People integration: Creating and sustaining value in Mergers & Acquisitions

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People integration: Creating and sustaining value in Mergers & Acquisitions
Integration Playbook for Human Resources Practitioners
Prepared and submitted by Russell Podgorski June, 2015
Russell Podgorski is the Sr. Manager, Executive Recruiting for Providence Health & Services. He brings over a decade of
experience recruiting executives and physicians for multi-billion dollar integrated health care delivery systems. Russell
specializes in creating and improving recruiting processes to drive strategies and value into the business. He developed a
successful executive search process that delivered strong results using Lean & Six Sigma techniques across a major health
system. Mr. Podgorski also built solid organizational capabilities by leading teams that recruited talent as the company
restructured or initiated a M&A strategy. Russell holds a B.A. degree from Columbia College in Columbia, Missouri and a
Master of Health Administration degree from St. Joseph’s College in Standish, Maine.
Copyright © 2015 Russell Podgorski. All rights reserved.

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List of Tables & Figures
Table
Number Table Content Phase Page
1 PIC Team Readiness Matrix I 7
2 Liability Analysis I 9
3 Key Leadership Impact I 9
4 Cultural Assessment Tool I 10
5 People Risk Mitigation Matrix I 11
6 Due Diligence Risk Dashboard II 20
7 Cultural Compatibility Assessment Scorecard II 16
8 Talent Assessment Form II 18
9 Change Management Planning Template III 27
10 RACI Model for Change Process IV 28
11 Leadership Change Management Checklist IV 29
12 Communication Project Plan IV 32
13 Cultural Mirroring Model IV 40
14 Post Implementation Review V 54
15 People Integration Planning Dashboard V 60
16 People Integration Dashboard V 61
17 People Dashboard V 62
Figure
Number Figure Content Phase Page
1 Due Diligence Checklist II 19
2 Organizational Design Model III 35
3 How to Create Value in a M&A I 13
4 Accelerated Recruiting Model IV 49
5 Integration Survey V 55

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Introduction
This resource provides an explanation of a mergers and acquisitions (M&A) playbook
that includes a comprehensive people integration plan. It also describes the roles and
responsibilities for human resources and organization development departments necessary to
support and implement the people integration activities.
This document also describes how high performing organizations that engage in M&A
can create more value by improving how people are integrated into the newly formed entity.
Failures in people integration strategies result in a failure to retain and motivate key people from
the acquiring and target organizations, impacting the organization’s ability to achieve its
financial and strategic objectives. Organizations that are adept at integrating people realize
increased employee engagement and decreased negative turnover. Playbooks that focus on
people integration play an extremely important role in merger and acquisition success.
Case for Including People Concerns into M&A
Successfully integrating people after a merger or acquisition is announced continues to be
elusive and challenging for many organizations. It is no surprise that when key people are not
integrated successfully, companies find it difficult to achieve their intended strategic and
financial goals (Schweiger, 2002). Most M&A objectives are never realized because the people
integration efforts are managed very poorly. The failure rates are estimated to be as high as 70%
in some cases (Omri, 2011). What is even more troubling is that 85% of major organizations
surveyed indicated that their human resources professionals were underperforming at helping the
business to integrate people (CEB, 2006). Mercer Management Consulting conducted research
and discovered that companies utilizing people integration playbooks through the various phases

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of a merger were 50% more likely to create value for their respective organizations (Tetenbaum,
1999).
Integration Playbooks
Successful organizations approach a M&A and people integration in a very systematic
and methodical manner (Harvard Business Review, 1998). To that end, companies use
standardized, but adaptable integration playbooks that contain step-by-step detailed instructions
with tools, templates, checklists, process documentation, and tips to cover each major phase of
the M&A from beginning to end. They should be standardized because many key tasks, goals,
and processes are repeated in each M&A, but vary in magnitude and scope depending upon the
unique features of each M&A.
Human resources integration playbooks should typically be stored in centralized,
collaborative repositories, and should include activities such as organizational design, cultural
assessments, cultural integration tools, communication strategies, plans for the retention and
recruitment of key people, talent assessments, employee engagement techniques, and much
more. Once centralized, the playbooks can then become a resource to educate leadership about
people integration activities, outcomes, communicate status, and roadblocks of human resources
tasks, and facilitate the definition of human resource professionals' skillset requirements and
level of effort for the M&A project.
A comprehensive human resources integration playbook will include objectives,
activities, and deliverables. Each section of the playbook must be assigned to a human resources
subject matter expert to own and manage the playbook content, utilizing the described tools and
templates. The section owner must advise on the magnitude and scope of each task in relation to
the unique scope of the M&A, to ensure thorough but efficient coverage of the sections’

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requirements without unnecessarily overtasking the organizations’ resources. Additionally the
owner should be responsible for making sure that their assigned section of the playbook is
updated with status and progress notes on a regular basis. Human resources professionals play a
role in all five phases of a M&A:
1. Target Identification & Strategy Formulation,
2. Due Diligence,
3. Integration Planning,
4. Integration Implementation and Management, and
5. Integration Evaluation.
The following sections describe the five M&A phases and what people integration playbook
tasks should be included in each phase. Then each section clarifies those tasks, defines human
resources professional’s roles and responsibilities, and suggests helpful tools that can be used to
facilitate the described work. Each section of the playbook will conclude with helpful
instructions for leaders in the business to guide them through the process steps of each M&A
phase.

6M&APhaseIofthePlaybook–TargetIdentification&StrategyFormulationM&APhaseIofthePlaybook–TargetIdentification&StrategyFormulation
Phase I – Target Identification & Strategy Formulation
In the first phase of any M&A, the target company is identified, strategies are
formulated, and initial high level plans are made. A M&A may fail due to lack of people
integration planning. In order to reduce the opportunity for failure, business executives must
involve the chief human resources officer as early as possible in the planning (CEB, 2006), so
that everyone has a common understanding of the financial and strategic goals. Once the chief
of human resources understands the M&A scope, that person must communicate a shared
vision and goals with the human resources professionals involved in the M&A work. The key
people integration deliverable for phase I, is to create a highly functioning human resources
team that is empowered to manage and implement the people integration playbook.
Create a dedicated and qualified human resources M&A team
The chief human resources officer must create a highly functioning, dedicated team to
support the people integration M&A activities.
Select a strong Integration Leader. The Integration Leader will be responsible for the
overall execution of the plan and will ultimately be accountable for project outcomes.
Additional duties include human resources team selection, assessing/managing and increasing
team skillsets as needed, collaboration with stakeholders from the target company, and keeping
the project on time and under budget (CEB, 2006).
Identify a dedicated core team. The Integration Leader must determine needed skillsets for
the specific M&A and then obtain adequate resources to achieve goals by the required
timeline. Best practice companies include a diverse set of subject matter experts on their core
teams: project managers, human resources Integration Leader, benefits specialists,
organizational development personnel, business partners, and internal communications

7M&APhaseIofthePlaybook–TargetIdentification&StrategyFormulation
professional. For the purposes of this article, the people integration core team will be referred
to as the PIC team. Additionally, depending on the complexity of the M&A, other experts may
be needed from compensation, payroll, immigration, relocation, recruiting, and/or training
(CEB, 2006).
Educate the team. The chief human resources officer must ensure that the PIC team fully
understands the M&A schedule and plan, its objectives/goals, and any financial or cultural
issues already identified. The PIC team must also understand the M&A playbook contents, its
role in defining the structure of the human resources and people integration activity, and its
scalability to the current M&A. Additionally, the team should be made fully aware of their
roles and responsibilities, as defined by the M&A playbook, including communication and
documentation expectations. The playbook must be reviewed and updated as needed to
reference shared tools, best practices, project charters, training documents, people integration
plan and other related resources (CEB, 2006). The human resources department typically uses
the following comprehensive dashboard to track and monitor their readiness to support a M&A
from a resources and skill set perspective.
Table 1
Core & Flexible PIC Team Readiness Matrix
(CEB, 2006)
Functions Compensation Communications PM Payroll Immigration Recruiting Training
Names of resources
Primary or secondary
work priority
Total time
commitment
M&A busiest phase
Issues that drive
additional resources
Years of M&A
experience
Capacity of current
resources

Best practice and top performing human resources departments work with the business
to assess people related risks that can make the integration fail if not evaluated early in the
process. The risks at this Pre-Deal stage are evaluated at an extremely high level, but
nevertheless provide important insight to the acquiring company so they can make informed
decisions. The aspects that are evaluated include potential human resources liabilities,
engagement levels of the most senior level executives and impact of losing them if they left the
company, high level cultural assessment, and employee risk mitigation (CEB, 2006).
The human resources Integration Leader plays an instrumental role in obtaining the
information from the target company and will share it with executives at the acquiring
company. The objectives of the tools and likely places the acquiring organization can find
them are also included below.
Objectives
 Account for potential human resources compliance and legal liabilities
 Evaluate impact of losing key leaders and assess their intentions
 Determine costs associated with retaining key leaders
 Analyze high level cultural assessment
 Assess and mitigate people related risks such as retention, turnover, and vacancy rates
Sources of information
 Public records via the Internet and press releases
 Legal documents available to the public

Experienced M&A PIC Teams use the following sample dashboards to target the people risks
that can derail the integration prior to acquiring the target company.
Table 2
Liabilities Analysis of the Target Company
Liability
Approximate
Cost Comments
Health Insurance $50M No major concerns
Other Benefits $15M No major concerns
Lawsuits $5M Significant risk
Pensions $25M No major concerns
403(b) $100M Moderate risk
(CEB, 2006)
Table 3
Key Leader Impact of the Target
Position Plans Impact Cost to retain
Chief Executive Leave High performer $500,000
COO Stay High performer $300,000
CFO Stay Low performer $250,000
CPO Leave Low performer $200,000
CNO Leave Low performer $175,000
Chief Strategy Officer Stay High performer $400,000
Total $1,825,000
(CEB, 2006)
There are two cultural assessments most successful organizations conduct during a
M&A. The first one happens at the Target Identification & Strategy Phase I when the deal is
being initially evaluated with an emphasis on people and what the impact will likely be at the
integration stage and if the issues discovered will deter the organization from creating value.
The second cultural assessment happens at the Due Diligence phase. The cultural assessment
process at Due Diligence is focused on the people aspects as well, but includes a series of
varied organizational cultural components that are assessed.

