Canadian HR Reporter

J oanne Brown has gone through fi ve mergers and acquisitions (M&As) at High Liner Foods, some big, some small. And probably the biggest learn- ing is fully understanding the cultural piece, which defi nitely should be consid- ered during due diligence, says the execu- tive vice-president of HR at the 1,500-em- ployee company. "It's really about being prepared to handle the diff erences. It's part of your prep and being prepared because it can start to hap- pen very quickly. e impression you leave that fi rst day after the acquisition happens is very meaningful and what you do that day should refl ect any cultural diff erences that you're aware of." Brown says she has been lucky in that she's been involved at the early stages of M&As — but she knows that's often not the case. " e reason I think that happens is be- cause… the early stages tend to have a huge fi nancial and business opportunity focus, so (it's about) the fi nancial aspects and the increased revenue, versus on the people," she says. "It makes sense for HR to be involved as early as possible in the due diligence because there's serious HR issues around talent and those things can start to happen quite early if you're not careful, if you're not keeping an eye on what's happening from a leadership and talent point of view. And cultural issues have huge implications later so it's best to understand those early on as well." If HR wants to get involved sooner, it's about helping the CEO and CFO under- stand the impact employee-related issues and cultural issues can have if they're not addressed and considered early on, says Brown, "and to talk like a business person, to make sure they're seeing you as a busi- ness person as part of that due diligence team." So why is cultural compatibility often not considered at this point? It's possible people don't appreciate its impact, she says. "It's very easy to get wrapped up in all of the other things that have to happen. ere's just so much that goes in those due diligence phases that's around the numbers and understanding numbers and making sure you're making a good decision that of- ten these kinds of things get pushed to the side until, all of a sudden, it's day one." To ensure that compatibility, it's about communications, at the early stages, and possibly doing an engagement survey to un- derstand where people are at, says Brown. HR can play a key role in getting into the organization as early as possible and having an ear to the ground to pick up on cultural pieces that may not be noticed otherwise. "You have to, at a very early stage, un- derstand what the diff erences are and then really look at 'Is there a best practice that either company has in place that we want to keep?' and then decide where you want to land," she says. Sometimes, it's about aligning policies somewhere in the middle, or going with one of the company's policies because it's more forward-thinking. "We do a grid with all of the diff erences and lay it out and look at any costs associ- ated, if there is, and then we make a decision as to whether we're staying with what we do versus what the other company does," says Brown. Having gone through several acquisi- tions, and having seen a lot of best practices, High Liner will probably lean towards its own way of doing things, she says. But, at the same time, it's good for the organization coming in to see that the acquiring com- pany has at least considered other options. Other HR issues that should be consid- ered during an M&A include identifi cation of talent in the organization, in terms of what they're bringing and how they're go- ing to be retained, and understanding what it means to the business if they leave. And then, of course, the costs associated with retention and bringing together poli- cies, benefi ts plans and pension plans, says Brown. " e other thing that can happen, espe- cially if you're combining private compa- nies with public companies, are diff erences in salary structures and policies that can have huge cost implications if they're not handled properly." Right now, HR is often involved on the synergy side, looking at the people syner- gies and running all the numbers for that. But HR can be doing more, she says. "We can step up in terms of providing metrics around what we think our turnover should be, all the HR analytics. I think we can do even revenue per employee, all those kinds of things… in some cases, HR staff has just not been considered to be fi nan- cially astute, I think that's a misconception in many cases; but I think that's one of the reasons HR has been pushed aside on the fi nance piece. But there's real implications, there's real dollars in the HR… things like retention agreements, change of control agreements, some of those are huge, so HR needs to be involved." HR can also help senior leaders through the transition in providing a read on what's going on, going a little deeper to help them understand what's appropriate when it comes to communicating with diff erent employee groups, such as town halls, plant fl oor visits or shaking hands in the cafeteria. HR can also help in coaching managers be- cause their operational decisions will lead to personnel decisions, says Brown. "HR can get involved as change manage- ment experts at this stage; the communica- tions piece, obviously; and then this is where cultural diff erences will often really start to show up as well, and I think helping manag- ers to understand and be aware of those." From the fi rst day, it's about making a good impression, in introducing the senior leaders and HR, she says. " at's key because it helps create a bit of a comfort for those people, that it's not some cold company that's bought them: ' ere's people here, we've met them, they've made the eff ort to come in and talk to us.'" "Differences in salary structures and policies can have huge cost implications." Joanne Brown executive vice-president of HR at High Liner Foods The Halifax-based company has about 1,500 employees Succeeding Undergoing a merger and acquisition is no easy task for employers, let alone human resources. So we talked to fi ve HR leaders from across the country to hear their thoughts — including tips, anecdotes and advice — on how to thrive during these tough transitions. Succeeding Succeeding Succeeding HR LEADERS FEATURES

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