August 6, 2024 • 36 mins
Welcome to the "Show Me The Way" podcast with David Seitter
In this episode of "Show Me the Way," Dave and guest Lora Cheatum, the recently retired SVP and Chief HR Officer at KC Southern Railway, dive into the complexities of HR integration during mergers and acquisitions. They give insights into how to effectively manage cultural integrations and operational synergies, the critical phases of decision-making, closing day preparations, and post-merger strategies.
Ep. 51 — Crucial HR Moves that Make or Break Mergers with Lora CheatumLora begins by sharing her extensive career journey. Over her 25-year HR career, she has navigated numerous corporate changes, including mergers, acquisitions, divestitures, and even bankruptcies.
The Dual Role of HR in M&ADave prompts Lora to discuss the specific roles HR plays during the acquisition of a business. Lora explains that HR’s responsibility is to ensure a smooth transition and integration. She emphasizes that the integration of people is as crucial as operational synergies, and that effective communication with employees is key to achieving success.
Due Diligence in M&A from an HR PerspectiveLora shares insights on the due diligence process from an HR standpoint. In heavily regulated, publicly traded companies, the information that can be shared is limited. However, ensuring cultural and operational alignment through methods like cultural gap analysis is essential. This process involves surveying employees from both merging companies to identify similarities and differences, helping to foresee and manage challenges.
Managing Cultural IntegrationCulture is often cited as a critical factor in M&A success. Lora notes that cultural clashes can lead to failed transactions and decreased business performance. Recognizing and transparently addressing cultural differences can mitigate these risks. Lora shares an example of a successful cultural integration process involving a thorough cultural gap analysis that helped her understanding and managing integration challenges effectively.
Communication and Transparency: Cornerstones of Successful M&ALora cannot overemphasize the importance of communication and transparency. She stresses that employees are the greatest assets in any company, and their concerns need to be addressed clearly and promptly. Sharing relevant data and having open conversations about the future can prevent uncertainty, which often leads to insecurity among employees.
Decision-Making and Day One Post-MergerDave and Lora discuss the critical decisions HR professionals need to make leading up to and immediately after closing a deal. Lora recounts examples from her experiences, including a successful transition spinning off Yum! brands from PepsiCo. The new company made a significant effort to celebrate the change and ensure employees felt valued and integral to the new organization, setting a positive tone from day one.
The Sell Side vs. The Buy SideLora explains the nuanced differences between managing M&A from the sell side versus the buy side. While the sell side focuses on advocating for the outgoing employees, the buy side must assess the skills and culture of the incoming employees to ensure a smooth integration. Both sides, however, must rely on data-driven decisions to manage the transition effectively.
The Long-Term Integration ProcessIntegration is a lengthy process. Lora emphasizes that mergers and acquisitions can take years to fully integrate and that maintaining a positive mindset throughout is crucial. Viewing change as an opportunity rather than a hurdle can lead to personal and professional growth.
Key Takeaways for HR Professionals and Business OwnersLora wraps up the episode by summarizing the key points:
- Transparency: Be transparent about what you know and what you do not know.
- Communication: Over-communicate and maintain open lin
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dave (00:00):
Show me the way episode 51, the integration docent.
Hey, ladies and gentlemen, I'mexcited about this because I do
not get into HR matters much.
It's get delegated to either the buy sideor the sell side clients that I represent.
You're going to learn something.
I think that's very important.
The three Magic terms are the threeideas you want to bring to the table in
(00:25):
dealing with the HR complications andbenefits of any merger or acquisition.
So stay tuned.
Oh, by the way, there's a specialsurprise at the end that you will want
to listen for the whole podcast to get.
Welcome
(00:53):
to show me the way a podcastpresented by Spencer Fain, LLP
about business succession planning.
The merger and acquisitionexperience and successful exits.
I am your host, Dave Sider.
Kids, we're going to have a specialsurprise, but you have to wait until
the end of the podcast before I reveal.
It'll be worth it.
So hang in there.
(01:14):
Joining me today on our show isLaura Cheatham, recently retired
head of human resources atKansas city, Southern industries.
And she's going to talk about thesteps necessary to properly integrate
a selling company into a new entity.
Laura, welcome to the show.
Lora (01:33):
Well, thanks Dave.
And good afternoon.
Thanks for inviting me to join you.
This topic is very near and dearto my heart since I've been living
through it more than once and mostrecently in the past couple of years.
So I look forward to the discussionand certainly giving you some of my
(01:53):
insights and perspectives as I see them.
Dave (01:57):
Excellent.
Really appreciate that.
But I always like to start offour podcast by letting people
get to know you a little bit.
So tell us a little bitabout your background, your
early business experiences.
Lora (02:09):
Well, I would say I'm a pure Midwesterner.
I recently kind of counted up howmany places I've lived in the Midwest
from Minnesota to Iowa to Colorado.
I lived for a time in Texas.
I think I've moved 11 times.
So.
I describe myself as a,as a true Midwesterner.
I started my career out, if you will,as a school teacher for about seven or
(02:34):
eight years, decided to go back and getmy MBA and went into the working world.
My kind of first foraywas really in operations.
I was fortunate enough to work fora division of PepsiCo where we'll
talk about that later, just in termsof the real learning experiences.
(02:57):
And I was in operations forprobably half of my career.
And then I jokingly say, I was probablysomewhat frustrated with Whatever I
thought the value Ad for hr was andmaybe I was too focal and I ended up
Going into hr and I have been in humanresources, which I thoroughly enjoy
(03:19):
and have been doing that for Probablythe last 25 years of of my career So
as I had said to dave, I think i'vebeen through a merger and acquisition
a divestiture a spinoff Name it.
I've probably been through it a bankruptcySo I think my perspective in all of those
could be certainly interesting to some.
(03:41):
Well, let's
Dave (03:42):
talk about this in terms of HR.
And I think specifically what is HRdo in a company and what does HR do
in and during the acquisition of abusiness or the sale of a business?
Lora (03:55):
Yeah.
Great question.
So.
We always talk about in terms ofmergers or acquisitions synergies.
And we always talk about operationalsynergy, purchasing synergies, but
at the end of the day, it doesn'tmatter really what the company is.
People are the greatest assets thatyou're going to have in any company.
(04:16):
And from an HR perspective, ourjob is to make sure whatever.
The new company is looking for that.
We are, are ensuring that ouremployees understand what's
going on and communication.
I think we all know thatcommunication with shareholders,
with customers is very important.
(04:38):
It's that three legged stool andemployees are as much a part of
that integration as anything.
I'm sure everyone was familiarwith different statistics.
Thanks.
And there are many differentstatistics out there that would tell
you between 70 and 90 percent of allM& A deals will not be successful.
(04:58):
What does that mean?
I don't know.
You can describe that, but it, itis interesting today, literally just
about an hour ago, I received an emailfrom a friend of mine that worked at
a company and said that they had beenbought by private equity group two
years ago, and that their company wasBeing reacquired, if you will, by the
(05:21):
original odor, because it didn't work.
There are many reasonsthat they don't work.
And obviously one of them is notonly integration of operations, but
integration of culture and integrationof people into that culture.