The following Cultural Assessment Tool of the target company can be used to compare the
people components of the acquiring and target companies that can prevent the new
organization from creating value and realizing business synergies because of significant
cultural differences. Organizational Development professionals play an instrumental role in the
cultural assessment process.
Table 4
Cultural Assessment Tool of the Acquiring & Target
Companies
People Dimensions Difference
Impact to the
Integration
Impact to
Value
Creation
Key Leader
Differences
Individual contributor or team
based focus High Low Medium Low
Performance improvement
emphasis High Medium Medium Medium
Customer focus High High Low High
Promote internal talent from
within vs. external hiring Medium Low Low Low
Technical hard skills vs. soft
skills Low Medium Medium High
Employee development Low High Low High
Leadership development Medium Low Low High
Employee mobility Low Medium Medium High
Compensation philosophy
(market leader or lagging) Medium High Low High
Performance management
systems High Low Low High
Employee engagement focus High Medium Medium Medium
Problem solving approach
(individual or consensus
driven) High High Low Low
Employee performance vs.
tenure Low High Low Medium

11M&APhaseIofthePlaybook–TargetIdentification&StrategyFormulationM&APhaseIofthePlaybook–TargetIdentification&StrategyFormulation
(CEB, 2006)
To help gain early insights into the people risks at the target company it is necessary to
review employee metrics and key human resources performance indicators. The information is
captured on a matrix (like the one below) and allows the PIC team to address issues that could
adversely impact the successful integration of the acquiring and target companies. Here is a
sample list of plausible people issues that can be recorded on the matrix.
1. Retain key department directors and managers because leadership changes could
compromise the technology implementation
2. Important to retain IT analysts to ensure the impending technology implementation
goes smoothly.
3. High vacancy rates in critical nursing areas.
4. High employee turnover rates in the emergency department
Table 5
People Risk Mitigation Matrix at Target Company
People Issue Impact Risk Level Actions PIC Team Owner
Leadership retention Integration High Short term retention bonuses provided
Compensation,
Organizational
Development, and
People Business
Partner
IT analyst retention Integration High
Short term retention bonuses provided
and employee engagement surveys
conducted
Compensation,
Organizational
Development, and
People Business
Partner
High nursing vacancy
rates
Creating
Value Medium
Use contract labor in the short term and
develop candidate pipelining tactics
Organizational
Development,
Recruiting, People
Business Partner
High employee turnover
rates
Creating
Value High Conduct employee sensing sessions
Organizational
Development,
Recruiting, People
Business Partner
(CEB, 2006)

12M&APhaseIofthePlaybook–Leadership&StrategyFormulation
Business Process Guide for Leaders: Helpful Tips
During a M&A leadership needs to be bold, courageous, and transparent at all times. They
need to stand behind decisions and accept responsibility when they make mistakes. Leadership
needs to model the organizational Values when making decisions. They need to believe in the
acquisition and create an inspiring Vision for everyone in the organization. Leadership needs
to ensure communication strategies and plans are established as well as effective mechanisms
to facilitate it. The financial and strategic goals of the M&A deal need to be clearly defined
and communicated to all stakeholders. Strategy formulation is imperative well before the
integration takes place. Leadership is responsible for establishing and communicating the
strategy to the working teams downstream. When the objectives are clear it will then be
important to establish key performance indicators and success measures to track and monitor
progress. Financial objectives are very important as well. Some of the common M&A financial
and strategic objectives include market consolidation, addition or extension of new products or
services, entering a new geographic market, and vertical and horizontal integration. After the
financial and strategic goals are met leadership needs to establish the synergies needed. The
most common synergy is referred to as cost synergy and this happens through the reduction of
costs and achieving economies of scale when the two organizations come together. Eliminating
redundant positions in the new organization is one example of a cost synergy. Market power
synergies are another form of synergy that companies use as well. A great example of a market
power synergy is the elimination of competitors from a market (Schweiger, 2002).

13M&APhaseIofthePlaybook–Leadership&StrategyFormulation
Synergies allow the organization to achieve the financial and strategic goals of the M&A deal
and thus it is essential that leadership clarify what synergies are needed at the start of the
process. Synergies are captured through the integration process and this is why integration
must be planned and executed for organizations to be successful. When the strategic and
financial goals are met and synergies realized through integration it enables the organization to
create value for its customers. The following illustration captures the process of creating value
in a M&A or organizational restructure. It is important for HR and the business to keep this in
mind as they go through the key M&A phases.
Figure 3
How to create value in a M&A
(Schweiger, 2002)
Financial &
Strategic
Objectives
Price Paid for
the Company
Synergies
Required
Integration
Successful &
Synergies
Achieved
Value Created

14M&APhaseIIofthePlaybook–DueDiligence
Phase II – Due Diligence
The purpose of due diligence is to examine the target company’s financial, compliance,
and people related risks allowing the acquiring company to establish a bidding price. During
this phase, the PIC team should help with the due diligence assessments of the target company
in three ways: (1) assess the human resources financial and regulatory compliance health, (2)
complete a cultural assessment, and (3) conduct initial talent assessments of the target
organization’s leaders for retention purposes.
Identify financial and compliance risks of the target company
During phase two, the PIC team surveys primary contacts at the target company to
obtain detailed information about their financial and regulatory compliance health regarding
human resource concerns. All of the tools and documents used in Phase II should be
incorporated into the M&A playbook as well as helpful suggestions to support the work. For
example, to enable a more streamlined communication approach, it is best to identify a single
point of contact at the target company and level-set expectations regarding accountability,
timeliness, amount of detail, and nondisclosure agreements. Once expectations are set,
standardized human resources due diligence survey templates should be provided to the target
company for completion. The due diligence survey should contain questions about general
organizational size and make-up, benefits details, payroll expenditures, talent succession plans,
number of open positions, voluntary turnover data, organizational charts, policies, union
contracts, employment agreements, employee engagement data, equity plans, pending
litigation, retirement plan information, and severance agreements of leaders (CEB, 2006). An
example Human Resources Due Diligence Questionnaire (Figure 1) is included at the end of
this section. Table 6 is a sample dashboard that can be used by the human resources

Integration Leader when meeting with other leaders to review financial and compliance risk
information gathered during the due diligence process.
If the target company is uncooperative during the due diligence survey process, then it
is the responsibility of the Integration Leader to intervene, and seek assistance from senior
executives as needed. Once the survey information is returned, the PIC team must analyze the
data to identify potential problem areas and alert the M&A leadership, so that mitigation
strategies can be developed. Information discovered during the Human Resources due
diligence survey could potentially impact the decision to continue with the M&A, so it is
critical to compile the information into an executive summary that is easily understood by the
M&A leaders. Oftentimes, the PIC team and Integration Leader will be asked to provide
consultation on mitigation strategies. Some of the more likely mitigation strategies could be
incorporated into the M&A playbook as the business gains experience over time.
Complete a cultural assessment
A well-performed cultural assessment during the due diligence portion of a M&A can help
to avoid cultural clashes between the two organizations when they come together and thereby
enhance the M&A’s ability to achieve the intended strategic goals. The culture of an
organization influences employee behavior, processes, and overall organization structure
(CEB, 2006). The cultural assessment must analyze communication processes and styles,
leadership philosophies and practices, and performance measurement systems and values.
Seasoned organizational development staff on the PIC team should use focus groups and
interviews at all levels of the company to evaluate the cultural compatibility of the target
organization.

