be a self-fulfilling prophesy that ensures women of skill, ability and endurance are held back.

“Again this year, the most common explanation given by issuers that do not consider the representation of women in executive officer appointments was that their selection is based on merit.” (p 8)

Selection based on merit seems to be a stumbling block for corporations. Women are being left out of consideration for high potential development and succession planning. In our experience they are under-represented in the selection process and consequently corporate Canada isn’t growing enough women leaders. This behaviour extends to other under-represented groups as well.

There’s enough research indicating that boards offering diversity, and by this we mean broader perspectives, innovative approaches and richer discussion, result in better financial performance. While boards are conservative by design these short-sited hiring and development practices can no longer be considered a viable pretext for the status quo. So why is corporate Canada short-changing itself and its investors? Is it possible that the biases which excluded women from becoming magistrates and senators found a cozy home in Canada’s boardrooms?

The key to overcoming this limitation is to confront the biases and the egos maintaining the status quo. Begin by acknowledging that they exist: in the corporate environment, in the boardroom and in the board members themselves. Diversity in the leadership and succession planning pipelines needs to be tied not only to the “merit” boards say they are seeking, but also in seeing the “people potential” within their organizations. Tools and external objectivity provide meaningful interventions that focus on clear data and rational decision-making – in other words they eliminate the unconscious biases that the people involved in the selection process poses. For example, external consultants who understand board and industry contexts can ask tough questions designed to illuminate how members think about key issues such as merit. They can also help to establish clear criteria for sourcing candidates based on merit and diversity. Rigorous psychometric assessments target behavioural traits that mitigate stereotypes formed over a life-time of professionally biased leadership perceptions.

The key function of a board member is to balance stewardship safeguarding the prosperity of the company with shareholder interests. This job cannot be done effectively if existing board members are afraid of working with and for women.

High potential leaders

You Must Diagnose Before You Can Prescribe

You’ve hired the best people for your organization. Now it’s time to identify the high-potentials that can take on leadership roles. This is a fundamental business investment designed to sustain your organization’s profitability now, but most importantly into the future. Essentially you are determining who can lead while you can mentor them; who will lead when you’ve moved on. Before the selection process can begin, it’s crucial that company leaders identify the unique skills and assets that each person can bring to your team.

This entails defining the set of activities that will accelerate future leaders’ development and get each ready to lead by developing their self-awareness. Just as a physician evaluating a new patient performs a diagnostic exam before prescribing a course of treatment, you must assess high-potential leaders. Performing a diagnostic assessment enables you to select proper development solutions.
To ensure a proper assessment, your diagnostic tools should include:

  • A 360-degree surveys or simulations
  • Validated personality traits inventories
  • A tailored knowledge and experience review interview or questionnaire

These three methodologies will generate a wholesome view of the high-potential leaders’ strengths and development needs.

Having collected meaningful information you can now ask the vital question that target your high-potential candidates’ self-awareness:
“What is it that one is aware of when one is self-aware?” In a nutshell, there are two answers:

  1. On the one hand, you can be aware of your identity: how you think about and evaluate yourself.
  2. On the other hand, you can be aware of your reputation: how others think about and evaluate your behaviours.

It is critical that a leader, particularly one who is part of a development process, is aware of both the impact of his or her behaviours and his or her reputation as a leader.

Self-awareness is particularly critical if there is a gap between the self-view and the reputation. When both are aligned it is considered self-accuracy.

Leaders who are highly self-aware and “honest with themselves” will recognize their challenges and gaps in order to maximize their strengths. The higher the self-awareness, the more likely the leader will improve.

Performing a good diagnostic before the prescription avoids wasting time, energy, and money. It is the right way to accelerate leadership development, for your high potential candidates and the people they will lead to sustain your organization in the future.

Business Growth

Nothing Grows in the State of Perfection

Nothing can grow in a state of perfection.  Perfection simply does not allow it. It is already perfect, complete.

Now, the problem with perfection is in fact, its’ completeness.  Once perfected, it remains the same, never growing, never changing.  This pushes  against the nature of life itself, whose drive seems to be to forever grow or cease to be.  And like life, organizations and the people within them ideally move continually towards growth.

Working with clients as a career coach, I see first hand how the desire for perfection constrains achievement, fulfillment, decisions and action.  If one can’t do it perfectly, there is a tendency to stop or never begin.

Leadership that demands perfection, too, constrains the growth of an organization. Risk-taking stops, everyone is afraid of making a mistake and the impending consequences.

Progress - Perfection - Concept

Stop striving for perfection, and stop looking for it.  For if you find it, you have found completion. And completion can be a dead end.

If you or your organization has “room for growth”, celebrate it, for it has the space within its’ corporate walls where things can happen.

Two Businessmen Sitting Indoors With Coffee Laptop And Folder

Stop Paying Lip Service to the 70:20:10

The 70:20:10 approach to development is fairly well known by HR professionals and many line managers.  It is commonly recognized that about 70% of what adults learn comes from experience (learning by doing), 20% comes from others (working with a good leader or coach and receiving feedback), and 10% comes from formal learning (taking a classroom or e-Learning course, for example).

Though easy to understand, there is a difference between knowing a concept and applying it effectively. Unfortunately, it seems that many organizations are paying lip service to the concept; especially the 70. Development plans created for leaders are too often weak on the 70% and contain vague recommendations. Proportionally, the concept looks more like this in its application 70:20:10!

Learning while working on real business issues or assignments is very powerful. The “prescription”—the development plan—must be specific about the types of situations to which the leader must be exposed. The challenging or stretch assignment is by far the most common way organizations will grow their leaders by experience. But there are a limited amount of leaders who can be involved in stretch assignments. This view of the 70 is too limited.

There are multiple other ways to grow leaders by leveraging the 70, such as:

  • Being a member of a committee responsible for a new product implementation
  • Attending a strategic negotiation meeting with your leader
  • Leading a cross functional initiative such as Six Sigma aiming at improving organizational effectiveness
  • Collaborating with a university on a research project
  • Training peers and other employees on a new sales management and reporting system
  • Leading a charitable initiative in your community, etc.

Many examples of learning-by-doing do not require the leader to leave their current job. The experience can be short or long, in-depth or light, internal or external to the organization. 

Business presentation on corporate meeting.

In order to support the line managers to truly leverage the 70, an in-house customized repertoire of high added value experience can be created. This allows the leadership to “see” the number of ways leaders can learn by experience. Because in fact, the 70:20:10 can’t be managed and directed like the formal learning; you can only support it, facilitate it and help make it happen.

It is often said that the 70:20:10 allows leaders to learn at the speed of business; the amalgamation of the multiple ways to learn and grow makes it more real and applicable to today’s work environment.

What is critical to retain from the model is not the % allocated to each component of the model, but that leaders will maximize their growth and chances to progress in their career if they leverage multiple ways of learning and learn constantly, no matter how it is being categorized!

Jocelyn Bérard is the author of book  “Accelerating Leadership Development.” He can be reached at jberard@optimumtalent.com