Over the past decade we have heard a lot about how Human Resources must get a ‘Seat on the Board’.

This would imply that HR practitioners should be involved in all strategic issues such as Mergers & Acquistions (M&A), downsizing, strategic planning and so on. The move in this direction has been inchoate, but it has been happening.

Now, however, we are seeing that the progress that has been made is being rolled back a little by the current economic crisis. According to Towers Perrin, companies are rushing through M&A deals, and along the way the softer issues, like company culture, are being forgotten.

If HR were really on the board, this would tend not to happen.

According to the Towers Perrin research, the average duration of Mergers & Acquisition deals in 2007 was 142 days. In 2008 it dropped dramatically; to 80 days.

Increasing the speed of acquisition is natural and normal in the current climate. If you don’t move quickly enough you are likely to lose the race to another company that wants to buy cheap. But the downside of this snatching, the research suggests, is that some issues, like execution and succession planning, are being pushed through at speeds considered unthinkable (my italics) even a year or so ago.

Towers Perrin suggest more haste, and less speed.

After-the Fact Due Diligence

Worse than the increase in speed, they suggest that proper due diligence is now an after-the-fact process, which is an obvious contradiction in terms. Due diligence is now the means by which companies determine what they have actually bought.

Finally, they suggest that the soft issues, like cultural integration, key talent acquisition & talent retention, are simply being put aside until the acquisition is completed. What is important now is to snap up any bargains that are on the table. Even if the company is not exactly what it claims to be, it is likely to offer a lot for a little.

They point to 3 critical issues are being missed, and that must be kept in mind during the M&A process:

• Retain top talent. The most talented people want to work for top companies. Determine high performers; pay them what they’re worth, and determine additional incentives. You’ll be ahead of competitors that are quick to clean house and inadvertently lose key employees
• Be transparent. Communicate your vision for the company and what changes are on the horizon. The sooner employees know the strategy, the sooner they can become a driving force behind it.
• Manage stakeholder expectations. The hastiness of current M&A deals has led to even more uncertainty and questions upon change in control. Make sure stakeholders understand that the organization will need time to solidify integration details after the deal closes.