16M&APhaseIIofthePlaybook–DueDiligenceM&APhaseIIofthePlaybook–DueDiligence
The cultural assessment of the target company must be compared to the culture of the
acquiring organization. Additionally, the cultural assessment will be used in later phases of the
M&A to build integration and communication strategies/plans. The cultural assessment data
can be populated into a cultural compatibility/fit comparison scorecard like the one in Table 7
below to better support a review by leadership.
Table 7
Cultural compatibility/fit comparison scorecard
Cultural Fit Index
Cultural Indicator Low Med Hi
Focus on teamwork X
Change readiness X
Importance of
diversity
X
Customer focus X
Serving the
community
X
Mission emphasis X
Importance of
learning and
development
X
Change resistant X
Focus on quality X
Innovation focus X
Size of organization X
Centralized shared
services model for
administrative
functions
X
Metrics driven X
Leadership model X
Governance and
decision making
structure
X
(CEB, 2006)
The tools and templates for the cultural assessment should be in the M&A playbook. Also,
as the PIC team adjusts any tools/templates content to support each M&A, the playbook should
be updated including helpful strategies for successful completion of the M&A work: for
example how to select members of focus groups and how to conduct the meetings.
Assess and retain top performing leaders at the target company

Top performing talent, especially in leadership, helps the organization achieve its goals and
therefore it is critical to retain these people during and after M&A. It is vital therefore to
conduct talent assessments of leadership during the due diligence phase. Often key leaders and
performers will leave during the M&A process for other opportunities. Talent assessments can
help the acquiring organization target key players for aggressive retention strategies.
The talent assessment process should be managed by the organizational development
professionals on the PIC team. Any talent assessment data obtained during the due diligence
survey process should be reviewed. If recent talent assessments at the target company are not
available, performance evaluations, bonus payouts tied to goal attainment, or other related
business documents can be reviewed to determine high potential and high performing talent. If
the target company does not have that kind of documentation, then the acquiring company can
assess talent through its own interviews, focus groups, or through the attitudes, behaviors,
conversations, and presentations during the M&A process. The PIC team should collect,
analyze, and document resulting talent assessment information. Table 8 is sample talent
assessment form that can be used during due diligence.
Additionally, the chief human resources officer must help the PIC team to identify the
roles that will be critical to the success of the new organization. The information should be
organized into four distinct categories: long term talent in a key role, short term talent in a key
role, senior long term talent not in a key role, and junior talent not in a key role (CEB, 2006).
The talent needs and inventory assessments should be consolidated into a comprehensive
report for executives. Retention strategies should then be developed and implemented to
ensure key leaders do not leave the organization. Again, successful retention strategies should
be added to the M&A playbook as the PIC team gains experience in these areas (CEB, 2006).

Table 8
Talent Assessment Form
Talent Assessment Likert scale 1 (low) - 5 (high) Totals
Employee Name:
Knowledge, skills, and abilities
Technical 5
14
Hard to find skills 4
Solid experience with skill set 3
Critical contact to customers 2
Competencies
Business acumen 1
10
Politically savvy 2
Building teams 3
Customer focus 4
Role in organization
Strategic thinker 4
16
Builder 5
Organizer 4
Leader 3
Performance
Past performance 2
12
Has leadership potential 1
Serves as a mentor to others 2
Attitude about changes 3
Develops others 4
(CEB, 2006)

Figure 1
Due Diligence Questionnaire
Due Diligence Preparation
0.01 Please sign and return the attached Non-Disclosure Agreement as
soon as possible.
Please provide the following information and attach documents to
provide detailed supporting evidence.
Employee Information
1.01 Employee handbook
1.02 Mission, Vision, and Values
1.03 Number of full time
employees
1.04 Number of part time
employees
1.05 Number of agency
staff
1.06 Number of temps on
payroll
1.07 Please provide a comprehensive set of Organizational charts
1.08 Please provide a complete employee roster with job titles and
employment dates
1.09 Please provide a comprehensive set of Job descriptions
Benefits Information
2.01 Please provide Compensation pay grades
2.02 Please provide Executive compensation
2.03 Please provide detailed explanations of incentive plans and copies of
all current agreements
2.03 Please provide policy documents for Severance agreements, and data
for any active severance packages
2.04 Please provide Health insurance benefits documentation and
Summary plan descriptions
2.05 Please provide Dental insurance benefits documentation
2.06 Please provide PTO plans and balances for all employees
2.07 Please provide sick leave balances for all employees
2.08 Please provide Tuition reimbursement policy and details of payout
for the past five years
2.09 Please provide Life insurance documents and reports
2.10 Please provide Short term disability documents and reports
2.11 Please provide Long term disability documents and reports
2.12 Please provide Retirement plan explanations, and data indicating
current retirement benefits to retirees
Regulatory Compliance Information
3.01 Please provide detailed descriptions of all affirmative action plans,
and any regulatory incidents over the past 10 years.
3.02 Please provide any historical and current lawsuits over the past 10
years.
Employee Engagement Information
4.01 Please provide Turnover data for both voluntary and involuntary
dismissals
4.02 Please provide Recruitment data
4.03 Please provide data on all Employees on corrective action
4.04 Please provide data on all Employee engagement scores
4.05 Please provide Leadership development tools and resources
4.06 Please provide records of talent assessments for the past 5 years

20M&APhaseIIofthePlaybook–DueDiligenceM&APhaseIIofthePlaybook–DueDiligence
Table 6
Due Diligence Risk Dashboard
(CEB, 2006)

Leadership needs to continue communicating the financial and strategic goals as well as the
synergies needed so the various stakeholders stay focused. Leadership should review the
cultural assessment the Human Resources department put together to analyze the cultural
similarities and differences. If the gaps are significant enough leadership may need to walk
away from the deal. Many organizations have failed to achieve the financial and strategic goals
of the deal because of cultural challenges. The next step leadership needs to take is selecting an
integration champion or leader for the business. The integration leader will be responsible for
managing the integration process for the business. This role is absolutely critical because they
will help to eliminate fragmentation and will work closely with the human resources
Integration Leader. The integration leader will need to develop and maintain relationships with
people from both the acquiring and acquired organizations. The human resources department
will help to assess talent in the organization. In addition to using the previously mentioned
assessment it is recommended that leadership from the acquired organization be assessed using
a process called the Birkman model. This model evaluates talent, fit, styles, competencies, and
skills. Having this information as well as the assessment the Human Resources department
provides is helpful because it is another data point that can be used to evaluate leadership
strengths and weaknesses (Schweiger, 2002).

22M&APhaseIIIofthePlaybook–IntegrationPlanning
Phase III – Integration Planning
After the deal has closed and official announcements to the public and employees have
begun the process of merging and integrating two companies needs to be planned and executed
properly. At this step the HR teams have ownership of significant activities that are essential
for effective people integration. The depth of planning and managing the integration depends
on the size, scope, and complexity of the transaction (Schweiger, 2002).
Create a detailed human resource integration work plan and success metrics
A detailed work plan of the human resources integration tasks must be developed and
owned by the Integration Leader of the PIC team. The core work for implementation must
mirror the tasks defined in the M&A playbook. The work plan must include specificity of
tasks, due dates, and task ownership, with enough detail for the Integration Leader to oversee
the work and ensure completion of all deliverables. The Integration Leader must also make
sure that the human resources core and flexible teams understand their tasks, deliverables, and
due dates. The work plan should include the following integration activities as defined by the
M&A playbook:
 Change management,
 Communication plans,
 Organizational design development,
 Cultural integration,
 Employee engagement and retention,
 Recruiting and building organizational capability, and
 HR and Information Systems alignment

Develop success metrics that align with and support organizational strategies
Success metrics with specific goals must also be developed at this phase of the
integration, and should be based on the expected outcomes of the M&A. Employee integration
metrics must also be included to quantify success. Appropriate integration metrics might
include:
 Employee engagement,
 Voluntary turnover,
 Retention of key talent, and
 Employee performance scores.
Additionally, accountability structures such as regular status meetings and status report
documentation expectations must be established. The Integration Leader must be ready to
drive adherence to the work plan dates and escalate any roadblocks that jeopardize success.
Lack of focus and attention to details during the Integration Planning phase can result
in diminished returns for the M&A. The PIC team must build the work plan with that in mind;
however, the timing of execution in a M&A is oftentimes even more critical. This means that
the PIC team cannot allow analysis paralysis to jeopardize the timely implementation of the
M&A activities. They must remain sensitive to the needs of the organization and its leaders.
Some of the more time sensitive elements are described below.
Leverage a change management model
A M&A is a significant change initiatives and thus will need to be planned and
managed effectively to ensure value is sustained. There are several different change
management methodologies that can be used, but selecting the methodology is not as
important as using one consistently. The PIC team is responsible for change management with

regards to people integration, so knowledge and use of the methodology is a core competency.
Regardless of the change management approach used there are generally four core components
to any change management process including:
1. Planning for change,
2. Managing the change,
3. Communicating to and engaging the organization, and
4. Measuring the success of the change.
Planning for Change
 Learn about change management. An inventory of the change initiative needs to be
completed for planning purposes. Table 9 is a sample template.
 The next step in the Planning for Change phase is the need to build a business case to
manage the change process. It is important to show how change management impacts
the bottom line. In the case of a M&A you could show that a decline in employee
engagement negatively impacts achieving the strategic and financial objectives of the
deal.
 The third step of the Planning for Change stage is to clarify roles and responsibilities to
all stakeholders and communicate that information on a regular basis. The following
RACI model can be used to help clarify roles and responsibilities. A RACI template
and sample checklists for senior leaders and managers are included below in Tables
10 and 11.
(CEB, 2010)

