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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 “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 a strong business case for involving human resource partners early to prevent problems later. 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:
Stay tuned for more on this M&A People and Culture series.