Race for Tech Talent is on – and so is Keeping Them
Research suggests the majority of mergers and acquisitions fall short of achieving their strategic objectives. So why is Yahoo! acquired so many startups?
By Frieda Edgette (Founder, Novos)
Yahoo! CEO Marissa Mayer is making headlines again. As part of its growth strategy, Yahoo! is racing to bring on tech talent by acquiring small startups.
Research over the years cites that the majority of mergers and acquisitions (M&A) fall short of achieving their strategic objectives. Explanations are diverse and complex. There are ‘hard’ reasons like flawed strategy. There are ‘soft’ reasons like talent management and culture – the constant factor, from approach to integration, being uncertainty.
Will the deal close – or won’t it? Will I survive or be a casualty? Who will lead? How will my role change? What if…?
This environment is extremely stressful – so stressful that researchers Mitchell Marks and Philip Mirvis named this specific form of anxiety ‘merger syndrome’ back in the 1980s. Even after these questions are answered, merger syndrome’s ill effects can transfer over to the merged organization, resulting in distrust, increased conflict, absenteeism, reduced productivity and turnover. This is bad for individual well-being and bad for the bottom line.
Bloomberg’s Doug MacMillan shares that Mayer’s decision to bring on Jacqueline Reses as Chief Development Officer, a blended role of deal making and talent management (in essence: a mixture of ‘hard’ and ‘soft’), is an interesting move, recognizing that acquiring talent is only half of the equation.
Retaining talent is often the greater challenge.
Communication as a Game Changer
Whether a leader within the acquiring or acquired company, nurturing a climate of communication can change the game as to whether your talent stays or goes. Setting the communication climate begins with leadership’s communication style, messaging and behavior.
Below are five M&A practices for facilitating a climate of communication:
- Unite under a common vision. What’s the strategy? In order to bring organization members along, leadership must develop and share an honest, authentic story (or explanation) as to why the M&A took place immediately.
- Be a visible leader. One of the most common employee complaints of M&A management is that leadership isolates and disengages. There are many ways leadership can communicate about what is going on – both verbally and non-verbally – without breaking disclosure and transparency rules. Round the floor. Set up one-on-one coffee chat or drop-in opportunities. Share the latest updates even if there is no new information – share that. Show emotion. Be present.
- Build a shared identity. ‘Us’ vs. ‘them’ thinking may slow productivity significantly. Survivors of the acquiring company may feel their colleagues were replaced and be resentful. For talent coming over, transitioning from a lean start-up to a large organization like Yahoo! is a significant culture change. Bring it back to basics by creating environments for employees from both organizations to get to know one another on a human level. Host happy hours. Incorporate regular recognitions between employees into team meetings. Celebrate small wins as a team – and celebrate again!
- Prepare mid-management. Mid-management is the hub. They hear from the top down and from the bottom up. This position can be especially stressful.Equipping varying levels of management to speak knowledgably about the change diffuses potential rumors and uninformed speculation.
- Got it, Coach. Executive coaching assists in developing the EQ to read employees and their presumed needs. From a talent retention standpoint, this skill is vital. The coaching process can help identify foreseeable challenges and ways to mitigate, as well as provides a support system.
Increased visibility coupled with succinct, steady messages from leadership, enabling environments of inclusivity, and supporting all levels of the organization will begin to develop a culture of communication – increasing trust and credibility.
Blending ‘hard’ and ‘soft’ in one position? Interesting, Yahoo! – very interesting.
Photo credit: Leon Brocard on Flickr.
About the guest blogger: Frieda K. Edgette is Founder and Principal of Novos, a change management and coaching consultancy that helps individuals and organizations through strategic transitions. Frieda is also Founder of Courage to Run, a leadership initiative dedicated to mutually developing female professionals in business, on boards and to public service through, yes, running, brunching and collectively inspiring. She holds a MSc in Organizational and Social Psychology from the London School of Economics.