Manage Type of Change
 The fourth step is to tailor the change strategy to the initiative. In the case of a M&A
the following action steps could be taken to customize the change initiative:
Identify M&A opportunity, Prepare the details of the deal, Get ready for due diligence,
Plan for the Integration, Manage the Integration, and Measure success after the deal.
This entire playbook is a prime example of tailoring the change strategy to support the
initiative (CEB, 2010).
Communicate and Engage
 The fifth step is to evaluate stakeholder’s change management competencies. Several
change management competencies need to be assessed including communication,
project management, strategic thinking, coaching, and adapting to change. If there are
gaps actions need to be taken to close them. Surveys and interviews can be used to
evaluate the competencies.
 The sixth step is communication. Communication is a major component as previously
mentioned though this guide. The communication strategy needs to be established and
agreed on by stakeholders. To set the strategy the following questions can be asked:
What are we trying to accomplish?, How can the communications strategy help achieve
the objectives, What do we need to communicate and by whom?, Who is the audience
and what is the timing and order of the communications?, What are the communication

vehicles that will be used?, and What will we assess if the communication strategy has
enabled us to achieve the goals (CEB, 2010)? The change management
communications always need to incorporate the following elements: background
information about the change, ask staff for their help in making the change a success,
support staff, provide specifics and not vague slogans, be as realistic as possible, create
a two-way communication channel by soliciting feedback, offer support, summarize
the key themes of the communication, and express gratitude to employees.
 The seventh step is to engage employees through the change. This happens through
informing, educating, and committing to them.
Measure Success
 The eighth and ninth steps include tracking and measuring success. These steps will be
covered in more detail in the forthcoming phases of Integration Management and
Evaluation. The dashboard on the next page can be used by the Human Resources
department to track and measure their components to the integration process. The
dashboard can be used as a project plan and helps all the stakeholders to know what
action items are required and who has to get them done. The last step requires that a
post implementation review be conducted. After the change is implemented it is
essential to conduct the review.
(CEB, 2010)

Table 9
Change Management Planning Template
Proposed Change Project Increase adoption of EMR implementation
Change Goal
Improve employee knowledge of EMR proficiency and increase
proficiency levels
Subject Instruction Comments
Company to Define Change Management
How does the organization define
change?
Troubleshoot the Change Problem
How?
How will we get people to use
the new EMR?
What?
What can we use to measure
EMR adoption rates?
Why?
Why is it so important that
people adopt and use the EMR?
Change Management Tactics & Strategies
What is the right strategy to achieve
the change goal?
Show benefits to leadership,
employees, and our patients.
Resistance to Change
What obstacles will prevent us from
being successful?
Leadership not supportive. Too
many other projects are on
everyone's plates.
(CEB, 2010)

Table 10
RACI Model to Manage Change Process
Activity
HR
Integration
Leader
HR
Business
Partner Executives Employees
Line
Managers
Support change C R A I A
Create group leading change C I R I I
Communicate with staff C A C I R
Develop change management
strategy and plans A R A I C
Provide support to managers and
staff I R I I I
Provide feedback on change C A I R A
Coach employees through change
and resistance C I A I R
Communicate how change with
impact employees C C A I R
Build change management project
plan R A C I I
RACI is defined as follows:
Responsible: Leads the activity or task
Accountable: Owns the activity
Consulted: Provides input into activity
Informed: Provided with information about activity
(CEB, 2010)

Table 11
Leadership Change Management Checklist
(CEB, 2008)
Senior Leaders Managers
Assess the organization's readiness for the change
initiative
Assess the business operating unit's readiness for the
change initiative
Review data such as employee engagement scores
in order to determine willingness to accept the
change Examine impact on the business unit
Assess the impact of the change on the
organization's culture Bring up possible risks to the team
Decide if the proposed change is aligned with
strategic goals and will ultimately help the
organization achieve goals
Align change goals with business operating unit
objectives
Define and clarify and vision of the change initiative Clarify the goals of the project
Define and align change goals with strategic
objectives Determine owners of change management activities
Decide stakeholders that will own various elements
of the change initiative
Make sue resources are in place to support change
initiative
Determine who the key champions of the change
initiative will be
Explain the business case for the change with key
stakeholders and obtain feedback
Examine and assign resources to support change
initiative Answer questions about change initiative
Develop a compelling story to help drive
communication about the change Ensure team processes are aligned with change
Explain the business case with executives and obtain
buy in Support implementation
Develop a communication plan
Monitor and assess change initiative at regular
intervals
Execute on communication plan by disseminating
information Continue to communicate about the change
Make sure the related technologies are aligned with
change
Communicate key talking points to employees and
show support for change
Implement change
Make sure communications are aligned with
organizational communications
Monitor change initiative at regular intervals and
communicate information to appropriate
stakeholders as necessary Continue to answer questions about the change
Lead outreach to show senior leaders embrace
change initiative
Schedule 1:1 meetings with employees to get
feedback about the change
Encourage communications to ensure people are
comfortable sharing feedback
Examine engagement of key contributors whose
departure may derail the change initiative
Make changes to communication when necessary to
support adoption of the change
Put together action plans to improve engaged for
disengaged employees
Review performance to ascertain if change has
resulted in improvements Coach and train employees
Assess the impact the change has had with
employees and their engagement
Monitor the adoption of the change at regular
intervals
Make adjustments when necessary to improve
employee engagement with change initiative and
drive course corrections throughout the organization
Assess the impact the change has had with
employees and their engagement

Develop and be ready to deploy communication plans immediately
Communication plans and message content must be developed early. Best practice
companies will be ready to initiate communication at a moment’s notice if needed, with a goal
of reducing employee stress and fear prior to and during the M&A. The following list reflects
the minimum communication points and can be adjusted based on the specific M&A
requirements. For organizations that frequently use a M&A as a growth strategy, their M&A
playbook should establish communication plan patterns and content standards to ensure
consistency for their stakeholders.
Pre-Deal message. If details about the merger leak, it is imperative that a high-level
announcement be on standby. This message content must include general information for
employees and factual M&A strategies with no reference to rumors of an impending deal.
Post-Deal message. To reduce employee confusion, best practice companies succinctly
communicate information about talent implications. Key talking points are shared with line
managers in advance of sending the general communication so employee meetings allow for
questions and discussion. It is vital to use multiple communication vehicles such as email,
town halls, voice mail, Blogs, intranet, and webcasts. In all messages, two way
communications must be encouraged so that employees can share their feedback.
Post-Close of the deal message. Best practice companies will tend to over communicate once
the deal is closed. Two audiences must be considered to ensure maximum success of the
M&A: customers and employees. External communications to customers are developed and
timed appropriately to improve customer retention. Employee communication must be as
comprehensive as feasible to reduce employee speculation and fear. In order to maximize

people integration effectiveness, best practice companies will cascade integration plans,
explaining how they will impact employees, and defining the roles that employees will play in
the integration process. Slotting and recruiting plans with key milestone dates should be
communicated as soon as possible so that employees know if they have jobs in the new
organization (CEB, 2006). More information about these processes are covered at Phase IV.
Table 12 is a sample communication plan template that can be used to ensure the right
communications happen at the right intervals.

32M&APhaseIIIofthePlaybook–IntegrationPlanningM&APhaseIIIofthePlaybook–IntegrationPlanning
Table 12
Communication Plan
(CEB, 2006)
Communications Activity People Objectives Due Date People Owner
Cross functional
communication plans
Delineate the different teams across the
company and organize them so they
receive the right communication Pre-Deal CPO
Executive communication
workshops
Support new executives so they are
equipped to communicate information Pre-Deal CPO
Develop key talking points for
functional managers
Equip functional managers with details
about the deal so they can answer
customer or employee questions Pre-Deal
People Integration
Director
Executive announcements to
employees developed
Inform employees of the strategic
rationale for acquiring the other
organization Pre-Deal
CPO and People
Integration Director
Blog developed for employees
Enhance two way communication with
leadership and employees Post-Deal People Directors
Deal Close announcement
developed for functional
managers
Inform managers of upcoming events
and milestones within the next 90 days Post-Deal People Directors
Deal Close announcement
developed for employees
Inform employees of upcoming events
and milestones within the next 90 days Post-Deal People Directors
Announce leadership changes
Inform employees of leadership
changes
Post-Close of the
Deal
People Integration
Director and People
Directors
Develop functional manager
communication toolkit
Equip functional managers to respond
to employee questions
Post-Close of the
Deal
People Integration
Director and People
Directors
Integration plans
communication developed and
shared with employees
Inform employees of new operating
structures and organizational charts
Post-Close of the
Deal (Within 10
days if possible of
the Close)
People Integration
Director and
integration teams
Slotting roles and staffing
direction communications
developed and shared
Inform employees of new roles in
organization
Post-Close of the
Deal (Within 30
days if possible of
the Close)
People Integration
Director and People
Directors

Optimize organizational design
The organizational development lead from the PIC team facilitates the creation of
organizational design by working with key stakeholders to understand the business direction
and vision and clarifying the structure of all levels of the organization. Design and
implementation of the top two layers of the new organization structure must be started as soon
as possible, and completed within 30 days of the deal being closed. This allows recruiting and
retention activities to commence. Additionally, when developing the organizational design,
consideration should be given to the governance structure to ensure adequate integration and
elimination of redundancy. Here are some of the key questions that prepare the way for an
optimal organizational design.
 How are the two organizations structured at this point in time? Analyze organizational
charts, management layers, job titles, and job descriptions.
 If we compare both organizations side by side what do they look like? How are they
similar or dissimilar?
 Where is the newly formed organization headed in the future?
 What do the answers to the first three questions suggest about the size and scope of the
organizational design changes needed?
 What organizational design ideas or vision are in the minds of the executives at this
time? How many management layers? Will there be a centralized support services model or
not (CEB, 2006)?

