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The people problem in mergers
Although three-quarters of the executives who have lived through mergers agree that retaining key talent is critical to successful integration, these talented people usually receive job inquiries within days of a merger announcement. To keep essential employees in a time of uncertainty, you should identify them before a deal is announced, establish clear guiding principles for selecting managers in the new company, and provide attractive (and intelligently structured) financial incentives for those you want to keep and for those who will have to depart.
The take-away: People problems are a major cause of failed mergers. Indeed, one of the few certainties in the M&A process is that essential employees will be tempted to jump ship. To keep them onboard, managers must move quickly, communicate clearly, and share information—as well as financial rewards.
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© 1992-2003 McKinsey & Company, Inc
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