There's been a lot written in the past 2 decades about human capital when it comes to acquisitions. After all, companies buy competitors not only for intellectual property and market share, but also for economies of scale. "Economies of scale" is code for "via this acquisition, we can slash $100M in duplicated payroll costs".
Ugh... economies of scale = fear, backstabbing and guys ending up in the lifeboat instead of women and children, Titanic-style...
With that in mind, there are winners and losers in every acquisition. Most of what's been written focuses on the resulting purge and layoffs that address duplication and cashing in on the aforementioned economies of scale.
But somewhere in the deep underbelly of the company, there are folks trying to make a call whether life is better or worse under the new company, and if the new company fits their values and world view. That's especially problematic when the folks trying to make the call hold the keys to your competitive advantage. The issue is currently in play at the former Palm, as some key people who could have stayed with the HP/Palm combo (HP recently bought Palm) decided to get the hell out of HP. More from TechCrunch:
"Back in August, while we were in the middle of confirming an exodus of talent from Palm after their acquisition by HP, I specifically asked them about the status of two guys: Ben Galbraith and Dion Almaer. Palm refused to say anything about them. Perhaps now we know why.
So let's break this down. The two cited former Palm employees who chose to jump from HP/Palm are high profile folks, but there are hundreds of duplicates of this morality play at lower levels at HP/Palm and in any acquisition of significant size.
Those folks are trying to make a call on whether they should stay or not. Additionally, many more that you want to retain are going nowhere - they're happy and not pre-dispositioned to move.
How do you figure out who's likely to bolt on you once an acquisition goes down and who you need to invest in to have the best shot at making them stay?
If it were me, I'd do the three following things:
1. As part of the due diligence, I'd get multiple data points down and across the organization on who we absolutely can't lose in the company we just acquired. Multiple data points - not just their manager, because let's face it, that's often tainted. But too often that's all that organizations do - simply get a list from the manager.
2. I'd then ask my OD and/HR folks to do an analysis of every one of those individuals using their LinkedIn profiles. The main question in play - does the background and career arc for each person indicate they are a flight risk? Do they have a history of jumping when things get more corporate? Do they have a history of jumping for other reasons that would indicate they won't put up with the acquiring entity long? Subjective? Yes, but I could do this in 2 days across 1000 people if you give me the list and most of them have LinkedIn profiles or you give me resumes.
3. I'd then call Josh Letourneau of Knight & Bishop and ask him to use our email servers and other tools to tell me who the most connected and active people are on that list with the outside professional world. Some custom Social Network Analysis (SNA) in this step, but I'd want to know who's most connected and active, because if I know that, I likely know who could leave tomorrow and have a lateral gig by the end of the week.
Step #1 builds the list of who I need to worry about. Steps #2 and #3 give me data to tell me who's at risk. Score a high flight risk in both #2 and #3, and you get the retention attention via more ego stroking, stay bonuses, etc. Score high in #3 alone, you're next on the chart - you're a stealth one - you're building your network to give you options even though your past doesn't suggest you're going to jump. Score high in #2 but not in #3, you get some attention, but you're at the end of the line behind the first two profiles because your ability to flee is not as high as the others.
Score low in both #2 and #3 - thanks for being a loyal corporate citizen. I hope we get to keep you for as long as you want to stay. When it comes to retention bonuses, however, "no soup for you".
That's right, I'm using your email, maybe even phone and web traffic to determine if I need to be concerned at a high level about retaining you. In an ironic twist, if I can do the analysis without you knowing, I have no intention of paying the people most likely to be loyal.
It's a crazy world, but if I were the Darth Vader of HR for the acquirer, that's how I would roll, assuming I could deal with the inconsistencies and the word of mouth problem in the organization (those most solid getting nothing - a bit of a PR problem for any young Vader of HR).
Don't hate me because I've got a plan. How would you do it if you had limited resources and wanted max retention of your best talent?