HR interim executives cover a broad scope of assignments. Often General Public and the Medias are immediately thinking “restructuring plans”, which requires a very specific know-how. It even happens that the Head of HR leaves the Company. The fields of interventions are extraordinarily varied:
- by Causality (maternity leave, illness, “interim” until the owner, or real transition from situation A to situation B)
- by Topic: merger, reorganization, regulatory compliance, internationalization, new payroll software, Time and Activity Management, etc, …
To illustrate with a typical case, here is described the common part of the missions merging two organizations, which are an important part of the Interim Management mission.
Merging two “Human” organizations
The success of a Merger is not obvious, Companies are systemic organizations where all elements are interacting : objectives, techniques, structures and cultures. So, it is a clash between two organizations and the Management of the Merger is the key to success or failure, and often creating a sterile or fertile monster.
Fusion is a procedure very legally framed ( Commercial Code and Labour Code mainly, but also Tax Code and Financial Markets Code if Companies are quoted ) that generates a multitude of tasks that will saturate the Administrative Staff and Management Team.
A Merger-Acquisition may create more difficulties to the Head of Human Resources rather than the Head of Finances. It should , indeed, not only to determine the fate of each employee individually, but also to harmonize the collective status, to come to a coherent representation of the employees, to unify , if possible social protection schemes, and finally , to correctly fill out documentation for Administration.
A défaut d’harmonisation, la nouvelle structure risque d’être ingérable et de décourager les bonnes volontés et les managers.
By nature, the HR function is to serve the Operational Departments , besides the economic objectives of the Merger must be clearly communicated. Success will result from the Merger of the Teams including:
- harmonization of Remunerations and Classifications,
- harmonization of the Working Time Organizations,
- harmonization of Social Matters,
- and harmonization of Procedures.
The expertise of the Senior Interim Executive should allow to take this opportunity improving the organization. He must avoid creating ” baronies ” or, when specificities, acquired individual benefits and any useless bureaucracy that will impact negatively the Management Costs.
One of the major objectives often is the effective date of the Merger. This may have significant financial and tax implications.
Failure of the calendar can generate a double fence, etc. .. The implementation of an incentive scheme for all employees could even be postponed for one year with all the social consequences that we can imagine .
The approach is basically that of a Business Plan which the Executive Committee will act as a Steering Committee, Head of HR closely with the CEO will often be the Project Leader and a triple communication will be implemented:
- For the Hierarchy: Managers are natural Staff Partners, it is essential to empower them to meet the legitimate concerns of the employees
- For representative bodies who have to be legally required to be informed/consulted in a comprehensive manner, and whose action of control must contribute to reassure staff
- For Employees who must quickly be future-oriented and control project outline.
This internal communication must also be coordinated with external releases (risk of obstruction offense) to customers.
Parallel to the audit required to determine the timing of the legal obligations, it is necessary to make a complete inventory of the expected consequences in each functional and organizational management. During this phase, the Senior Interim Executive needs to ensure the availability of some “key employees” even to strengthen some Services. Lack of planning or being “penny-pinching” are unstoppable means to ruin the project.
At the end of this phase, which must sometimes be very fast, the project with the detailed schedule has to be adopted during the Management Committee with no possible escape! This is sometimes the moment to determine who will remain or not on board, and to warn them all of the predictable side effects and of the necessary solidarity within the Steering Committee.
“Retro schedule should also include the possible time extensions ( special expertise for example) to allow safety margin for the unavoidable surprises ( it is rare that we do not discover some corpses in a structure which was acquired ).”
Some key steering elements:
- An M&A is terribly time consuming, the Project Manager must have a complete availability to devote to this project. Hiring a Senior Interim Executive, in addition to its expertise, will often relieve the numerous tails of previous projects or in-progress proceedings.
- The valuation of Employee Representative Bodies. They are key partners in this type of project, the law imposes on us a mass of detailed and accurate communications. The major risk is refusing to issue an opinion in the absence of information.
- It is best to offer them their proper place, as much as possible, and use them on some subjects ( social devices for example). The employees are generally reassured by the involvement of Employee Representative Bodies.
- The involvement of staff at all levels : Starting from the Merger expected consequences inventory, it is desirable to have in each Department or important Service, a voluntary contributor to monitor the project evolution.
- Managerial constraints : it is often a key element overlooked in Companies while Teams and Managers are strongly impacted by a Merger ( personnel, procedures, responsibilities , workload) .
- The Senior Interim Executive is regularly challenged by his Teams during this challenging period. If he feels abandoned in this phase, it will become the most passive spectator, at worst a declared opponent. The Senior Interim Executive equip and train all Management Committee members and regularly monitors the hierarchy information level.
- Management constraints : a merger generates a lot of duplicates: softwares, management tools, reporting tools, … and therefore an increase in workload in “just in time” or “lean” organizations. The choices are not spontaneously clear, they must be explained and the impact on operators must be understood from an ergonomic point of view. For example, the simple migration of a payroll software to another one is quite complex during the year (e.g. cumulative recovery ceilings) and sometimes the two organizations do not follow the same fiscal year. Neglecting management constraints often leads to an increase of development costs, harsh criticism, time overruns and delays in implementation. The worst part is that it allows the development of an “amateurism” perception that can discredit the Top Management and the Project.
Compliance with the provisional timetable
Provisional timetable was announced when operation started then was steadily declined in sub-phases, amended when necessary and communicated by different ways. The good performance of this calendar is a reassuring factor for the entire Staff. Compliance demonstrates mastery of the Top Management, the prospect of leaving the tunnel for overloaded teams or for those awaiting for the treatment of the doubled blooms.
The realization of the objectives
The merger had goals, which are broken down into specific objectives for employees. Each achievement must be communicated:
New organizational charts, new payslip for all or part of the employees, new agreement (incentive and profit-sharing scheme), agreements on classification grid, working time, pensions…
The objectives of HRM should not be separated from Financial or Business or Production goals to maintain the meaning of this milestone in the (usually two) Company life which is a Merger. They should not however be concealed ! Employees and their Hierarchy will devote their heart to the strategic objectives if they find that stewardship issues are properly addressed.
A well-conducted Merger results in the realization of a New Operating Unit (even if it was a limited acquisition scale).
The New Top Management is recognized as a credible and reliable Team.
The Merger, as difficult it was, should create a feeling that benefits (in a broad sense) surpass costs!
The social climate reflects the end of the challenging period. During this phase, the Senior Interim Executive was able to overhaul many elements too long in abeyance. He can contribute to the final stage, the recruitment of the permanent holder of the new position within the new organization.