There are also four principles to keep in mind when designing the new organization (Figure 2):
1. Need to ensure there is a clear understanding of the design of both the acquiring and
target organizations. Look beyond the department names and job titles. Look at
performance outcomes, measures, and numbers of employees.
2. Do not use an organizational structure that has not been tested before.
3. Get rid of old habits that have slowed growth or prevented it from achieving its goals.
4. Stay focused on the first two levels of the organizational design in the beginning.
(CEB, 2006)
Other important issues to consider include not designing the new structure around people even
though it will be tempting to do it. It becomes more difficult as new relationships are fostered
and developed. Another mistake companies make in organizational design is that they build
huge jobs that have a narrow scope. The result is that there are too many layers designed
underneath it to get the work done. In addition to what has been shared previously companies
should use the following framework when designing the new organization during a M&A.

Figure 2
Organizational Design Model (not in sequential order)
(Deloitte, 2008)
The following provides a more detailed step by step guide to the four major activities of
organizational design that integration and functional working team should consider using when
building the architecture for the new organization.
Define Strategic Objectives: It is important that the functional operating units and PIC teams
understand the business drivers behind the deal. It is also important to clarify the strategic and
financial goals. The leaders in the departments need this information so they can design their
new process workflows. The integration and functional teams should have a good sense of
current state processes and workflows between the acquiring and target organizations. It will
be important for the PIC teams to get buyoff from the Executive Project Steering Committee or
• Transition employees in and out, train, and align them to
new organization srtucture
• Select new employees to achieve goals of new organization
• Improve new organization over time
Transform Organization
• Put together project scope and deliverables
• Determine business drivers
• Perforn diagnostics on organizations
• Define improvement opportunities
Define Strategic Objectives
• Define possible organization design theories
• Define core capabilities
• Determine key performance indicators and balanced
scorecard
• Define improvement opportunities
• Design business model
Define Core Capabilities
and Design Model
• Develop high level organizational structure, roles, and
processes
• Determine decision making model
• Define performance system and leadership profiles
• Align decision making model, processes, and structure
Design Organization

appropriate governing body as it relates to potential ideal state processes and workflows
because it all needs to align with the business strategy.
Define Core Capabilities and Design Model:Based on the business strategy and direction of
the new organization the team needs to build core capabilities to support it so that it will
achieve the objectives. This will result in key performance indicators and a balanced scorecard
to help keep the organization on track. The functional and PIC teams need to ensure they are
engaging the various department leaders to get their feedback as it relates to core capabilities.
Measuring employee performance before and after the organizational design is important to
determine if the change has resulted in improvements. An operating and decision making
model will be designed as well.
(Deloitte, 2008)
Design Organization: The design can begin at this step and it is best to focus on the two top
levels of the organization. It will be very helpful to design a few possible organization design
options that can be used. Each design should show potential benefits and risks of each option.
This phase needs to be heavily participative to ensure feedback is being shared and received
from stakeholders in the different departments. Senior leadership should be involved.
Processes, workflows, and the decision making model needs to align with the organizational
design. Because many departmental business processes will change, mapping the new
processes is critical. Each functional department should create high level workflow categories
so it is clear how the department will create value for the new organization. The functional
department should consider what it needs to do to meet customer expectations. Process
mapping should focus on what needs to be done in the business to support the strategic
objectives. It will be very helpful to assign a business process lead to assist at this stage and the

PIC team can help coordinate that. The business process lead would map the new workflows
and processes to the performance goals identified when the core capabilities were defined
(CEB, 2006)
Transform Organization: The PIC team can consult with the functional working teams or line
managers to ensure the selection processes are aligned with the new organizational design.
Other activities include assisting impacted employees through a mobility program and helping
to transition some employees out of the new organization.
(Deloitte, 2008)
It will be imperative to continually measure and assess if the new organizational design is
helping it to achieve the strategic and financial goals. This means the new design and structure
of the organization as well as the workflow processes need to be evaluated on a regular basis.
Measuring the new design is critical to ensure the structure is helping it to achieve the goals. It
is an important step as priorities change often which can impact the department. The following
questions can be asked of department leaders when workflows and processes are being
evaluated.
1. Are there functions or activities that are no longer aligned with the business strategies?
2. Are there any functions or activities that will be needed to support the business goals?
3. What functions or activities need to coordinate and collaborate much more to achieve
the objectives?
4. Are there any business processes that are no longer needed to support the business
strategy?
5. Does the department have the right people in place to help it achieve the strategic
goals?

38M&APhaseIVofthePlaybook–IntegrationImplementation&Management
6. Are there any core capabilities we need now or in the near future?
7. Are there any process redundancies, inconsistencies, or non-value added activities
preventing us from helping the organization to move forward?
(CEB, 2006)
Phase IV – Integration Implementation & Management
The integration implementation and management phase executes the plan as defined in
phase III. This work includes rebuilding the organization into a stronger more competitive
company to achieve synergies as well as the intended M&A financial and strategic objectives
(Schweiger, 2002). If done correctly, capable people are in the right roles, added to the
appropriate teams, and driving value into the business through their contributions.
Throughout implementation, the PIC team should manage and monitor all of the
implementation work, including tracking success metrics and making course corrections as
needed. For example, if employee turnover is getting worse, it may be necessary to work with
the business to create new mitigation strategies. Additionally, the work plan should be
regularly reviewed and updated, and status summaries should be communicated at all levels of
the organization. Regularly scheduled stakeholder meetings can help to gather status and
quickly identify any roadblocks that need to be escalated.
Integrate the cultures
Cultural clashes between the acquiring and target companies happen often, but they can
be mitigated by following a more systematic cultural integration process (Schweiger, 2002).
This work should build upon the information gathered from the prior cultural assessment in the
M&A’s Due Diligence phase. To begin, the Integration Leader must get clear direction from
the executives in order to understand the desired vision and culture for the new organization

(CEB, 2006). Then a deep-dive review and expansion of the prior cultural assessment should
include the most recent collective knowledge of the target company’s culture, as well as a
review of business processes, hierarchies, and organizational structures. The assessment
should now incorporate a more complete picture and comparison of the two cultures. After that
is complete, a cultural integration plan can be conceived, with the goal being to get teams from
both organizations to work together collaboratively as early as possible. There is a highly
effective four-step cultural integration process called Cultural Mirroring that should be
incorporated into every company’s M&A playbook (Schweiger, 2002).
1. Increase communication. Identify key organizational team leaders from both
organizations who need to work together. Ensure that they are introduced to one another and
that they define roles and responsibilities for their future work together.
2. Enable cross organization pollination. Set collaboration and communication
expectations for the cross-organizational teams, defining cross-company goals and target
completion dates.
3. Clarify culture expectations. Remind all cross-organizational teams and leaders of
their need for professional courtesy, communicate the new vision for the culture, and explain
the core values within which the teams should operate.
4. Define and articulate the value in both cultures. As the vision for the new culture is
communicated, it is important to articulate the most valuable elements of the two
organizations’ cultures, what they bring to the new organization, and how those elements will
support the new cultural vision (Schweiger, 2002).
The merging departments would meet regularly and use the organizational level
cultural assessment scorecard to guide the process. The meetings can be facilitated. The vision

the Executive Project Steering Committee developed would also be shared. The culture of an
organization will be different from the culture of a department. This is why both merging
departments need to come together. They would meet and start describing their respective
cultures. After that the team members would describe how they think the other organization’s
department would describe their culture. To help facilitate the conversation a listing of various
cultural dimensions can be shared (Schweiger, 2002). This will help the teams to describe their
department cultures instead of going in with a blank slate. The following is an example of a
template that could be used.
Table 13
Cultural Mirror Modeling Template
Cultural Dimensions Rating
Centralized or Decentralized decision making Dept. A Dept. B
Fast or Slow decision making Dept. A Dept. B
Short or Long term focus Dept. A Dept. B
High or Low risk tolerance Dept. B Dept. A
People Accountable or Not Dept. B Dept. A
Fast or Slow communications Dept. B Dept. A
Direct or Indirect communications Dept. A&B
Resistant or Open to change Dept. A&B
Results or Process focused Dept. A&B
(Schweiger, 2002)
Survey questions or individual interviews can also be used to obtain the cultural dimension
information. The objective of this exercise is to learn about the similarities and differences.
The differences are then reconciled. In order to reconcile the differences, shared goals need to
be determined. With that in mind both merging departments should answer the following
questions:

 What are the department’s goals?
 What cultural characteristics would allow the unit to achieve its goals?
 What specific actions need to be taken to ensure the cultural characteristics are
achieved?
 What specific actions need to be taken to ensure the cultural characteristics are
maintained?
When these questions are answered the new department can develop new structures, policies,
systems, and processes to achieve performance measures and synergies. These performance
measures need to be tracked and evaluated over time to see if improvements are being made.
When these steps are finished the new merged department can begin to leave the past behind to
collaboratively develop the new reality together. This model has proven to successfully
integrate organizational and department cultures. This is because it provides a better
understanding of both cultures, increases collaboration so people do not feel stuff is being
pushed on them, and improves trust on the teams (Schweiger, 2002). Integrating cultures does
not happen overnight. It is an iterative process. In order to be successful, cultural integration
planning needs to ensure that teams and leaders of both organizations are working
collaboratively together on a regular basis.
Improve employee engagement and retention
M&A success requires the retention of high performing teams, individual contributors,
and line managers. Retention and improvement of employee engagement should follow a
systematic process. That systematic process should be documented in the playbook, and
should have the following steps at minimum.

1. Conduct anonymous employee risk surveys. For expediency, the survey should be
provided electronically. Survey questions should be designed to (a) assess employee
perceptions of the M&A as a whole, (b) assess the need for course correction of M&A
implementation activities, and most importantly, (c) determine if employees are thinking of
leaving the organization. Effective examples of employee risks survey questions should be
maintained in the M&A playbook.
2. Share the survey results. Responses need to be reviewed by managers. The PIC team
should work with the line manager to build a specific retention strategy for any team that
appears to be at risk for high turnover of top talent. Line managers should be asked to share
the survey results with their teams, and any additional feedback supplied by the employees
during those communication sessions should be shared with the PIC team.
3. Complete talent assessments. Line managers also need to complete talent
assessments, to evaluate the talent on the team. This analysis will help to determine
capabilities that are needed to support the new organization as well as key employees that are
crucial to the success of the functional areas.
4. Complete follow-up employee interviews. Line managers should also conduct
individual interviews with each employee to determine where each is on the retention
spectrum. If managers identify critical risks during this process, they should work with the
PIC team to define mitigation strategies.
5. Provide retention packages. High performing employees who are thinking of leaving
the organization need to be flagged and provided with retention packages if necessary. All
retention packages need to be developed and coordinated by the HR business partners on the
PIC team.

During the above work, the PIC team needs to monitor all of the activities and ensure
that they are completed in a timely fashion per the defined work plan in Phase III. Regular
status updates and risk summaries need to be communicated to the M&A leadership as well as
executives. The PIC team should document all mitigation strategy activities on the work plan
and monitor their implementation and effectiveness. Particularly effective mitigation
strategies should be incorporated into the M&A playbook to support future M&A work.
Recruit to build organizational capability
One of the most significantly important factors in any M&A is the expedient
redistribution and selection of the best and brightest employees into the new organizational
design. This task is often viewed as transactional in nature, but to the contrary is of strategic
importance. Managers must be tasked to hire and retain the best talent to make the new
organization more competitive. Employees in both organizations will be understandably
anxious. Many of them do not know if they will have jobs or not, and some are so talented they
can find jobs anywhere. It is therefore imperative that recruiting teams partner with the
business to move as quickly as possible to ensure that the right people are placed in the right
position at the right time, acquiring and retaining top talent and intellectual capital
(Tetenbaum, 1999). Many best practice organizations such as GE Capital complete this work
within 30 days of the deal being closed, which is an optimal goal to strive for, and ensure
maximum retention of top talent. GE Capital has been successful because they designed a
streamlined recruiting process in advance to support all of their M&A engagements. The
following process can be used to guide PIC teams and department managers through an
efficient recruiting and slotting process.

1. Develop positions: Departmental leadership needs to commit to working with the
Human Resources department to develop positions in the newly designed organizational
structure. The Human Resources department sends the leaders a job description template
with talking points. The leaders will develop a draft of the job description outlining the
roles, responsibilities, and accountabilities. Please note the importance of using the core
capabilities and workflow processes that were put together during the organizational
design process as a guide. This will ensure the new positions help to achieve the business
strategies. Knowledge, skills, abilities, and competencies required need to be included in
the job description as well as whom it will report to and/or if the position will manage
people (Schweiger, 2002). Also included in the job description are the high level
performance goals. The leader sends the job description draft back to the Human
Resources department. The Human Resources department refines it and validates it one
last time with the department manager. When the job descriptions are finished and
approved the business partner from the Human Resources department then works with
the department manager and senior leaders to determine the number of positions it is
allowed to have by position type. The organizational structure is also updated.
2. Analysis: After it is decided the types and number of positions the department is
allowed to have the Human Resources department works with the department manager to
analyze the existing employees from the acquiring and target companies. The analysis
includes the number of people, types of jobs they currently have, and what they are doing
in these roles. All of this is compared to the future design of the department. This
comparison will inform the leader and the Human Resources department if there are
recruiting shortages, overages, and/or slotting activities. If an employee working in the

department from the acquiring and target companies are performing at least 50% of the
major responsibilities in the new position they can be slotted as long as there are enough
approved positions in the new department. If there are not enough positions the recruiting
department will have to post positions for employees. Slotting employees is always the
preferred practice because when employees have to apply for jobs this increases their
anxiety and has a negative impact on morale.
3. Post positions and collect candidate information: The Human Resources department
and PIC teams will work with the department manager to ensure the correct jobs are
posted. Location information of the job and if relocation is available needs to be clear. It
is crucial to communicate with employees at several intervals to ensure they understand
the recruiting process, number and types of jobs, associated timelines, etc. The more
communication the better. It is also very important that employees from both the
acquiring and target companies are given consideration. In fact the recruiting lead on the
integration team should provide frequent status reports regarding the candidate slates to
the human resources Integration Leader who has some oversight on the overall process.
The reports need to be reviewed to ensure employees from both the acquiring and target
organizations are treated in a fair and consistent manner though the entire recruiting
process. If a department manager is biased and only considering employees from the
acquiring organization the human resources integration leader will need to intervene.
4. Candidates are screened: Candidates should be screened against and job description
and other specifications. Candidate information needs to be gathered at this step such as
performance details, etc. so that the department manager has the right information to
make a selection decision. This step needs to be as objective as possible. The recruiting

46M&APhaseIVofthePlaybook–IntegrationImplementation&ManagementM&APhaseIVofthePlaybook–IntegrationImplementation&Management
lead on the integration team should be equipped to escalate concerns to the human
resources Integration Leader if they feel a manager is biased.
5. Candidates are delivered: The recruiting department vets candidates, narrows the pool,
and delivers the most qualified candidates from both organizations to the manager.
Candidate details need to inform managers why each candidate is best suited for the role.
The candidate’s salary expectations need to be checked to ensure they are aligned with
the pay ranges. If there are too many positions and not enough employees the recruiting
department may need to post and recruit externally. Before the jobs are posted externally
a communication to the employees should happen apprising of the situation and that jobs
are being posted externally. Posting jobs externally could make employees panic and this
is why the communication is important.
6. Interviews: The recruiting department should develop interview guide templates for the
department managers. The interview questions needs to be aligned with the competencies
of the role so that the managers are equipped to assess the candidates
during the interview. Managers should check with candidates at the interview to ensure
they understand the job and if relocation is required make sure the candidate can relocate.
7. Evaluate & Decide: Selection decisions need to be based on competence, performance,
and fit. The human resources Integration Leader should be involved before decisions are
made to ensure the process has been fair. Selection decisions needs to be documented and
job related in the event of a future audit or if there is a need to justify a hiring decision.
8. Impact Assessment: If there are employees who will not be getting a role it needs to be
determined if they can be retained in their existing role for a period of time or need to
have transition support. The transition support will help the impacted employee obtain

another position in the organization or placement outside the organization. These
transition decisions need to be made for the impacted employee so they have options.
9. Communicate: Successful candidates will receive job offers. Unsuccessful candidates
will be provided with transition packets providing them with retention packages, internal
mobility, or outplacement options. The timing of both of these communications needs to
be coordinated. When successful candidates start receiving job offers the candidates who
do not receive any communication will start to worry.
10. Close: Successful candidates receive job offer letters from the recruiting department
and are moved to their new roles. Unsuccessful candidates should simultaneously receive
their transition packets.
It is essential to move through this phase of work quickly, but efficiently. This is because your
top performers are more likely to leave the organization when there is uncertainty instead of
the poor performing employees. Managers in the business need to let the People PIC teams
know what their respective organizational structures will look like and the types/numbers of
positions needed to accomplish the goals. The following high level expedited recruiting
process was designed for handling high volume (hundreds) of positions at a time if necessary
for internal employees impacted because of a merger or departmental restructure. This process
was designed because there were too many top performers leaving the organization. It was
taking too long to create, post, and fill hundreds of positions for the new organization. If
managers meet the timelines, several employees can be moved into new roles within 21 days
from the date the positions are posted.
 Manager creates org charts and job descriptions for new positions. Manager reviews
with People business partner on the PIC team.

