When two CEOs amid merger negotiations are shown on the nightly news engaging in congenial banter, a viewer might assume that all of the critical parts of the deal have been hashed out. But a study from Watson Wyatt Worldwide challenges that notion.
Factors which the majority of CEOs said are "critical/very important" in merging two companies are:
- Retention of key talent - 77 percent;
- Communication - 71 percent;
- Retention of key managers - 69 percent; and
- Integration of corporate cultures - 52 percent
The study, which can be viewed at http://www.watsonwyatt.com, is based on responses from top executives at 190 companies in the U.S., China, Hong Kong, Korea, the Philippines, Singapore and Brazil.
"The legal, financial and operational aspects of M&A deals traditionally have received the greatest attention," says Tim Galpin, WWW global practice leader of M&A services. "But executives who have been through the merger process are recognizing that managing the human side of change is critical to maximizing deal value.
The WWW study, "Assessing and Managing Human Capital - A Key to Maximizing Deal Value," strips the M&A management process down to some rather simple rules, such as paying attention to the "me issues" (will they lay me off, etc.?).
Corporate communicators can help executives keep those concerns in check through conducting employee surveys, creating talking points with consistent messages and updates, and refraining from corporate propaganda.
A simple test for eliminating propaganda is to ask whether the message provides the "how" as well as the "why."
(Watson Wyatt, 301/581-4538)
The M&A Deal Makers
Watson Wyatt's "Assessing and Managing Human Capital - A Key to Maximizing Deal Value" study includes insight from 190 global executives about why M&As were successful. They cited:
| Leadership | 73 percent |
| Well-planned communications | 51 percent |
| Early management of "the issues" | 44 percent |
| Expedient integration | 41 percent |
| Cultural compatibility | 35 percent |
| Mutual agreement of "road map"by partners | 32 percent |
| Shared responsibility of costs | 9 percent |