Dave (05:36):
So when you're on a sales side and you're running HR, you're putting together
a lot of information, what we calldue diligence to share with the buyer.
How do you, how did you go about handlingand preparing for that, for delivery to
a buyer, the buyer's representatives?
Lora (05:53):
Yeah, good question.
It's interesting because, Especiallypublicly traded companies that are heavily
regulated, which the last two acquisitionsslash mergers were both of those, because
we're publicly traded, there were certaincertain types of information that we
could not share, but there is certainlya lot of information that you can share.
(06:15):
And I think that certainly from anHR perspective, you want to make
sure that you are managing yourcultural integration, frankly.
Or it's going to manage you.
And one of the more.
Interesting processes.
We went through at one of thepublicly traded companies I'd worked
for actually was a utility company.
(06:36):
We did a cultural gap analysis and itwas a survey that company helped me with.
And we gave that surveyto our current employees.
We gave the survey, the same survey tothe company we are looking to acquire.
And so why did we do that?
You know, we wanted to find thesimilarities, the differences.
(06:59):
So that we could better understand.
What the challenges were going to be,because while you might be acquiring
a company that looks like you andacts like you is in the same industry,
all companies are not the same.
So I think it was probably one of the bestprocesses and in the three or four mergers
(07:20):
acquisitions, I've been through that wasprobably not necessarily only helpful to
management, but I'm going to continue togo back and talk about employees, they.
They want to be heard.
They want to feel like they've been heard.
And there are many different ways youcan do that because at the end of the
(07:40):
day, you want this, the company, thefirm wants us to be successful, period.
That's the goal.
And however you can do that.
And there are certainly manydifferent ways to do that.
I, I do believe that was probablyone of the better integration
processes that I've been through.
Dave (08:01):
You've looked at that on the sell side.
Anything different that you lookat when you're on the buy side
as you go through the process?
Lora (08:08):
Yeah, it's, I don't know that there's a significant
amount of difference.
I really, it really depends onthe culture and the values and
beliefs of senior management.
Hmm.
You know, it's, it'sunfortunate sometimes.
I've been through some where it really isall about the integration of operations
(08:34):
and identifying and quickly realizingthe synergies within the operation.
So again, it goes back to, unless maybeit's AI, it really is all about people.
You can't, You can't move trains.
You can't have electricitygoing to homes without people.
So it's very important for theleadership, the CEO and the board to
(09:01):
continually ask, what are you doing?
And that is our role.
That is our role to find out wherewe are and, and how are we doing
this integration with people?
Because I have certainly seenthat a few times that buyers
are going to find out too late.
That their integration plans can'tbe implemented quickly or at all.
(09:26):
And that can be somewhat disastrousbecause at the end of the day, you
really want, I call it a cohesiveculture, probably not the same.
It was, was with the, with thebuying company or the selling
company, but it has to be cohesive.
And whatever that looks like for you
Dave (09:45):
Let's drill down by maybe doing a little walking tour through
maybe three components the decisionmaking process closing day Day
one post merger to your points.
This might be the right time to talkabout integration in those In those terms.
So let's start with decision makingwhat, what comes to mind when you're
(10:07):
looking as an HR professional, whatthe decisions that you need to make.
And, and when I say decisions,you're really, it's the advice.
I think you're giving to the C suitemanagement or the world of mid owners.
Lora (10:19):
So, you know, there are different phases.
I mean, HR, isn't just about managingmedical or dental, a big piece of what
we do obviously is, is around technology.
Ensuring that we communicate effectivelywith employees and gosh, we all know we're
pretty much dependent upon our computersand our phones anymore to find out things.
(10:41):
So.
One of the first things wereally had to talk about was the
integration of technology and howdo our authorities get information?
Because we want to be ableto give them information.
In this day and age, I was thinkingabout it earlier today, trying to find
out about the company that's buying you.
It's quite easy today.
You can go out to TikTok, LinkedIn,you can, you can get a feel and
(11:03):
a sense for what the companyis or what they believe in.
And that's Marketing and reallythat's internally with HR.
That is what we do.
We do employee marketing for whateverwe're doing, whether it's training or
medical or, or helping them understandwhat this merger is going to look like.
(11:26):
So.
Even, even when it's not, when we're nottalking about roles and careers from a
decision making perspective, there's alot of employee information and data.
I mean, if you think about it, you'vegot two different sets of everything.
Medical and leave and training.
(11:47):
And what are we going to do?
Who's who's on first and what's on second.
So honestly, from the get go, youhave to, unlike any other it decision,
what are we going to do and what arewe going to use and the best fit.
And they have always hounded that HR, likeany other function, should rely on data.
(12:09):
We have information.
We know what it is.
It shouldn't be how we feel.
We, we, we know the critical piecesof how we work and how we train and
what are the profile of our employees.
And we should use that data.
We should freely share what we do with.
The company that is being sold or, or ifour company is being sold or we're being
(12:33):
acquired, what, what is your turnover?
What is.
Many different employee dataperspectives that we can share.
And it's very helpful.
We were in a one acquisition where, Imean, we were being acquired and you
would think if you're on the, beingon the acquired end, that people would
(12:54):
be uncertain it's change and thatpossibly people would be leaving.
And in fact, our turnover was almost halfof what it was of the acquiring company.
Dave (13:07):
Oh
Lora (13:08):
wow.
And if I were the acquiring company,I, I'd be asking, how can that be?
We're being acquired.
You would think that theuncertainty would be on our side.
And I think there are some verystrong steps that we, that we took.
I, I can't under emphasize, I justcan't underemphasize communication.
(13:28):
I can't underemphasize it
Dave (13:30):
or overemphasize, depending on either.
Lora (13:32):
Yeah.
And I always come back tothe value of transparency.
I know that folks want toknow what's going on and
sometimes you just don't know.
You just don't know, but reallybelieve in when you're talking to
the other firms and you're talkingto the CFO or anyone, we have data.
(13:55):
Give them data.
Yeah.
Give facts, facts speak truth,and HR needs to rely on facts
as much as any other function.
Dave (14:05):
That, it causes me to ask now a whole series of questions,
but I need to stay on task here.
Let's go, let's go to,now we're at closing day.
You're HR, what happens on closing day?
But what are your considerationsmaybe for closing day?
Lora (14:22):
Yeah, so once you get to closing day, it really is
it's really a closing day.
I call it in day one, right?
Again, I'm going to go back tocommunication and what's going to
happen because frankly prior to that,there's not a lot of what about me's
in the conversations with employersbecause we haven't been able to
(14:44):
give the acquiring company a wholelot of information and hitting the
ground running on day one in terms ofcommunications and most likely it is
You know, as of today, now we have this,you're going to meet with your manager.
We're going to have an interim planor structure for your function.
(15:08):
But within the next 30 days, here'swhat we're going to do, going to do.
They don't have to have the answer,but they have to know what's going to
happen from an operational structure,from a systems and controls, from
business plans, you're being acquired.
I don't know what the newcompany's business plans are.
I know what ours were, but I'mnot really sure what yours are.
