“People are our most important asset.” It’s the kind of verbiage that appears on mission statements and value propositions in corporations and institutions around the world. And here’s why: because it’s true. Because people deliver products, services, and experiences. People turn strategy into results. And when people work in a culture that empowers and inspires them, they do great things.

For many executives, mergers and acquisitions are driven by the numbers, the cold, hard realities of revenues, profits, and balance sheets. But the best and most successful M&A deals are driven by something else: an appreciation of the importance of people and an awareness of the immense uncertainty people experience in the midst of a merger or acquisition.

As a technology leader, Wipro works with many companies to ensure a smooth melding of IT and business process landscapes through our post-merger integration practice. But Wipro has also built a team focused on talent and change management because of this reality: The typical cause of failure for an acquisition is neglecting people and culture. We help companies ensure that human resources remain at the forefront of M&A activities in recognition of the importance of people in successful deals.

A recent experience for Wipro’s Talent and Change Management team illustrates the point. In late 2020, the German company METRO AG wanted to strengthen its focus on its core wholesale business and decided to spin-out two subsidiaries focused on digital and IT, METRO-NOM GMBH in Germany and METRO Systems SRL in Romania. In a deal valued at about $700 million, Wipro acquired the subsidiaries and transitioned more than 1,000 employees to Wipro.

Of course, the deal made financial sense to both parties, METRO and Wipro. But it would only be successful if Wipro was able to successfully manage the employee transition from METRO and integration into Wipro. And at the height of the global COVID-19 pandemic, this was even more crucial than ever. It’s a credit to METRO this was an important consideration in their decision. Both companies shared a vision of what a transition should do:

• Create and enable a positive employee journey
  
• Enable operational and cultural integration
• Ensure business continuity before, during, and after the transition

By their very nature, acquisitions create huge uncertainty, fear, and anxiety about the future and risk loss of talent, resistance to change, and damaged morale. Wipro’s challenge was to manage and mitigate people issues with the same focus and discipline as functions like Legal, IT, and Finance.

Align, Engage, Enable

The Talent and Change team at Wipro know how to approach and manage these kinds of large-scale enterprise organisational change challenges, by focusing on three big themes:

• Align: Define roles and establish governance models, work with program sponsors to define a compelling vision, and prepare business leaders to own and support the vision so they set the tone from the top.
  
• Engage: Use a persona-based approach to assess groups and create transition journeys targeted to specific persona needs, underpinned by specific support and events to prepare all teams for the change ahead.
  
• Enable: Cultivate and reinforce behaviours that support new ways of working, and build a network of change influencers to inspire, reinforce and provide crucial actionable insight.
  

Here’s how this worked out with METRO AG. It was critical that pre-Day 1 and post-merger integration activities would be supported with robust change management interventions. Wipro’s organisational change management team is human centred in its approach, so the project team could focus on the acquisition’s design and development. Wipro’s involvement started several months before the acquisition “went live.”

The designed approach was aligned with key business change objectives: rapid adoption and ensuring the transitioning employees would be emotionally committed to the strategy behind the change. This was achieved by developing a strong leadership structure, consisting of transitioned leaders as well as those already within Wipro. We also made open and honest communications a primary concern, aligning priorities, and promoting teamwork. This ensured the acquired businesses functioned as smoothly as possible, minimizing disruption and accelerating time-to-results.

To mitigate any human capital risks, Wipro’s Talent & Change team conducted business readiness and change impact assessments both before the acquisition closed and during integration. These assessments served as the framework for the ultimate change strategy. The team also worked with the leadership of the three entities to ensure the acquisition’s strong value was clearly and repeatedly communicated to employees.

Specific interventions were employed to increase cultural alignment and build connections between Wipro, METRO-NOM, and METRO Systems employees, such as virtual coffee get-togethers and expert talks. Employees from both parties were able to share their individual transition experiences and share knowledge of best practices. Townhalls, monthly newsletters and a dedicated Q&A microsite provided an ongoing drumbeat of communication activities to deliver timely, relevant and consistent information.

In addition, a network of ‘Change Influencers’ further supported these change activities. Led by employees of METRO-NOM and METRO Systems, and assisted by Wipro, this network acted as ambassadors, bridges, and translators to help the transition and integration proceed smoothly. Regular measurement for meaningful insights to drive execution excellence and transformational success provided direction to help ensure these interventions drove the successful adoption of the change, for both sides of the acquisition.

Paving the Way to Future Success

Successful post-merger integration is the key to generating sustainable added value for companies. Every merger is unique and requires a customized solution. Effectively managing the people issues that resulted from this M&A integration took discipline and focus to ensure change would be lasting. Improving engagement, measured through employee engagement software, as well people working together as one company with a common vision and shared goals were key indicators of success.

The OCM team provided a valuable perspective on the people-related risks which may otherwise be overlooked. It was important to partner OCM with the acquisition team early in the due diligence process, whilst also forming a blended change team. This helped identify and mitigate cultural as well as structural, talent, and financial risks that could have arisen in the transaction. Importantly, the team were able to ensure that the transitioning employees could successfully navigate the new terrain and were supported in their continued cultural immersion.

By focusing on organizational change management before, during, and after the deal, Wipro ensured that human capital is now a key focus area moving forward. Wipro will look to provide the acquired employees with new opportunities to advance their careers, access innovation, work with leading digital technologies, and adopt new ways of working that enable agility, speed and scale in engineering.

In M&A situations, planning for the human consequences of change and disruption can make a tremendous difference at both the enterprise and individual employee levels. But experience and expertise in organizational change management can add value during any kind of restructuring or strategic shift because people really are “the most important asset.” 

Click here to learn more about Wipro’s organisational change management expertise and our Talent & Change team or email David Lyons on david.lyons@wipro.com.

Thomas  Howell
Senior Consultant - Talent & Change Team at Wipro.

Tom has 6+ years Change Management experience, delivering complex multi-stream, multi-capability end-to-end change consulting and advisory engagements.

David Lyons
Partner - Talent & Change Team at Wipro

David has 20+ years Change Management, Organisation Design and HR Advisory experience, leading multiple end-to-end consulting engagements for many household brands.