1. The Human Factor of Mergers & Acquisitions HOW TO RETAIN TOP PERFORMERS POST-INTEGRATION Andrew Partheniou | Jimmy Song | Simon Foucher | Stefanie Perrone

2. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Current State 70% M&As fail to deliver on targets Business focus on Financial OB Focus on People M&As are disruptive life events Lost of identity Culture clash Uncertainty / Stress Need to consider the “Human Factor” in M&As

3. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Key Success Factors Human factors are critical to ensure retention of key people IdentityCultureMotivationProcess COMMUNICATION

4. Identity Who am I in this new Organization?

5. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Identity Social Circles Family Work Place Work organization play a crucial role in shaping identity

6. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION 4 Approaches to post-merger Identity AssimilationConfederationFederationMetamorphosis Excpet for federation, all outcomes imply changes

7. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Assimilation & Metamorphosis: cope with new identity Build TrustJustice Sell Benefits Stability Goal: Reduction of insecurity and stress for individuals

8. Culture Understand Norms and Expectation

9. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Culture Integration – Overview How to Merge Culture Successful culture integration reduces chances of failure Pre-MergerPlanningImplementingReviewing What is Culture? Shared Meaning Understand Norms and Expectations Why is it Important? Conflict Avoidance Aligns Expectation

10. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Stage 1 – Pre Merger Innovation Relationships Autonomy Performance / Reward Risk Key to success is to clearly identify culture differance

11. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Stage 2 - Planning Object What dimension to integrate Goal Clarify Method Which ones Time Table Budget Training Other items A day invested in planning saves a week of issues in implementation

12. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Stage 3 - Implementation Create atmosphere of integrationClarify NormsBuild TrustCommunicatePrepare for ConflictEquity Many tools to chose from to integrate culture

13. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Stage 4 – Review Stage Results Vs. Expected Find Difference Document findings Explain Difference Revise technique Apply at next merger Take action Continuously improve integration performance

14. Motivation Individual View of Retention

15. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Identify Top Executives Only invest in keeping key executives High Salary High corporate ROA Companies of comparable size Executives

16. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Top guns at the Non-Executive Level Combination of 2 our of 3 Methods Document & Data Approach Surveys Social Network Mapping Target the right individuals

17. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Intrinsic Retention Programs Executives Promotion Possibilities Power shift from shareholders to managers Parent CEO controls high share volume Workforce Address job security concerns Maintain intrinsic motivation

18. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Extrinsic Retention Programs Avoid going down Maslow’s needs hierarchy

19. Communication & Process Ensure Reality Matches the Theory

20. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Organizational Citizenship Behaviour Communication satisfaction is positively and significantly related to OCB Increase perceptions of OCB Dimensions Increase OB through effective communication Increase Employee Happiness (Satisfaction) Increase employee loyalty and retention

21. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION The Communication Triad Communication and trust increases organizational commitment Communication Organizational Commitment Trust

22. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Formal and Informal Communication Reinforce leadership credibility and forge trust Strategize Strategize and prepare a formal communication plan Truth Use a truthful approach at all times Remain consistent Timing Implement frequent communications Over-communicate Reinforce Manage Change Use “Transition Teams”

23. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Process for Communication Transfer Knowledge blind spots Knowledge Mismatches Knowledge Jail Communication fragmentation causes Identify and select process information Plan how information is collected Document information transfer Translate into useful applications (e.g.: Framework) Reinforcement (e.g.: transition teams) Mitigation Approaches Formalized process changes reduces employees uncertainty

24. INTRODUCTIONIDENTITYCULTUREMOTIVATIONCOMMUNICATIONCONCLUSION Conclusion Culture/ Identity Motivate Communicate Process