(15:29):
What what's the budget for my function,you know, all of these things.
So.
On closing in day one, you,you have to be, I'm going to go
back to my word, transparent.
Here's what we know.
Here's what we don't know.
But I will tell you, Iwill give you an example.
When I was with PepsiCo, I talkedabout that and we were spun off.
And we were spun off andwe became yum brands.
(15:52):
Now you can imagine we work forPepsiCo and they go, guess what?
You now work for yum.
And we were all like, Oh my gosh,I'm going to tell my friends.
I work for yum.
They did a, an outstandingand marvelous job on day one.
They had a celebration.
Now remember PepsiCo is.
multinational, whether you're inIsrael or China, it was all simulcast.
(16:17):
And this was five years ago, but theymade a big deal out of it, a big deal.
They shirts and hats and whatever to allof us on day one, but it made you feel
like you were part of the new company.
They wanted you, you were integralto what was going to happen.
And that is such a great example ofhow it can go really, really well,
(16:43):
because people just want to know what'sgoing on and what's the organization
that, that I'm going to be a part of.
So it, it, it is a celebration.
And it should be, but again, it'svery important for the executives
or your manager to absolutely makesure that they have those one on one
(17:05):
conversations with you and, and behonest and transparent about what
they know and what they don't know.
Dave (17:12):
It seems rather critical under the circumstances that, and I say this
because usually I'm dealing with theowners of the business or the C suite.
Yeah.
So I, I am not seeing howthe information filters down.
They don't want to pay me to do that.
No, no criticism.
I don't blame them.
I'm not a specialist.
In this area, but I get it now, likeI've never really heard it before at this
(17:36):
level about the information and some ofthe disruption that could obviously come
to any employee because they think thattheir job, their future is being impacted.
Let's then go to the short time afterclosing and you are looking at it
from an HR standpoint, both from thesell side and the buy side, let's
look for the sell side if you're HR.
(17:58):
How do you look at all this?
You know, we're done, everythingis closed, but you still got some
responsibilities, needless to say,in going forward, that your, your job
doesn't end immediately, although tobe fair, a lot of times the HR job.
Right or wrong seems to go away in favorof the buyer's HR professional, but
Lora (18:19):
absolutely.
Dave (18:20):
Yeah.
How do you wind that up or how do yougo forward, at least on the sell side?
Let's start there and thenwe'll jump over to the buy side.
Lora (18:28):
You know, I, again, most recently I was on, on the, on the sell side.
I've always looked at it as it's my jobto be an advocate for our employees and
whether or not the acquiring company.
Okay.
Is interested in and I stillfeel as though it's my job.
It's our executive's job.
It's everyone's job to make sure thatour employees are seen That they're
(18:50):
heard and we can do that whetherthey ask for it or not In some cases,
unfortunately, they don't that is that'sthe expectation I have for myself.
I always think it's Best.
I mean, I'm an employee too, right?
It's so it's really somewhat easy tosay, okay, what do I want to know?
Because I'm an employee.
(19:11):
So when you put that lens on, it makes ita little easier to say, gosh, what are the
things that You know, that, that I wantto know again, I mean, if you think about
it and you're even starting a companyjust from scratch, what would you do?
I mean, the, the problem, thefirst things that come to mind
(19:31):
is that you want a vision, right?
You want a mission.
What are you doing?
What's our new brand identity?
Because, you know, generallyyou're combining two different
things with, or two differentcompanies with different brands.
So what is, What is your new brandidentity going to be butchered?
What's your employee value proposition?
(19:52):
What are we in this for and thenreally building a new employer brand
because inevitably again, it's peopleand We want to make sure that we're
very clear about what our cultureis, what, what is acceptable.
How do we play together both fornew employees that are coming in and
(20:13):
current employees that are coming in?
So while I say I've never beenin marketing, I, I feel as
though my job in HR is marketing.
I mean, I'm every day we are quoteselling to our employees the value that
the company Brings to them the value theycan bring to the company, how we do that
from training to career opportunities.
(20:35):
And again, putting yourself, takingoff the hat that you wear every day
and putting on just, I'm an employeeof this company, of this new co,
what do I, what do I want to know?
What do I really want to know?
Dave (20:51):
So let, let's slide to the buy side.
You're the buy side HR person.
What are you doing?
Lora (20:57):
Yeah.
So again, I think sometimes it's easyto, to, to give examples when, when
we were acquired, when we bought acompany about our same size, honestly.
I don't know.
Certainly you're in more control.
Okay.
Right.
So again, I'll go back to fact baseddata based decision making, whether
(21:18):
it's your integrating purchasing oryou're integrating people, you want to
know what you're getting, what are theskill sets, and we spent a lot of time.
Going through what we thought new codewould look like the skill sets that
maybe from our side, the buy side, wecould use a little ramping up some more
(21:41):
expertise that we didn't have in house.
Did they have that in house ifwe're looking to grow the business,
which is obviously what it isand where we are going to be,
what kind of skills did we need?
Did you have those?
Can we train to get those?
And the reality is they're goingto probably be some downside.
(22:04):
There's going to be some downsizing.
That's just the reality.
And while you don't have thoseconversations with the team ahead of
time, that is something that I would.
Chat with, with the other head ofHR, certainly not giving away any
information on what I was goingto do, but you can't have overlap.
(22:25):
I mean, that's just the reality.
So you want to make sure that you,you get the folks on board that have
the skillset you need, but I thinkalso more as important is having
people with the right attitude.
And even my team, and most recentlywhen we were being acquired.
You know, I've said, whatever youdo, don't put your head in the
(22:46):
sand, be seen, be visible, raiseyour hand, say, sure, I'll do this.
Doesn't matter if you don't know how to doit, because again, put yourself on there.
So they want people thatwant to be here, right?
Want enthusiasm.
I don't know how to do that,but I'll figure it out.
So I think part of thejob is leading HR as.
(23:08):
Having those conversations, notwithin your own team, but everyone
with other teams and say, folks,it hasn't been decided yet.
So it's changed.
Change isn't all bad.
Change isn't all bad.
This could be a really good thing, but,but keep don't hide, let them see you,
let them know you're excited about this.
And sure.
You're a little scared.
Change is scary, but it canalso work out very well for you
Dave (23:33):
better than you might expect.
Lora (23:34):
Yeah.
You know, I, as I said, I'vebeen through merger acquisition,
divestiture, bankruptcy, andthey've all worked out for me.
You know, and I would say it's, it wasn'tprobably that I was the best or the
brightest, but I was certainly willingto do it and went in with, I can do
this and I can help and yeah, I'm notreally sure what's going on and scary,
(23:58):
but that's okay and that's how you grow.
That is how you grow.
Dave (24:03):
You mentioned the culture is not just one thing.
It is everything.
And I hear this from a lot of places.
Companies that are being bought or sold,or culture, or culture, or culture.
Help, help me with that.
It helped define that because it seemsto be a nebulous and a very subjective
(24:23):
selling point for many companies.
Lora (24:25):
Yeah.
I start out by saying that culturesare different and culture clashes
can have very serious consequences.
