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Role of Training in Successful Mergers and Acquisitions

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Role of Training in Successful Mergers and Acquisitions

Have you heard about the recent merger announcement of Pfizer and Allergan? With the transaction valued at around USD160 billion, it undoubtedly has become the talking point over the past few weeks. The announcement has also sparked a great deal of debate about corporate inversions, loss of jobs in the country and more importantly, whether the deal will take place slickly at all! So much so, this became the talk of the town even in the Presidential debates with most of the parties unanimously denouncing the move by Pfizer to move its headquarters outside of the US.

In such fluid situations when the Internet is abuzz with theories, extrapolations and recommendations, there could be needless stress, insecurity and uncertainty among employees which can be totally avoidable. Very often, but for a few key stakeholders and senior management, rest of the employees are not in the loop and when this happens there is a probability of apprehensions and doubts among the shareholders and other stakeholders impacting the deal itself. The need to include employees at all levels, at varying degrees cannot be exaggerated. This has to be done through proper nurturing, and communication; something a carefully planned training program can accomplish.

Typically, there are three phases to any merger and acquisition.

  1. Before the Merger – Acknowledgement and Acceptance phase
  2. Just after the merger – the Transition phase
  3. Gestation phase

Training plays a key role at every stage and I would like to share how.

Acknowledgement and Acceptance Phase:

That the merger will happen, is a certainty. Now, how do you communicate this across to employees? Most employees will want to know why the merger in the first place? What does it mean to them and their jobs? Will they probably lose their jobs? Will employees be shifted to different roles, will there be relocation options? These are certain aspects that companies can address during training.

Transition Phase: 

Once the deal is done, how will it be executed? This phase involves the practical and initial changes that are made as a part of the merger. The actual implementation is done by the mid-level managers and they are likely to have many queries. What would the organizational structure be? How are the processes and procedures integrated? Are there any changes in the roles and responsibilities of individuals? If so, what will they be? How to motivate employees to support and involve themselves in this phase? These are a few questions that have to be addressed during this transition phase.

Gestation Phase: 

Typically, once the deal is announced, there is a timeframe for its execution. For example, the Pfizer-Allergan deal is expected to materialize by the end of 2016. The merger has a gestation period of 9 months and a lot can happen in the meantime. The US government could change laws that could affect the deal. But, most importantly, the shareholders of either companies could vote against the deal too. Therefore, communicating and educating the shareholders of both the companies, becomes vital. During the gestation period, the companies concerned will have to monitor external as well as internal situations and address the concerns of shareholders so that they are in line with the vision of the company’s goals. 

What is the Best Training Method?

When we consider the example of Pfizer and Allegan, they have employees all over the world and in some way or the other, they will be affected by the changes that are taking place in their companies. Therefore, they all have to be taken into confidence and educated about the rationale, purpose and motive of the deal and how it affects them individually. Can this be done through face to face classroom training? Certainly not! To execute such an initiative and notably, to ensure that the message is consistent across different regions is difficult. Therefore, online training or e-learning would be the best option. Here are more reasons. E-learning,

  • Allows reliable and steady flow of knowledge as per the requirement. For example, just before the deal is announced, after the deal and during the gestation period.
  • Makes it possible to sieve the content and share with target groups based on their needs. For example, employees and shareholders have different expectations and they can be provided information accordingly.
  • Aids employees and key stakeholders to feel included and be supportive of the initiative and inhibits rumors and needless gossip. It also provides opportunities to address various reports floating in the media.

Training is, therefore, an essential ingredient in Mergers and Acquisitions and the best way to execute it is through a long-term online training program that involves multiple stakeholders, who have different purposes for knowledge acquisition.

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