A Look at HR’s role in Mergers and Acquisitions
One of my colleagues, Dave Carhart, a former technical recruiter, is studying for his MBA/MILR – (Masters of Industrial and Labor Relations) at Cornell University. He recently sat down with me to discuss the lessons learned from his internship with Hewlett Packard (HP). Dave was part of a Human Resources Mergers and Acquisitions team that helped integrate the workforce talent of companies recently acquired by HP. Over the past decade, HP has been recognized repeatedly for its talent management practices, including a 2006 BEST award from ASTD and SHRM’s 2009 Human Capital Leader of the Year, which was awarded to Marcela Perez de Alonso, HP’s executive vice president for human resources. Dave has graciously agreed to share some “lessons learned” with The People Equation so that fellow Human Resource professionals can benefit.
Jennifer: Thanks, Dave for joining us, and for sharing this information with the readers of The People Equation.
Dave: My pleasure. I’ve gained tremendous benefit from the online HR community and this interview is a great way to stay connected. Thanks for the opportunity.
Jennifer: You were part of a Human Resources mergers and acquisitions (“M&A”) team responsible for integrating the workforce of companies recently acquired by Hewlett Packard. What was that experience like?
Dave: It was a very exciting, fast-paced and intense environment. A few of the acquisitions were high-profile deals—well-known companies such as Palm and 3Par. Over the years, HP has integrated literally hundreds of thousands of employees and we have deep knowledge in this area. It seems that companies have realized how important the Human Resources function is to the M&A process. That’s exciting of course, because it’s my chosen profession.
Jennifer: Part of your team’s role was to integrate employees after the “deal” was done. What are some of the aspects that surprised you about the process of on-boarding?
Dave: How much planning went into the integration—planning for communications, compensation and benefits harmonization, data management and the integration of people into organizational reporting relationships. The team created extensive timelines and it all had to flow together.
One of our primary goals was to facilitate a smooth integration, while maintaining the well-being of employees. There was a high level of complexity in transitioning the Human Resource operations and service delivery into HP’s systems. I was on a project team that was virtual and global; I discovered that there’s a high degree of variance across the globe in all of the operational aspects of HR, especially when country-level legislation is relevant.
Jennifer: Tell us about some of the more successful processes the HP Human Resources team used to ensure a smooth integration.
Dave: Two processes that I think were especially effective were:
1) We conducted mini-employee surveys during the on-boarding and integration process. This was particularly useful during the first few months of an integration when some of the biggest changes were taking place. We wanted to know: How was the integration going? That way, we could diagnose any problems as they were occurring. Because we did these surveys with all of the various employee populations being integrated, we could also compare the relative success of different integrations and improve our processes over time.
2) We had access to communications professionals to assist us on projects. Members of the HP Communications team could be brought in as needed to provide communications expertise for the M&A team. They were instrumental in helping us sort out the myriad communication tools at our disposal: newsletters, micro-sites with FAQ’s, in-person communications, and town hall forums. They would strategize with the HR team to help us form the strongest possible communication strategy for the employees.
Jennifer: As you worked your way through this process, what were your key lessons learned?
Dave: The key learning for me was how important HR really was to the M&A process. My internship gave me the opportunity to see the due diligence and employee integration process up-close and I saw the value that HR added.
Jennifer: Why do you think HR is so valued in the M&A process at Hewlett Packard?
Dave: From my perspective, the executive leadership of the HR function at HP has been very effective in driving HR transformation. In particular, Marcela Perez de Alonso, (Hewlett Packard’s EVP of HR) has always been interested in moving HR forward. The human resources function is aligned with business objectives and has a close working relationship with business unit leaders. I also observed the ways in which HR was actively innovating and reinventing itself through the use of data and analytical rigor. A great example is workforce planning. HP has developed a strong center of expertise that uses analytics and modeling to align HR areas like recruiting and development with the overall business and financial strategy.
Jennifer: Now that you’ve had a birds-eye view on employee integrations, what observations do you have for executives who are considering an acquisition that includes employee talent?
Dave: Involve Human Resources early. The earlier, the better. The worst thing that can happen is for HR to find out about an acquisition from a company-issued press release. To do it really effectively, HR needs to be involved during the due-diligence stage—not only to identify HR-related costs and risks, but also to develop plans for retaining employees and integrating them into the organization effectively.
I also think that executives should remember the cardinal rule of large-scale change: communicate about the process as honestly and openly as possible. As with any change management process, it’s incredibly important for securing people’s trust and buy-in.
Jennifer: Thanks, Dave for providing your valuable insights!
Dave: Happy to do so.