by Kristen Lamoreaux

How to Select IT Talent in a Merger

Jul 29, 20144 mins
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One of a CIO’s biggest leadership challenges is retaining the best IT talent in the throes of a merger, acquisition or divestiture.

In today’s dog-merge-dog world, one of the greatest challenges is determining how to weave the IT talent from merging companies into one successful, thriving organization. Divestitures pose the same challenge: deciding who will stay and who will go.

“Skill sets can differ and requirements can differ for acquisition versus divestiture,” says Brian Lurie, former CIO of global manufacturer Gardner Denver, “but talent is needed in both situations.” He says that when making selections, CIOs should remember that “skills can be learned, but talents are innate.” So it’s important to have candid conversations with managers at the other company.

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“The two CIOs from the merging companies need to work together, along with their executive teams, to outline the current organizations and develop [a vision for] the future organization,” says Sue Haindl, vice president of Anexinet and a former operations and IT leader at Pew Charitable Trusts and Exelon. “You should start thinking about talent during the early deal discussions.”

There is no one correct way to handle this process. But Brendan O’Malley, CIO at NSM Insurance Group, recommends avoiding the old tactic of making both sides bid for their jobs. “I have never gone the route of ‘everyone’s up for grabs.’ One organization is already in turmoil. Why throw a curveball to your own organization?”

Building the Team

Maintaining productivity and morale through a merger or divestiture depends on two factors: the people who are being retained and those who are being released. “How one treats those who are to be released has a direct effect on the morale of those who you desire to retain,” Lurie says.

The key is extraordinarily good communication, the three IT leaders say, even though a merger or divestiture is a very busy time for the CIO. “In the absence of -information, folks will imagine the worst and will spend their time at the water cooler sharing the impending doom. The only antidote is information,” Lurie says.

“Communication and transparency are very important during a merger, but the way to build the team, community and culture is based on investing time,” says Haindl. “During a merger, IT leadership is stretched in many ways, much like the organization, but you need to devote time each day to being actively engaged: face-to-face, social media, town hall meetings. These engagements become the new stories of the organization.”

Merger = Bonus?

Be aware that some employees in the midst of a merger have come to expect retention bonuses. And while it’s true that bonuses can be used to acknowledge those who are most valuable, the absence of a bonus can be interpreted as saying, “Ah, yeah, you can go now.” Lurie is leery of retention bonuses: “You need to be very careful with the information that is shared and assume that who is on the [bonus] list will eventually leak. It can be like a cancer if not managed correctly.”

O’Malley agrees that retention bonuses are tricky. “They are a tool, but not one that I would pull out on day one. These need to be handled very carefully and presented and sold to the individuals involved or they can boomerang pretty quickly.”

Haindl says that throughout her career, “The best [M&A] transactions had several key ingredients: a leadership team that had a vision and plan for the merged companies; frequent and transparent communication to the workforce; and a timeline that supported rapid and efficient integration.”

While as CIO you don’t have control over all aspects of the deal, you can control your actions, the frequency of your communication, and the attitude and energy you put into choosing the best IT talent for the new organization.

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