And certainly, whenever you're goingthrough a merger, a failed transaction
is not the expectation that you'regoing through, or a decrease in, Any
(24:46):
kind of business for performance.
And again, it goes backto managing your culture.
So I talked earlier about a groupthat we used out of Chicago that did
this cultural gap analysis for us.
You know, it was really interesting.
So think about it.
You have a company over here.
(25:06):
They're very autocratic.
Company B is very democratic.
And Company a, I mean, we, theyjust ask questions on a scale.
Do you feel free to speak up or do younot speak up until you're spoken to?
Do you understand the vision?
Do you not, you know, And, and realizingwhere, where there are things that
you have in common, which are great.
(25:27):
You can build on those, but moreimportantly, the ones, especially in
terms of how you manage or how the companyis managed very democratically open.
Versus no, it's very hierarchical.
Those can be some huge cultural clashesand those have very serious consequences.
So getting, again, it goes back togetting information and data and
(25:52):
finding out what those differencesare and saying, okay, number one,
don't know that we're going to fix it,but acknowledge that you know, this.
This is how we have always worked.
We understand company Bis, is much more open.
You have town hall meetings.
Anybody can ask questions.
(26:12):
They're not pre sentin all of those pieces.
Talk about culture and the senior people.
I mean, that's the reason youget paid to do what you do.
You've got to be able tounderstand that, have those
conversations and say, we know that.
You know, here's, here's theway that we lead, or we're very
(26:35):
interested on how you do that.
But understanding the differences, beingtransparent about those differences,
and then saying, we'd like to maybemove a little bit towards being a little
bit more democratic or whatever it is.
But it's, it's at least puttingthe stake in the ground.
(26:56):
There's nothing then worse,worse, I think, than uncertainty.
And I think that's the answer ofhonestly, in mergers, uncertainty causes
significant insecurity and employees.
And the more you can do to talk aboutsome kind of certainty, the better.
Dave (27:18):
Well, you nailed it because I know I'm working on several acquisitions right
now and you're always pushing either sideof the ledger for really for transparency
and basically so people understand.
You don't have to like it,but you want to let them know.
What's going on so you can make agood evaluation, but you bring it to
(27:38):
an interesting level because I've notseen it and again, because I think
it goes on internal the companies.
I'm not seeing that type of transparencyin a lot of companies, and I say that
because I don't know more than I'm not.
I'm not here to suggestthat it's not going on.
So that's that's very good insight.
Lora (27:56):
I think some, you know, I've been in a few and and they Transcribed
They want this new culture to,to kind of emerge organically.
Dave (28:07):
So, so drill down and yeah, drill down on that.
W what, what is the new,is that an amalgamation?
Is it, what does that mean?
What are the pros and cons?
Lora (28:17):
You know, it, Again, if you just talk about brand identity for
the new company, most that I've workedfor, the name of the old company
isn't the same as the new company.
They've, they've joined them, or they'vecome up with a whole new, so you're
coming up with a whole new brand forexternal, for shareholders, for customers.
(28:38):
You need to do the samething for employees.
We have a new brand and what does that,this new brand identity look like?
And what does that mean to me?
And it goes back to being verydisciplined about what your vision
statement is or your vision is.
What's your mission really, you know, tobe the best blah, blah, blah, blah, blah.
(29:02):
Well, what is it?
And again, I, I, I don't think that froman HR perspective, it's any different
than any other piece of the business.
You, you make decisions based upondata, whether you're trying to sell a
widget, you're trying to sell peopleon working for your, your company.
You've got to make sure that you're,that you're, your culture It's
(29:25):
clear, it's accessible, and folksare reading what they want to hear.
But again, I'll tell you, it's reallychanged, gosh, in the last 25 years.
Employees can find out anything they want.
As the CEO or anyone else that goesout there and wants to say, You know,
we're blah, blah, blah, blah, blah.
(29:46):
They can say it and employers aregoing to get on Tik TOK or LinkedIn.
And they're going to find this videothat doesn't exactly mesh with what
they're being told about, about culture.
So.
As I've said, you have to be,you have to be very clear on
expectations and words because boy,you can dissect them over and over.
(30:10):
And I personally, Ithink it's a great thing.
I think it's a great thing.
I can, I'm sure same with when you'reinterviewing for jobs, you're like,
I don't, seems like a nice company.
I don't know.
I mean, how do you, how,how did you find out?
You really couldn't find out today.
It's very easy to find out about,about culture with all the different
websites you can, where you canchoose, you can find out what turnover
(30:34):
is and everything else, especiallyin a publicly traded company.
And those are all great datapoints for employees to have.
And frankly, We should celebratethose very important things.
Dave (30:47):
So, let's summarize.
Top three things any HR professional,and for that reason any owner, let's
not limit it to HR, but any owner of Csuite should consider in an acquisition.
Lora (31:02):
Yeah, I would tell you the first thing that just
comes to mind is transparency.
Just be transparent.
It's hard to be real transparent,especially going through it.
But if you don't fill in the blanks,they'll get filled in for you.
And generally they aren't,it's not the right answer.
Dave (31:24):
That is very good.
Lora (31:25):
So be transparent.
If you don't know, say, I don'tknow, we, we will be looking at it.
It's not going to be inthe first 60 or 90 days.
Because here's what we will be working on.
So to me, number one istransparency, probably tied with
number two, which wouldn't surpriseyou, which is communication.
(31:47):
You can't, you really can't overcommunicate and that's not just email.
That's.
Get out of your office, go talk topeople, see how they're feeling.
I have seen some fabulous CEOs that I'veworked for that are so good at this.
And boy, it just bringsthat temperature down.
Whether you're doing town hall meetings,certainly zoom is, is taking precedent
(32:13):
over so much communication, butcommunicate, communicate, communicate.
We would do a series of calls.
We would just walk through, okay,here's what we know from a salary
perspective, again, what doemployees want to know about equity?
What's going to happen to that?
What's going to happento my medical benefits.
(32:34):
But so we would every two weeks.
We would say, okay, we talked about this.
Just a reminder.
Here's what, what we've learned more andkeep them going with you because they,
during all these deals, there's all theseconversations going on in the background
that you can't always share, but there'sa lot of things that are being decided.
So get them out there.
(32:55):
No, one's going to meet, read the mergeragreement, except frankly, for the
lawyers and me or the CFO, because wehave to make sure that we follow it.
So.
Make sure they know what has beendecided because they want to know.
And then the third probably takeaway forme as whether you're on the buying side,
the selling side, you're part of the dealteam is just having a positive mindset.
(33:18):
It is, it is a mountain to climbwhen you're, when you're trying
to merge and acquire, and it'sgoing to be a work in progress.
Honestly, for quite a long time in afirm, integration is not going to take
90 days, 60 days, a year, two years.
It is a process and keepingthat in mind, keeping a positive
(33:43):
mindset and saying, okay, therecould be opportunity for me here.
Conversely, There might notbe, but yeah, I always see it
as an opportunity to learn.
I'll say to folks, quitfighting the current.
If the current is going this way, thenfocus on kind of steering your own ship.
(34:04):
And if this isn't whereyou want to go, it's okay.