 Manager submits job descriptions and org charts to PIC team each week to kick off the
accelerated process.
 By end of day Friday, the PIC team sends meeting invitation to manager for the
following Tuesday.
 Monday – PIC team reviews/finalizes job description, market prices jobs, completes
internal equity review, assigns FLSA status, and assigns job codes.
 Tuesday – Manager meets with PIC team and recruiting team in one meeting to review
compensation outcomes, finalizes compensation details and job description, share
information needed for position builds, and develop screening questions for posting.
 Wednesday – PIC team builds position codes.
 Thursday – Positions built and posted by the recruiting team.
 Requisition posted for 7 days.
-- Customized career portal for applicants.
-- Streamlined application.
-- Digital interviews to save time of travelling to attend interviews.
 Manager can review applicants on a daily basis.
 Recruiting team provides the manager with list of applicants every day, current base
salaries and any relevant bonus information for the candidate. Recruiting team also
sends managers summary candidate reports to the manager so they can review
qualification details about the candidates.
 In-person interviews completed, if necessary.

 Manager meets with the recruiting team to select candidates and discusses offers.
Recruiting develops and extends the job offers. The People business partner
provides input to the offer if there are unusual circumstances.
The milestones are illustrated below and guide you through the major process steps previously
mentioned.
Figure 4
Accelerated Recruiting Process
Managing employee transitions
While the slotting and recruiting processes are happening it is crucial to manage
employee transitions. Employees will either have roles in the new organization or they will
not. If it is decided they will not have new positions they transition into an impacted
classification. Best practice organizations have a dedicated team in the recruiting department to
support impacted employees. This team within the recruiting department focuses on managing
the impacted employees by placing them in other positions within the organization or assisting
them with outplacement services. They advocate on behalf of the impacted employee. They
receive a list of impacted employees from the HR business partners. This list provides this

team with the names of the impacted employees, their job titles, date they will leave the
organization, and performance status. When an employee moves into impacted status they
need to receive regular updates from the recruiting team. Here is a sample list of programs and
services the recruiting team provides to impacted employees.
oProvides an intake assessment
oCareer guide workbook
oFlagged in the applicant tracking system as an impacted employee which makes their
record more conspicuous in the system
oTraining classes
oAutomated notifications of job announcements
oSingle point of contact
oCompetitive search for internal positions
oResume consultation
oCareer sites navigation
oReview of their job applications
oAdvocates to other members of the recruiting team and hiring managers
oInterview coaching
oOutplacement
oRelocation assistance
oSeverance
oProvides resources for building a social media profile
oProvides feedback after interviews are completed
This impacted employee support model helps to ease the employee’s transition. If it is decided
there are no internal positions then outplacement services are provided. Impacted employees
need to be treated with care and respect through the entire process.
A good rule of thumb is to follow the organization’s Values. As much advanced notice should
be given to employees if they are to transition out of the company or if it is anticipated there
are any potential impacts. Even though outplacement services are costly they should be offered
to avoid negative consequences such as lawsuits. Employees leaving on a negative note are
also more likely to damage the organization’s reputation which is not good for business
(Schweiger, 2002)

Align HR policies and information systems
This is a brief section, but only because most HR organizations already intuitively provide
adequate support in these areas. Obviously alignment of HR policies and information systems
in the newly formed organization are key to the success of the M&A. When updating HR
policies, be sure to define and communicate a clear transition plan so that employees know
which pre-existing policies to follow and for how long. Communication about the status of the
policies needs to be disseminated to employees apprising them of updates and changes (CEB,
2006). These communication points should be incorporated into the overall communication
plan so that messages can be timed appropriately amongst all other communication.
The HR information systems being used in both organizations also need to be evaluated
for strengths and weaknesses to determine what should be kept, integrated, or eliminated. Be
sure to include the Information Technology departments of both organizations to capitalize on
any integration and automated data migration opportunities. It might also be helpful to add
historical experiential notes of particularly effective technology integration tactics in the M&A
playbook.
.

The business and human resources Integration Leaders at this stage needs to articulate the
financial and strategic goals of the deal as well as the synergies needed to achieve success to
all of the PIC teams. The business Integration Leader will be responsible for making sure all of
the cross functional integration plans are delineated and managed in a consolidated project
plan. Refer to the appendix for a consolidated implementation plan. This consolidated project
plans helps to drive the implementation to ensure it will be successful. The business integration
leader will also clarify what exactly needs to be integrated. All of the PIC teams will analyze
their respective areas and identify how synergies can best fulfill the financial and strategic
goals of the deal. They will also determine the most optimal way to accomplish these goals.
Each functional area will manage their own respective integration plan and provide status
updates to the business integration leader who tracks all activities holistically. The business
Integration Leader is also responsible for selecting the stability and synergy capture teams.
These teams are independent of one another and the PIC teams. The stability team makes sure
the disruption to the customers and daily operations is minimal. If there are problems the
people on the stability team will escalate issues to the business integration leader. The synergy
capture team will track the synergies being captured from all of the functional areas. Once the
synergies are captured they are reported to the business Integration Leader (Schweiger, 2002).

A change management approach was outlined in the previous pages for managing the people
side of change. As the two different organizations come together it is inevitable, but many of
the business processes will need to change as well. It will be critical for the various teams to
work together to change and improve processes. To facilitate these activities it is suggested
that the new organization use the change acceleration process (CAP) and Work-Out methods.
These methods have been used by GE for a number of years. These methods are used to help
teams accept change, solve problems, improve processes, and break down barriers. Here is an
overview of some of the major steps.
 Bring teams together
 Give them a problem to solve or a process to improve
 Team solves problems or improves processes using several techniques such as
brainstorming
 Team presents solutions to leadership
 Leadership supports or rejects the recommendations
 Responsible owner drives the implementation of the changes or improvements
CAP and Work-Out methods also facilitate cultural integration because PIC teams from both
organizations solve problems and create new processes together.
(Harvard Business Review, 2009)

54M&APhaseVofthePlaybook–IntegrationEvaluationM&APhaseVofthePlaybook–IntegrationEvaluation
Phase V – Integration Evaluation
The post implementation review and overall assessment of the integration is needed now. This
is when organizations conduct a retrospective, document their findings, and make
improvements for the next merger and acquisition. Here is a sample of a post implementation
review that can be shared with internal customers to assess the Human Resources department’s
M&A performance.
Table 14
Post Implementation Review
Tasks
Strongly
Disagree Disagree Neutral Agree
Strongly
Agree
Human Resources department team
roles and responsibilities were clear
Recruiting processes were effective
Impacted employees were cared for
throughout the process
The People Business Partner
provided good consultation with me
The project management
components allowed the team to
accomplish the M&A goals
The team met the major milestones
and deliverables
The human resources Integration
Director guided us through each
major phase of the deal
The cultural assessment process was
effective
The Compensation team assisted me
in creating effective job descriptions
The Human Resources department
worked well together
The Human Resources department
assisted me in retaining top talent
(CEB, 2006)

55M&APhaseVofthePlaybook–IntegrationEvaluation
Conduct a post integration employee survey
The most vital post-implementation activity is addressing employee concerns. People
integration risks identified in the due diligence and integration planning phases will change
over time. Employee satisfaction and morale surveys should be conducted throughout the
M&A implementation as well as two to three months after the deal is closed. After the results
of the assessment have been analyzed, retention strategies and mitigation plans should be
reviewed and updated as needed. Refer to Figure 5.
Figure 5
Integration Survey (using a Likert scale)
1. My position motivates me.
2. I would recommend my employer to others.
3. In this organization there is open and honest communication.
4. I receive the information and communication I need to do my job.
5. I am kept aware of issues that impact me.
6. The organization stays focused on the Mission and Values.
7. Customer issues are handled quickly.
8. My department is committed to performance excellence.
9. I receive recognition when I do good work.
10. Perception of senior leadership.
11. Perception of my supervisor.
12. Rate the working environment.
13. The team works together to get things done.
14. Communication is received timely.
15. I believe my organization has a positive future.
16. I receive appropriate training on my job.
17. My talents and abilities are used in my role.
18. I get feedback about my performance regularly.
19. My department uses performance methods to make process improvements.
20. My performance goals have been explained to me.
(CEB, 2006)

