Cracking the code: HR's key role in making M&A deals work

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Mergers and acquisitions are integral to corporate growth strategies. However, the failure rate (a staggering 70% is an oft-cited statistic) casts a shadow. The key culprit? Incompatible corporate cultures. But despite the low rate of success, two facts are irrefutable: 1. Deals will continue to happen, since most large firms use M&A as a component of their overall growth strategy, and 2. Pulling off a successful deal, all the way through to integration is extremely difficult.

Companies must beat the odds to succeed. While people are indeed an organization’s greatest asset, they can also be a significant liability (reflected in the financial statements as the overall employment cost, including the cost of all related benefit plans). If employees continue to perform well, they can drive future organizational performance; if they don’t, they can be barriers to such improvements. Therefore, HR must be brought under the deal “tent” as soon as possible during the merger process.