Every business has the goal of coming out of a merger or acquisition as a more valuable company. You don’t want to lose the people that the acquisition brought in, and very often, the driving motivation for doing an acquisition is to capture the talent held in the target company. If you don’t know how to marry this newly-acquired talent into your company, then you risk your own employees and losing your new talent to competitors.
The process of merging two companies into one is a real problem that the working world faces. This is because a lot of the traditional and familiar merging practices are vague, subjective, and are overseen by people who lack knowledge transfer experience.
To help you understand the potential problems that can arise during a business acquisition and merger, this case study is going to share the story of how we helped one of our clients recover from a mishandled merger.
The Challenge Of Acquiring And Merging Companies
Our client, a major hospitality company (I’ll call them Company A), acquired another company (Company B) that was composed of a number of smaller brands. To make things more complicated, Company B had itself recently acquired another business (Company C) and was still undergoing the merger process when it was purchased by Company A.
This confluence of several different companies coming together required a well-planned merger strategy for combining the separate systems, cultures, and governance structures. Furthermore, acquired talent needed to be given new roles and each company’s customers needed to experience uninterrupted service quality.
Challenges that needed to be solved during the merger included a broad variety of issues:
- How are we going to handle security?
- How should we change business architecture and design?
- Who will oversee project management?
- How are we going to transition our internal customers?
- How are we hoping to prioritize our projects?
- How are we going to manage budgets?
- What are our new coding standards?
Consequences Of Relying On Traditional Merger Practices
Unfortunately, the hospitality merger did not go smoothly. Instead of working with a knowledge transfer and merger expert, Company A used traditional, in-house merging and training practices.
Because the number of companies, employees, and customers being blended was so high, relying on traditional practices caused considerable confusion. The consequences included:
- Employees quit because they didn’t understand their new roles fast enough.
- Extended system down time, as technical systems had trouble transitioning.
- Customers were lost because of the lapse in service quality.
- The cost of the merger increased as the deadline was exceeded and talent was lost.
Due to these and other problems, Company A finally decided to seek out a professional knowledge transfer firm who could help them complete the merger without losing additional talent or resources.
This is where The Steve Trautman Co. came in.
How Professional Knowledge Transfer Creates Seamless Company Transitions
Within a company acquisition or merger, knowledge transfer (KT) involves transferring the explicit and implicit skills and knowledge of one company to another.
Knowledge transfer professionals ask: What can we do to make the critical, high priority transfer of knowledge happen faster, with less stress, and with greater predictability and consistency?
When we came aboard to help Company A complete their merger with Companies B & C, our KT experts quickly identified the main obstruction to success. Namely, company A’s struggle to correctly answer the challenges listed above (e.g. How are we going to handle security, architecture and design, project management, etc.).
All the different answers to these challenges needed to be resolved, and because there were multiple companies involved, there were a number of competing approaches. Company A needed to choose one or the other approach, or blend a few answers into one. Once that was done, knowledge transfer could begin.
The Knowledge Transfer Process
Once an approach was chosen, The Steve Trautman’s Co.’s KT certified consultants helped Company A identify an employee who was an expert in completing that approach. Some of the experts came from Company A but others came from Company B or C.
Next, we had Company A create a list of everyone within the organization who needed to know how to complete the new approach. Using our knowledge transfer process, we would help the expert train these apprentices.
After the expert and apprentices for a particular approach where identified, our team sat down with this expert and their manager to draft a Skill Development Plan (SDP) — Steve Trautman’s specialized SDPs map out the essential and often esoteric tribal knowledge needed to properly conduct the work. During this meeting, we also created a training schedule to get the expert started methodically and measurably transferring their critical skills and tacit knowledge to the apprentices.
Knowledge Transfer Challenges
Of course, the challenge of completing a successful knowledge transfer is that this whole process has to go down while you’re running a business day-to-day. There isn’t time to set up a class for the apprentices — you’re busy merging two companies! — and so you have to do the knowledge transfer in real time and on the job.
For companies without a dedicated KT division (like Company A), coordinating knowledge transfer on the fly can be a massive challenge. Which is why you should invest in your company’s future by partnering with an experienced knowledge transfer firm that specializes in managing KT during acquisitions and mergers.
The Steve Trautman Co. Difference
Well-executed knowledge transfer will quickly spread critical skills and knowledge from one expert to members across your organization. But, you can’t rely on traditional and outdated training techniques and meetings to get this done. You need to follow a time-tested KT process.
Here at The Steve Trautman Co., our 3-step knowledge transfer solution will provide your company with tools and expert facilitators needed to quickly merge industry knowledge while undergoing an acquisition.
To learn more about what our team of KT experts can do to help your company retain talent and customers, contact us today.
Topics: mergers & acquisitions