Evaluate the PIC team’s service to their customers
Best practice companies continually assess and track their human resources outcomes
throughout the entire M&A, documenting their issues as they go along. This allows them to
learn and make course corrections along the way, to maximize effectiveness and results.
Another best practice is for the chief human resources officer to continually assess the PIC
team’s performance by asking for performance feedback from internal customers as well as the
newly acquired company. At minimum the PIC team should conduct interviews of key players
who were a part of recent M&A process. Then the PIC team could conduct online surveys to
obtain a broad set of feedback from line managers and other stakeholders. Some of the
questions that should be asked include:
 Does the PIC team understand the objectives of the M&A deal, and do they understand
their role?
 Did the PIC team collaborate with one another and deliver a coordinated service?
 Did the PIC team know how to use M&A tools?
 Did the PIC team manage conflict effectively?
 Were the right resources and skillsets present on the PIC team to adequately address
the integration scope?
 Were there enough PIC team resources available throughout the project?
 Is there enough redundancy of PIC team skillsets to ensure adequate coverage for a
future M&A (CEB, 2006)?
Conduct an assessment of the effectiveness of the tools
The PIC team should also conduct a retrospective on tools and methods used during the
M&A. Were the tools as effective and comprehensive as they could have been? Did the

acquired organization easily understand the tools and their intent? Were the tools easily scaled
to the actual size of the M&A, i.e. were they over burdensome for the smaller acquired
organization?
Process Optimization
It will be imperative to evaluate integration performance and processes at regular
intervals throughout the M&A. Process improvement methods should be used to optimize
performance during various phases of the M&A lifecycle and afterwards. There are many
different types of process improvement techniques that can be leveraged including CAP, Lean,
Plan-Do-Study-Act (PDSA), Six Sigma, Total Quality Management (TQM), or Work-Outs.
The process technique used will depend on the complexity of the problem identified.
Regardless of the method used to improve processes they all share some common principles
that can be leveraged if it is decided that processes need to be improved (as defined below).
Data and Measurement: Data creates visibility to possible process related problems. Data can
also be tracked, measured, and monitored over a period of time. Data is great, but it will not
explain why there are issues. It is a great first step in the journey to process excellence (Health
Foundation, 2010).
Mapping Processes: At some point processes will need mapped out step by step. The goal is to
map out the current state process. In order to do this effectively, it will be crucial to obtain
feedback and input from the process stakeholders. The staff will appreciate being engaged to
map out the processes. They will pinpoint processes that add value and those that do not add
value. Problems with processes will start becoming clear and can be isolated. Map out each
step by indicating the owner of the process. Decision points in the process should be captured.

Reliability and Control: Once a process or a system is analyzed another important step is
making sure reliability is improved and consistency is achieved. At this phase redundancy and
waste are identified and eliminated. Handoffs in the process get special attention due to the
fact that they increase the likelihood of errors.
Demand and capacity: If there are delays with a process many people assume there are
resource or capacity challenges meaning there may not be enough staff. Before making a
decision like that it is important to look at demand for a service and flow. When demand and
capacity are reviewed often times unnecessary bottlenecks are discovered. When these
bottlenecks are removed the process or system starts to flow smoothly and delays are
mitigated.
Stakeholder engagement: It has been mentioned already, but it is really important to engage
people involved with touching these processes to get their input. Customer feedback should
also be solicited as well. When people feel they are part of the solution instead of having
something pushed on them will increase the likelihood the process changes will be supported
and adopted.
(Health Foundation, 2010)
Design New Process: After the problems are identified the stakeholders will work together to
map out a new ideal state process. The new processes should be aligned with business
operating unit and organizational strategies. Value added process steps identified will be
included in the new process design. Process owners and decision points are identified on the
map.

Implement: The new process is implemented. The change management information in the
previous sections should be referenced. If this step does not go well it could easily jeopardize
the adoption and implementation of the new process.
(Health Foundation, 2010)
Evaluate: The new process should be assessed and measured. The PDSA tool was mentioned
previously and needs to be considered. It allows people to answer the following questions:
 What is it that we are trying to accomplish?
 How will we know that a change resulted in an improvement?
 What changes can we make so improvements are made?
(Institute for Health Care Improvement, 2013)
Update the playbook, and create improvement plans for future M&A
Once the retrospective information from customers and tools has been compiled, the
playbook and its supporting tools should be updated. Additionally, the PIC team should
engage in skills enhancement and expansion training, to improve future M&A work. It is best
to continually refresh skillsets to increase speed and flexibility of a future M&A.
The following dashboards are different examples that can be used to track people related
integration progress.

Table 15
(CEB, 2006)
PEOPLE DEPARTMENT INTEGRATION PLANNING DASHBOARD
We must be ready to do:
1 Identification and retention of key management talent
2 Attain synergy targets and eliminate redundancies in positions
3 Launch cultural integration process
Major Activities Status
Action
Required
Owner
Secure Key Management Talent
Talent assessment process for Vice Presidents - establish definitions for key talent based on deal strategy and goals and
evaluate talent against the specific criteria. (pre-close)
Talent assessment process for key middle management (deal sign through post close). Senior managers will identify
Talent assessment process with key talent through organization (post close). Middle managers will identify.
Determine leadership assignments
Retention Management
Complete talent risk analysis - critical roles, manager and above
Design customized retention strategies for key talent (short and long term)
Staffing
Review processes, resources and tools. Determine best practices.
Review diversity philosophy, assess diversity
Develop plans to attract and retain long-term talent
Review contractors to permanent employee ratio and determine strategy
Determine hiring requirements (identify current vs. future)
Review hiring practices philosophy (i.e. temp to perm, market pricing, etc.)
Cultural Integration
Understand differences in philosophy, vision and guiding principles
Understand "patient - centric" philosophy
Outline new reporting relationships and decision-making processes for combined entity
Educate acquired employees about the company's work processes and environment, employment practices
Review existing employee satisfaction surveys, as applicable
Review current performance management process and determine transition required and timeline. Determine if
performance appraisals / bonuses are tied to achieving company objectives.
Create team building activities to facilitate cultural integration and change management

Table 16
People Integration Dashboard
Major Deliverable Owner Status Start End Actions Needed
Revenue Cycle
recruitment tier 2 Recruiting On track 6/7/2013 8/17/2013
None. Interviews taking
place.
Cultural Integration
Organizational
Development Delayed 7/7/2013 10/1/2013
Cultural assessment not
completed at due diligence
step.
Retention of certified
EMR analysts
People Business
Partners Completed 7/15/2013 8/22/2013
Retention bonuses
provided and agreements
signed.
IS impacted
employees given 60
day notice Recruiting On track 7/22/2013 10/1/2013
Have impacted employee
list and uploaded it to
applicant tracking system.
Build new job
descriptions and
position codes Compensation Delayed 7/22/2013 9/22/2013
Managers have not
provided draft job
descriptions.
HR policies aligned
People Business
Partners Delayed 7/1/2013 10/1/2013
Many of the policies are
completely different.
Notified CPO to obtain
additional details.
Benefits integration
with target company Benefits Completed 8/9/2013 10/17/2013 Enrollments completed.
(CEB, 2006)

Table 17
People Dashboard
KPI Goal Current Change
Recruiting
Quality of Hire 4.5 4.6 ↑↑
New Hire Turnover (HQ/Sales)
New Hire Turnover (Manufacturing)
Develop
Level of Succession Planning
Impact of Training on Business
Training Transfer for Key Courses (Composite)
Retain
Eligible to Retire
Retention of High Performers
Satisfaction with HR
Workload (Associates Losing PTO)
Challenge
Culture
Alignment & Commitment (HQ/Sales)
Alignment & Commitment (Manufacturing)
Action on Feedback (HQ/Sales)
Action on Feedback (Manufacturing)
Productivity
Diversity
% Females Director and Above
% Workforce Minorities
Summary
Actions to Remedy Red and Yellow KPI's
(CEB, 2006)

Now that many new processes have been mapped leadership should make sure audit teams are
being used for auditing these processes. Any process or performance based gaps need to be
analyzed against the success measures and course corrections taken if necessary to ensure the
new organization stays on track. It is now critical that the business accept the responsibility of
developing high performance teams so that value can be sustained and organizational
objectives are achieved. The Human Resources department can help guide this process, but
again leaders need to take the responsibility of making sure it happens. High performing
teams model the following qualities:
 Communication is important so that everyone is clear on the plan and goals
 Knowledge and skills are similar and transferred easily
 Team members are all involved
 Team is dedicated to the success of their department and the organization
 Performance excellence is very important to the team
 Roles and responsibilities are clearly defined
 People on teams are self-directed
(CEB, 2004)
Senior leaders in the organization should make sure all leaders include this as a required goal
on their performance evaluations so it can be assessed on a continual basis.

Leadership needs to continue to track, monitor, and improve performance using the PDSA
cycle. Interventions may be needed using various process improvement methods. When the
integration is completed a report by each PIC team listing things that went well, not so well,
and improvement recommendations used should be submitted to the business integration
leader who will consolidate this information in a central database so it can be referenced in the
future by all PIC teams. Lessons learned documents for specific departments can also be
created so the same problems do not surface in the future. Feedback about performance needs
to continue to be solicited. Case studies should be put together. Best practices should be shared
easily. Playbooks, tools, and other related documents also need to be updated when changes
are made to them. Track, assess, adjust, and be flexible (Schweiger, 2002).

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