It's okay to make peace with that, withthose things that you can't control.
And during a merger, mostof it, you can't control.
Control what you have and takecare of your take care of yourself.
Dave (34:24):
So ladies and gentlemen, I gotta tell you I've learned quite a bit here
I've got a special surprise here becausewhat I didn't tell you through this whole
process is laura's middle name is cider.
Yes She's my sister and I havenever had the opportunity or I guess
we never felt comfortable becausewe both work in environments.
(34:44):
I obviously as an attorney attorneyclient privilege and she for a publicly
traded company, we didn't get into thesekinds of discussions at this level.
So I have honestly learned a lot.
I'm walking away with informationthat I need to think about.
I hope you all.
As well, see some opportunities, maybefor improvement, at least knowledge or
(35:05):
understanding that will help you whetheryou're on the buy side or the sell side.
So I want to thank Laura CiderCheatham for her appearance here today.
If at any point you're in needof assistance, go to davidsider.
com and schedule a consultation.
Hey guys, if you would, Iwould really appreciate it.
(35:25):
If you would subscribeto the show, rate it.
And leave me a comment in yourfavorite podcast platform, such
as Spotify or Apple podcast.
Ladies and gentlemen,until next time, be safe.
And I want you to know that this podcastis provided for educational purposes.
(35:48):
It does not constitute legal advice.
And it is not intended to establishan attorney client relationship.
The recommendations contained in thepodcast are not necessarily appropriate
for every individual or business indetermining the best course of action.
Business owners should consult with anattorney on their distinct circumstances.
Show me the way episode 51, the integration docent.
Hey, ladies and gentlemen, I'mexcited about this because I do
not get into HR matters much.
It's get delegated to either the buy sideor the sell side clients that I represent.
You're going to learn something.
I think that's very important.
The three Magic terms are the threeideas you want to bring to the table in
(00:25):
dealing with the HR complications andbenefits of any merger or acquisition.
So stay tuned.
Oh, by the way, there's a specialsurprise at the end that you will want
to listen for the whole podcast to get.
Welcome
(00:53):
to show me the way a podcastpresented by Spencer Fain, LLP
about business succession planning.
The merger and acquisitionexperience and successful exits.
I am your host, Dave Sider.
Kids, we're going to have a specialsurprise, but you have to wait until
the end of the podcast before I reveal.
It'll be worth it.
So hang in there.
(01:14):
Joining me today on our show isLaura Cheatham, recently retired
head of human resources atKansas city, Southern industries.
And she's going to talk about thesteps necessary to properly integrate
a selling company into a new entity.
Laura, welcome to the show.
Lora (01:33):
Well, thanks Dave.
And good afternoon.
Thanks for inviting me to join you.
This topic is very near and dearto my heart since I've been living
through it more than once and mostrecently in the past couple of years.
So I look forward to the discussionand certainly giving you some of my
(01:53):
insights and perspectives as I see them.
Dave (01:57):
Excellent.
Really appreciate that.
But I always like to start offour podcast by letting people
get to know you a little bit.
So tell us a little bitabout your background, your
early business experiences.
Lora (02:09):
Well, I would say I'm a pure Midwesterner.
I recently kind of counted up howmany places I've lived in the Midwest
from Minnesota to Iowa to Colorado.
I lived for a time in Texas.
I think I've moved 11 times.
So.
I describe myself as a,as a true Midwesterner.
I started my career out, if you will,as a school teacher for about seven or
(02:34):
eight years, decided to go back and getmy MBA and went into the working world.
My kind of first foraywas really in operations.
I was fortunate enough to work fora division of PepsiCo where we'll
talk about that later, just in termsof the real learning experiences.
(02:57):
And I was in operations forprobably half of my career.
And then I jokingly say, I was probablysomewhat frustrated with Whatever I
thought the value Ad for hr was andmaybe I was too focal and I ended up
Going into hr and I have been in humanresources, which I thoroughly enjoy
(03:19):
and have been doing that for Probablythe last 25 years of of my career So
as I had said to dave, I think i'vebeen through a merger and acquisition
a divestiture a spinoff Name it.
I've probably been through it a bankruptcySo I think my perspective in all of those
could be certainly interesting to some.
(03:41):
Well, let's
Dave (03:42):
talk about this in terms of HR.
And I think specifically what is HRdo in a company and what does HR do
in and during the acquisition of abusiness or the sale of a business?
Lora (03:55):
Yeah.
Great question.
So.
We always talk about in terms ofmergers or acquisitions synergies.
And we always talk about operationalsynergy, purchasing synergies, but
at the end of the day, it doesn'tmatter really what the company is.
People are the greatest assets thatyou're going to have in any company.
(04:16):
And from an HR perspective, ourjob is to make sure whatever.
The new company is looking for that.
We are, are ensuring that ouremployees understand what's
going on and communication.
I think we all know thatcommunication with shareholders,
with customers is very important.
(04:38):
It's that three legged stool andemployees are as much a part of
that integration as anything.
I'm sure everyone was familiarwith different statistics.
Thanks.
And there are many differentstatistics out there that would tell
you between 70 and 90 percent of allM& A deals will not be successful.
(04:58):
What does that mean?
I don't know.
You can describe that, but it, itis interesting today, literally just
about an hour ago, I received an emailfrom a friend of mine that worked at
a company and said that they had beenbought by private equity group two
years ago, and that their company wasBeing reacquired, if you will, by the
(05:21):
original odor, because it didn't work.
There are many reasonsthat they don't work.
And obviously one of them is notonly integration of operations, but
integration of culture and integrationof people into that culture.
Dave (05:36):
So when you're on a sales side and you're running HR, you're putting together
a lot of information, what we calldue diligence to share with the buyer.
How do you, how did you go about handlingand preparing for that, for delivery to
a buyer, the buyer's representatives?
Lora (05:53):
Yeah, good question.
It's interesting because, Especiallypublicly traded companies that are heavily
regulated, which the last two acquisitionsslash mergers were both of those, because
we're publicly traded, there were certaincertain types of information that we
could not share, but there is certainlya lot of information that you can share.
(06:15):
And I think that certainly from anHR perspective, you want to make
sure that you are managing yourcultural integration, frankly.
Or it's going to manage you.
And one of the more.
Interesting processes.
We went through at one of thepublicly traded companies I'd worked
for actually was a utility company.
(06:36):
We did a cultural gap analysis and itwas a survey that company helped me with.
And we gave that surveyto our current employees.
We gave the survey, the same survey tothe company we are looking to acquire.
And so why did we do that?
You know, we wanted to find thesimilarities, the differences.
(06:59):
So that we could better understand.
What the challenges were going to be,because while you might be acquiring
a company that looks like you andacts like you is in the same industry,
all companies are not the same.
So I think it was probably one of the bestprocesses and in the three or four mergers
(07:20):
acquisitions, I've been through that wasprobably not necessarily only helpful to
management, but I'm going to continue togo back and talk about employees, they.
They want to be heard.
They want to feel like they've been heard.
And there are many different ways youcan do that because at the end of the
(07:40):
day, you want this, the company, thefirm wants us to be successful, period.
