The Value of Talent Selection Based on Capabilities & Personality Fit
By Jack Prouty, Past President, M&A Leadership Council
In an M&A, talent selection is important both rationally and emotionally.
First of all, if none of the key management from the target company are named to appropriate roles in the combined organization it sends a message, rightly or wrongly, that the people from the target company are not valued and that it is going to be “our way or the highway” by the acquiring company.
Second, a lot of institutional knowledge and key relationships within the acquired company will be lost without these essential executives and/or managers.
I can share war stories on major mistakes made in building the new organizational structure and management team, but here I will focus on talent selection based on both the capabilities of the individuals as well as their personality fit with the strategic and operational direction of the “new” business.
Simply put, does this particular individual targeted for a key role in the new organization have both the “skill set” (relevant experiences/desired capabilities) and the “head set” (emotional/strategic capacity) we need going forward? And this applies to people in both organizations (not just the acquired company).
For example, in comparing which CFO gets selected here are some "skill set" factors we would want to evaluate:
- Which financial systems and processes will we be using in the combined organization and who is most conversant with them?
- If our future strategy is to go public and operate in a far different world of financial compliance and reporting, who has the best experience for this?
- Which CFO has the best experiences and capabilities in managing the financial function in this new, larger, and potentially more complex business?
- Who has the greatest upside potential as well as demonstrated performance?
From a “head set” perspective, here are some factors we might also want to consider:
- Which CFO best incorporates the vision and values for the new company?
- Which one can work most effectively as a “team player” with others and be an effective, collaborative member of the new management team?
- Who is the better change agent: adaptable and flexible in executing the goals and objectives of the “go forward” organizations and open to leveraging the best practices of both companies?
- Who is best at embracing the “we” rather than the “me versus you”?
Often times when I’m working in the trenches on an M&A integration planning and implementation project, I spend a significant amount of my time working with the management team of the acquired company.
First, I do this because often the management team of the acquired company does not do it and thus does not build the relationships they should, nor gain the early business insights they need.
Second, because I am the outsider and offer a neutral, third-party perspective, the target management team will share more information with me as well as provide comments they wish me to carry back to the acquiring company’s management.
I can also help these executives and functional managers avoid career damages. A number of times I have had to be candid with a person being targeted from the acquired company: “The senior management really is impressed with your experiences and capabilities, but you have got to get rid of this chip on your shoulder; if you are going to be angry at someone, be angry at the people who sold the company, not the people who bought your company and value it.”
This concept of selecting people with the right “head set and skill set” has greater application beyond that discussed above; it can be used when selecting anyone for promotion, a new role, or to lead a project (M&A-related or otherwise).
Try following this approach….. I think you’ll find it to be highly effective.
Best regards,
Jack Prouty
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