M & A Services

Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom. Viktor E. Frankl

In implementing an M&A, most managers focus on the financials. But success often hinges on how you deal with people issues and cultural integration.

Leveraging Synergies: The Road to Merger Success.

Acquirers seek to satisfy merger goals in financial services by offering a wider range of products and services to customers, broadening geographic reach and achieving greater economies of scale. Accomplishing these implementation objectives, however, depends on smooth and effective integration. This entails channeling the skills and enthusiasm of employees, merging the intellectual capital of both organizations and streamlining the way in which the new business operates so that it can rapidly overcome hurdles and take advantage of synergies and reduce unit costs.

In short, success depends on aligning the people, organizational and cultural assets of the new entity. Once a deal is sealed, nothing is more important to a successful outcome than effectively managing these “soft” issues. In the heat of a merger or an acquisition, financial services executives naturally focus on financial due diligence, risk assessments, analyst and investor relations, and the ways in which the new entity will create shareholder value. But the hurdles to success can relate directly to such people issues as workforce management and cultural integration. Finessing these soft issues is the hard part of integration and has the strongest influence on a deal’s long-term success.

Few HR professionals have the specialized knowledge needed to uncover all the people-related financial risks, which can range from unfunded pension plans to potential class action lawsuits. And even when they do have the knowledge, HR is on the hook in other areas such as defining employment terms for the target’s leadership team, structuring employee retention and severance packages, redesigning the organization structure and more. That makes human capital due diligence an intense, short-term requirement – one that can shape the organization’s future, for better or worse.

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