That's the goal.
And however you can do that.
And there are certainly manydifferent ways to do that.
I, I do believe that was probablyone of the better integration
processes that I've been through.
Dave (08:01):
You've looked at that on the sell side.
Anything different that you lookat when you're on the buy side
as you go through the process?
Lora (08:08):
Yeah, it's, I don't know that there's a significant
amount of difference.
I really, it really depends onthe culture and the values and
beliefs of senior management.
Hmm.
You know, it's, it'sunfortunate sometimes.
I've been through some where it really isall about the integration of operations
(08:34):
and identifying and quickly realizingthe synergies within the operation.
So again, it goes back to, unless maybeit's AI, it really is all about people.
You can't, You can't move trains.
You can't have electricitygoing to homes without people.
So it's very important for theleadership, the CEO and the board to
(09:01):
continually ask, what are you doing?
And that is our role.
That is our role to find out wherewe are and, and how are we doing
this integration with people?
Because I have certainly seenthat a few times that buyers
are going to find out too late.
That their integration plans can'tbe implemented quickly or at all.
(09:26):
And that can be somewhat disastrousbecause at the end of the day, you
really want, I call it a cohesiveculture, probably not the same.
It was, was with the, with thebuying company or the selling
company, but it has to be cohesive.
And whatever that looks like for you
Dave (09:45):
Let's drill down by maybe doing a little walking tour through
maybe three components the decisionmaking process closing day Day
one post merger to your points.
This might be the right time to talkabout integration in those In those terms.
So let's start with decision makingwhat, what comes to mind when you're
(10:07):
looking as an HR professional, whatthe decisions that you need to make.
And, and when I say decisions,you're really, it's the advice.
I think you're giving to the C suitemanagement or the world of mid owners.
Lora (10:19):
So, you know, there are different phases.
I mean, HR, isn't just about managingmedical or dental, a big piece of what
we do obviously is, is around technology.
Ensuring that we communicate effectivelywith employees and gosh, we all know we're
pretty much dependent upon our computersand our phones anymore to find out things.
(10:41):
So.
One of the first things wereally had to talk about was the
integration of technology and howdo our authorities get information?
Because we want to be ableto give them information.
In this day and age, I was thinkingabout it earlier today, trying to find
out about the company that's buying you.
It's quite easy today.
You can go out to TikTok, LinkedIn,you can, you can get a feel and
(11:03):
a sense for what the companyis or what they believe in.
And that's Marketing and reallythat's internally with HR.
That is what we do.
We do employee marketing for whateverwe're doing, whether it's training or
medical or, or helping them understandwhat this merger is going to look like.
(11:26):
So.
Even, even when it's not, when we're nottalking about roles and careers from a
decision making perspective, there's alot of employee information and data.
I mean, if you think about it, you'vegot two different sets of everything.
Medical and leave and training.
(11:47):
And what are we going to do?
Who's who's on first and what's on second.
So honestly, from the get go, youhave to, unlike any other it decision,
what are we going to do and what arewe going to use and the best fit.
And they have always hounded that HR, likeany other function, should rely on data.
(12:09):
We have information.
We know what it is.
It shouldn't be how we feel.
We, we, we know the critical piecesof how we work and how we train and
what are the profile of our employees.
And we should use that data.
We should freely share what we do with.
The company that is being sold or, or ifour company is being sold or we're being
(12:33):
acquired, what, what is your turnover?
What is.
Many different employee dataperspectives that we can share.
And it's very helpful.
We were in a one acquisition where, Imean, we were being acquired and you
would think if you're on the, beingon the acquired end, that people would
(12:54):
be uncertain it's change and thatpossibly people would be leaving.
And in fact, our turnover was almost halfof what it was of the acquiring company.
Dave (13:07):
Oh
Lora (13:08):
wow.
And if I were the acquiring company,I, I'd be asking, how can that be?
We're being acquired.
You would think that theuncertainty would be on our side.
And I think there are some verystrong steps that we, that we took.
I, I can't under emphasize, I justcan't underemphasize communication.
(13:28):
I can't underemphasize it
Dave (13:30):
or overemphasize, depending on either.
Lora (13:32):
Yeah.
And I always come back tothe value of transparency.
I know that folks want toknow what's going on and
sometimes you just don't know.
You just don't know, but reallybelieve in when you're talking to
the other firms and you're talkingto the CFO or anyone, we have data.
(13:55):
Give them data.
Yeah.
Give facts, facts speak truth,and HR needs to rely on facts
as much as any other function.
Dave (14:05):
That, it causes me to ask now a whole series of questions,
but I need to stay on task here.
Let's go, let's go to,now we're at closing day.
You're HR, what happens on closing day?
But what are your considerationsmaybe for closing day?
Lora (14:22):
Yeah, so once you get to closing day, it really is
it's really a closing day.
I call it in day one, right?
Again, I'm going to go back tocommunication and what's going to
happen because frankly prior to that,there's not a lot of what about me's
in the conversations with employersbecause we haven't been able to
(14:44):
give the acquiring company a wholelot of information and hitting the
ground running on day one in terms ofcommunications and most likely it is
You know, as of today, now we have this,you're going to meet with your manager.
We're going to have an interim planor structure for your function.
(15:08):
But within the next 30 days, here'swhat we're going to do, going to do.
They don't have to have the answer,but they have to know what's going to
happen from an operational structure,from a systems and controls, from
business plans, you're being acquired.
I don't know what the newcompany's business plans are.
I know what ours were, but I'mnot really sure what yours are.
(15:29):
What what's the budget for my function,you know, all of these things.
So.
On closing in day one, you,you have to be, I'm going to go
back to my word, transparent.
Here's what we know.
Here's what we don't know.
But I will tell you, Iwill give you an example.
When I was with PepsiCo, I talkedabout that and we were spun off.
And we were spun off andwe became yum brands.
(15:52):
Now you can imagine we work forPepsiCo and they go, guess what?
You now work for yum.
And we were all like, Oh my gosh,I'm going to tell my friends.
I work for yum.
They did a, an outstandingand marvelous job on day one.
They had a celebration.
Now remember PepsiCo is.
multinational, whether you're inIsrael or China, it was all simulcast.
(16:17):
And this was five years ago, but theymade a big deal out of it, a big deal.
They shirts and hats and whatever to allof us on day one, but it made you feel
like you were part of the new company.
They wanted you, you were integralto what was going to happen.
And that is such a great example ofhow it can go really, really well,
(16:43):
because people just want to know what'sgoing on and what's the organization
that, that I'm going to be a part of.
So it, it, it is a celebration.
And it should be, but again, it'svery important for the executives
or your manager to absolutely makesure that they have those one on one
(17:05):
conversations with you and, and behonest and transparent about what
they know and what they don't know.
Dave (17:12):
It seems rather critical under the circumstances that, and I say this
because usually I'm dealing with theowners of the business or the C suite.
Yeah.
So I, I am not seeing howthe information filters down.
They don't want to pay me to do that.
No, no criticism.
I don't blame them.
I'm not a specialist.
