In addition to the importance of assessing strategic fit and conducting careful financial due diligence, the following steps are representative of the approach to M&A integration that Hewlett-Packard has developed.
1. Conduct human capital due diligence — obtain structured external (for example, independent) assessments of the top management team. Depending on the size of the companies involved, the assessment might involve the C-level plus one, two or three levels of the organizational chart.
2. Invest to develop ways to identify and objectively assess the tacit elements of the companies involved. This might include key elements of each company’s culture, history, and any “sacred cows” that would be risky to confront too soon. Additionally, this should involve understanding the acquired company’s “real” practices (as opposed to what written documentation or the organizational chart suggests). For example, how do decisions really get made? Where do power and influence really lie? Who are the leaders that are sitting in positions not automatically part of the management team?
3. Identify the members of the top management team, and involve them in the development of an on-boarding plan to provide a structured approach to their roles in the integration with milestones to gauge progress.
4. Develop and implement a system to capture employee input, and use the findings to track progress on issues of concern for them.