When a corporation pours multi-million dollar investments into another company that has unique assets (the acquired), this is considered an acquisition. The new leadership team should include a few people from the acquired company for a short period of time to ensure a smooth transition. This timeframe enables the acquiring parent company to obtain as much knowledge to proceed without interruption with no reliance on the acquired company’s employment sources. Professional sports teams are the best and simplest examples of acquisitions. A new General Manager (GM) takes the helm and releases all the staff brought in by the previous leader and hires his own loyal crew to work hard and protect his best interest. In this case a transition is not required because the skills between the two regimes are transferable and easily replaceable.
Many employees who don’t want to face the reality of a
take-over mistakenly call an acquisition a merger. A merger is when two companies combine similar
resources, methodology, and practices to create a uniform direction and provide
an almost equal blend of assets, capital, inventory, customer base. If one company provided or purchased billions
of dollars in another company’s stock, it is an acquisition not a merger. If two companies provided nearly half of the
funds and resources to formulate one company, it can be considered a merger.
Nonetheless, deciding who to keep is based on three factors:
1) loyalty analysis, 2) influence and 3) impact to revenue.
Loyalty. Loyalty
analysis is a complete review of whom and what the employer is dedicated. This can be a specific person in charge or existing
processes in place. If someone is
dedicated to the old processes and blocks the implementation of new processes, remains
defiant with the new leadership and complains about conforming to existing staff,
or does not want to assist or work on teams with the new regime, a package
should be created to encourage the employee to leave.
Influence. The influence of an executive or manager must
be accounted for when creating the direction of the new company. When a company is acquired, normally the CEO
of the acquired company already has a buyout package and is retained a few
months to persuade his old subordinates that the holding company’s executives
have tremendous strengths in growing the company, the new direction is best for
the company, and their career paths will skyrocket in the industry because of
the corporate change. While this is normally
an untruth, the parent company uses the influence to their advantage to
involuntarily solicit as much buy-in as possible to gain the knowledge to
release the maximum amount of people in non-crucial areas. In an assessment on which management to keep,
the influence to turn people in the new direction is key in keeping them
employed.
Revenue Impact. Identifying
which employees’ work contribute to the bottom line provides a purview into the
areas of the company that should not be disrupted. If a manager and his subordinates are helping
to create new profitable solutions on time, in budget and with the existing
number of resources, he is a keeper. If
the role requires research or completing mundane tasks that do not feed into
revenue increase, a package can be created to remove these low-hanging fruit.
With these three assessments, these tips should help answer
the question – to be or not to be employed.
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