In this area, but I get it now, likeI've never really heard it before at this
(17:36):
level about the information and some ofthe disruption that could obviously come
to any employee because they think thattheir job, their future is being impacted.
Let's then go to the short time afterclosing and you are looking at it
from an HR standpoint, both from thesell side and the buy side, let's
look for the sell side if you're HR.
(17:58):
How do you look at all this?
You know, we're done, everythingis closed, but you still got some
responsibilities, needless to say,in going forward, that your, your job
doesn't end immediately, although tobe fair, a lot of times the HR job.
Right or wrong seems to go away in favorof the buyer's HR professional, but
Lora (18:19):
absolutely.
Dave (18:20):
Yeah.
How do you wind that up or how do yougo forward, at least on the sell side?
Let's start there and thenwe'll jump over to the buy side.
Lora (18:28):
You know, I, again, most recently I was on, on the, on the sell side.
I've always looked at it as it's my jobto be an advocate for our employees and
whether or not the acquiring company.
Okay.
Is interested in and I stillfeel as though it's my job.
It's our executive's job.
It's everyone's job to make sure thatour employees are seen That they're
(18:50):
heard and we can do that whetherthey ask for it or not In some cases,
unfortunately, they don't that is that'sthe expectation I have for myself.
I always think it's Best.
I mean, I'm an employee too, right?
It's so it's really somewhat easy tosay, okay, what do I want to know?
Because I'm an employee.
(19:11):
So when you put that lens on, it makes ita little easier to say, gosh, what are the
things that You know, that, that I wantto know again, I mean, if you think about
it and you're even starting a companyjust from scratch, what would you do?
I mean, the, the problem, thefirst things that come to mind
(19:31):
is that you want a vision, right?
You want a mission.
What are you doing?
What's our new brand identity?
Because, you know, generallyyou're combining two different
things with, or two differentcompanies with different brands.
So what is, What is your new brandidentity going to be butchered?
What's your employee value proposition?
(19:52):
What are we in this for and thenreally building a new employer brand
because inevitably again, it's peopleand We want to make sure that we're
very clear about what our cultureis, what, what is acceptable.
How do we play together both fornew employees that are coming in and
(20:13):
current employees that are coming in?
So while I say I've never beenin marketing, I, I feel as
though my job in HR is marketing.
I mean, I'm every day we are quoteselling to our employees the value that
the company Brings to them the value theycan bring to the company, how we do that
from training to career opportunities.
(20:35):
And again, putting yourself, takingoff the hat that you wear every day
and putting on just, I'm an employeeof this company, of this new co,
what do I, what do I want to know?
What do I really want to know?
Dave (20:51):
So let, let's slide to the buy side.
You're the buy side HR person.
What are you doing?
Lora (20:57):
Yeah.
So again, I think sometimes it's easyto, to, to give examples when, when
we were acquired, when we bought acompany about our same size, honestly.
I don't know.
Certainly you're in more control.
Okay.
Right.
So again, I'll go back to fact baseddata based decision making, whether
(21:18):
it's your integrating purchasing oryou're integrating people, you want to
know what you're getting, what are theskill sets, and we spent a lot of time.
Going through what we thought new codewould look like the skill sets that
maybe from our side, the buy side, wecould use a little ramping up some more
(21:41):
expertise that we didn't have in house.
Did they have that in house ifwe're looking to grow the business,
which is obviously what it isand where we are going to be,
what kind of skills did we need?
Did you have those?
Can we train to get those?
And the reality is they're goingto probably be some downside.
(22:04):
There's going to be some downsizing.
That's just the reality.
And while you don't have thoseconversations with the team ahead of
time, that is something that I would.
Chat with, with the other head ofHR, certainly not giving away any
information on what I was goingto do, but you can't have overlap.
(22:25):
I mean, that's just the reality.
So you want to make sure that you,you get the folks on board that have
the skillset you need, but I thinkalso more as important is having
people with the right attitude.
And even my team, and most recentlywhen we were being acquired.
You know, I've said, whatever youdo, don't put your head in the
(22:46):
sand, be seen, be visible, raiseyour hand, say, sure, I'll do this.
Doesn't matter if you don't know how to doit, because again, put yourself on there.
So they want people thatwant to be here, right?
Want enthusiasm.
I don't know how to do that,but I'll figure it out.
So I think part of thejob is leading HR as.
(23:08):
Having those conversations, notwithin your own team, but everyone
with other teams and say, folks,it hasn't been decided yet.
So it's changed.
Change isn't all bad.
Change isn't all bad.
This could be a really good thing, but,but keep don't hide, let them see you,
let them know you're excited about this.
And sure.
You're a little scared.
Change is scary, but it canalso work out very well for you
Dave (23:33):
better than you might expect.
Lora (23:34):
Yeah.
You know, I, as I said, I'vebeen through merger acquisition,
divestiture, bankruptcy, andthey've all worked out for me.
You know, and I would say it's, it wasn'tprobably that I was the best or the
brightest, but I was certainly willingto do it and went in with, I can do
this and I can help and yeah, I'm notreally sure what's going on and scary,
(23:58):
but that's okay and that's how you grow.
That is how you grow.
Dave (24:03):
You mentioned the culture is not just one thing.
It is everything.
And I hear this from a lot of places.
Companies that are being bought or sold,or culture, or culture, or culture.
Help, help me with that.
It helped define that because it seemsto be a nebulous and a very subjective
(24:23):
selling point for many companies.
Lora (24:25):
Yeah.
I start out by saying that culturesare different and culture clashes
can have very serious consequences.
And certainly, whenever you're goingthrough a merger, a failed transaction
is not the expectation that you'regoing through, or a decrease in, Any
(24:46):
kind of business for performance.
And again, it goes backto managing your culture.
So I talked earlier about a groupthat we used out of Chicago that did
this cultural gap analysis for us.
You know, it was really interesting.
So think about it.
You have a company over here.
(25:06):
They're very autocratic.
Company B is very democratic.
And Company a, I mean, we, theyjust ask questions on a scale.
Do you feel free to speak up or do younot speak up until you're spoken to?
Do you understand the vision?
Do you not, you know, And, and realizingwhere, where there are things that
you have in common, which are great.
(25:27):
You can build on those, but moreimportantly, the ones, especially in
terms of how you manage or how the companyis managed very democratically open.
Versus no, it's very hierarchical.
Those can be some huge cultural clashesand those have very serious consequences.
So getting, again, it goes back togetting information and data and
(25:52):
finding out what those differencesare and saying, okay, number one,
don't know that we're going to fix it,but acknowledge that you know, this.
This is how we have always worked.
We understand company Bis, is much more open.
You have town hall meetings.
Anybody can ask questions.
(26:12):
They're not pre sentin all of those pieces.
Talk about culture and the senior people.
I mean, that's the reason youget paid to do what you do.
You've got to be able tounderstand that, have those
conversations and say, we know that.
You know, here's, here's theway that we lead, or we're very
(26:35):
interested on how you do that.
But understanding the differences, beingtransparent about those differences,
and then saying, we'd like to maybemove a little bit towards being a little
bit more democratic or whatever it is.
But it's, it's at least puttingthe stake in the ground.
(26:56):
There's nothing then worse,worse, I think, than uncertainty.
And I think that's the answer ofhonestly, in mergers, uncertainty causes
significant insecurity and employees.
And the more you can do to talk aboutsome kind of certainty, the better.
Dave (27:18):
Well, you nailed it because I know I'm working on several acquisitions right
now and you're always pushing either sideof the ledger for really for transparency
and basically so people understand.
You don't have to like it,but you want to let them know.
What's going on so you can make agood evaluation, but you bring it to
(27:38):
an interesting level because I've notseen it and again, because I think
it goes on internal the companies.
I'm not seeing that type of transparencyin a lot of companies, and I say that
because I don't know more than I'm not.
I'm not here to suggestthat it's not going on.
So that's that's very good insight.
Lora (27:56):
I think some, you know, I've been in a few and and they Transcribed
They want this new culture to,to kind of emerge organically.
Dave (28:07):
So, so drill down and yeah, drill down on that.
W what, what is the new,is that an amalgamation?
Is it, what does that mean?
What are the pros and cons?
Lora (28:17):
You know, it, Again, if you just talk about brand identity for
the new company, most that I've workedfor, the name of the old company
isn't the same as the new company.
They've, they've joined them, or they'vecome up with a whole new, so you're
coming up with a whole new brand forexternal, for shareholders, for customers.
(28:38):
You need to do the samething for employees.
We have a new brand and what does that,this new brand identity look like?
And what does that mean to me?
And it goes back to being verydisciplined about what your vision
statement is or your vision is.
What's your mission really, you know, tobe the best blah, blah, blah, blah, blah.
(29:02):
Well, what is it?
And again, I, I, I don't think that froman HR perspective, it's any different
than any other piece of the business.
You, you make decisions based upondata, whether you're trying to sell a
widget, you're trying to sell peopleon working for your, your company.
You've got to make sure that you're,that you're, your culture It's
(29:25):
clear, it's accessible, and folksare reading what they want to hear.
But again, I'll tell you, it's reallychanged, gosh, in the last 25 years.
Employees can find out anything they want.
As the CEO or anyone else that goesout there and wants to say, You know,
we're blah, blah, blah, blah, blah.
(29:46):
They can say it and employers aregoing to get on Tik TOK or LinkedIn.
And they're going to find this videothat doesn't exactly mesh with what
they're being told about, about culture.
So.
As I've said, you have to be,you have to be very clear on
expectations and words because boy,you can dissect them over and over.
(30:10):
And I personally, Ithink it's a great thing.
I think it's a great thing.
I can, I'm sure same with when you'reinterviewing for jobs, you're like,
I don't, seems like a nice company.
I don't know.
I mean, how do you, how,how did you find out?
You really couldn't find out today.
It's very easy to find out about,about culture with all the different
websites you can, where you canchoose, you can find out what turnover
(30:34):
is and everything else, especiallyin a publicly traded company.
And those are all great datapoints for employees to have.
And frankly, We should celebratethose very important things.
Dave (30:47):
So, let's summarize.
Top three things any HR professional,and for that reason any owner, let's
not limit it to HR, but any owner of Csuite should consider in an acquisition.
Lora (31:02):
Yeah, I would tell you the first thing that just
comes to mind is transparency.
Just be transparent.
It's hard to be real transparent,especially going through it.
But if you don't fill in the blanks,they'll get filled in for you.
And generally they aren't,it's not the right answer.
Dave (31:24):
That is very good.
Lora (31:25):
So be transparent.
If you don't know, say, I don'tknow, we, we will be looking at it.
It's not going to be inthe first 60 or 90 days.
Because here's what we will be working on.
So to me, number one istransparency, probably tied with
number two, which wouldn't surpriseyou, which is communication.
(31:47):
You can't, you really can't overcommunicate and that's not just email.
That's.
Get out of your office, go talk topeople, see how they're feeling.
I have seen some fabulous CEOs that I'veworked for that are so good at this.
And boy, it just bringsthat temperature down.
Whether you're doing town hall meetings,certainly zoom is, is taking precedent
(32:13):
over so much communication, butcommunicate, communicate, communicate.
We would do a series of calls.
We would just walk through, okay,here's what we know from a salary
perspective, again, what doemployees want to know about equity?
What's going to happen to that?
What's going to happento my medical benefits.
(32:34):
But so we would every two weeks.
We would say, okay, we talked about this.
Just a reminder.
Here's what, what we've learned more andkeep them going with you because they,
during all these deals, there's all theseconversations going on in the background
that you can't always share, but there'sa lot of things that are being decided.
So get them out there.
(32:55):
No, one's going to meet, read the mergeragreement, except frankly, for the
lawyers and me or the CFO, because wehave to make sure that we follow it.
So.
Make sure they know what has beendecided because they want to know.
And then the third probably takeaway forme as whether you're on the buying side,
the selling side, you're part of the dealteam is just having a positive mindset.
(33:18):
It is, it is a mountain to climbwhen you're, when you're trying
to merge and acquire, and it'sgoing to be a work in progress.
Honestly, for quite a long time in afirm, integration is not going to take
90 days, 60 days, a year, two years.
It is a process and keepingthat in mind, keeping a positive
(33:43):
mindset and saying, okay, therecould be opportunity for me here.
Conversely, There might notbe, but yeah, I always see it
as an opportunity to learn.
I'll say to folks, quitfighting the current.
If the current is going this way, thenfocus on kind of steering your own ship.
(34:04):
And if this isn't whereyou want to go, it's okay.
It's okay to make peace with that, withthose things that you can't control.
And during a merger, mostof it, you can't control.
Control what you have and takecare of your take care of yourself.
Dave (34:24):
So ladies and gentlemen, I gotta tell you I've learned quite a bit here
I've got a special surprise here becausewhat I didn't tell you through this whole
process is laura's middle name is cider.
Yes She's my sister and I havenever had the opportunity or I guess
we never felt comfortable becausewe both work in environments.
(34:44):
I obviously as an attorney attorneyclient privilege and she for a publicly
traded company, we didn't get into thesekinds of discussions at this level.
So I have honestly learned a lot.
I'm walking away with informationthat I need to think about.
I hope you all.
As well, see some opportunities, maybefor improvement, at least knowledge or
(35:05):
understanding that will help you whetheryou're on the buy side or the sell side.
So I want to thank Laura CiderCheatham for her appearance here today.
If at any point you're in needof assistance, go to davidsider.
com and schedule a consultation.
Hey guys, if you would, Iwould really appreciate it.
(35:25):
If you would subscribeto the show, rate it.
And leave me a comment in yourfavorite podcast platform, such
as Spotify or Apple podcast.
Ladies and gentlemen,until next time, be safe.
And I want you to know that this podcastis provided for educational purposes.
(35:48):
It does not constitute legal advice.
And it is not intended to establishan attorney client relationship.
The recommendations contained in thepodcast are not necessarily appropriate
for every individual or business indetermining the best course of action.
Business owners should consult with anattorney on their distinct circumstances.
Popular Podcasts
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.