How to Cope if Your Firm is Taken Over

Look on a change of employer not as a threat but an opportunity

By Carly Chynoweth

Sunday Times, 4th October 2009

Takeovers dried up after the credit crunch but last month’s £10 billion offer by Kraft Foods for Cadbury has signalled new activity in mergers and acquisitions (M&A).

It’s not just investment bankers and lawyers who need to pay attention, according to Scott Moeller, director of the Mergers & Acquisitions Research Centre at Cass Business School in London. Every corporate employee should be on the alert.

“People are dusting off deals that have been on the shelves while market conditions were not right,” said Moeller, 55.
“Now they are being reinitiated, with obvious implications.”
Companies can cut staff by up to 30% when they merge and on average 10%-15% leave during or soon after a deal.

The first step towards minimising the risk of redundancy is to be prepared, said Moeller: keep your CV and professional network up to date, read press reports about your business and keep an ear open for rumours when a merger or acquisition is announced, realise that it’s up to you to act. “Too often people think that someone else will take care of them,” said Moeller, author of Surviving M&A and a former investment banker at Morgan Stanley and Deutshe bank.

“Don’t rely on your boss to take care of you and don’t get fatalistic – you can change things.” While the acquisition is inevitable once the deal is done, people have more control than they realise about the path that their own career will take. “You have to play the game,” said Pip Peel, chairman of PIPC, the manager consultancy, which has managed a number of big post-M&A integrations, including NatWest and Royal Bank of Scotland. Avoid using “them and us” language and make sure you are seen to support the new organisation. “The people who survive and flourish are the people who embrace it.” Peel said.

Don’t waste time thinking about how much you preferred the old situation, think of it as an opportunity to carve out a new role. “You can go up quite far and quite fast during an M&A,” Peel said.

“The organisation has got bigger and there are more responsibilities out there. You need to find a way to become invaluable.”
Be aware, thought, that where you can contribute most might not be directly related to your present role. Jan Hills, a partner at Orion, the business advisers, said:

“I was head of HR at an organisation that was purchase by another business with its own head of HR.” She was considering leaving but stayed colleagues helped her to create an entirely new position. “You need to think laterally about how you can be useful to the organisation,” she said. Working out how you can be useful means doing your homework, said Richard Fuller, the human resources director at Thread needle, an investment services business. “You need to understand very clearly what the business case is for the acquisition because then you can make sure that all the decisions you take are appropriate,” he said.

“Listen to any formal communication but also do your own research into the acquiring company. Find out as much as you can about what’s coming over the hill. Follow up by writing a list of everything you are good at and the you know the company needs.” Then it’s time to put your head above the parapet. “The biggest mistake that people make is to go and hide.” Hills said.

“They are like little animals rolling themselves into balls, thinking that if they keep their heads down nobody will notice them.” It’s much more effective to go the other way volunteer to get involved and make sure that people do notice you, Fuller said. Yes, there is always the possibility that you will end up on a project that gets rid of your job but if the case it would have gone anyway. At least this way you have shown that you are willing to move into another job. However, this does not mean taking anything you are offered in a spirit of gratitude, said Anna (not her real name), a senior executive at a top bank that is undergoing post-merger integration. “I went through a similar change once before, “she said.

“I played it safe and ended up with a job that was similar to the one I had before.” Although she was relieved to get the security, she was quickly disappointed that she had not held out for something more interesting. Extensive press coverage before the deal was finalised meant she had plenty of time to analyse where she was in her career. “If you understand your own long-term plan you will be better placed to assess the options and decide whether you are better off with them or looking externally,” she said.

This knowledge helped her decide to count herself out of one position without having a new role lined up. She knew that is she wanted to move her career on, it would be better to have a look outside than to take second-best internally. “The uncertainty was uncomfortable but I held my nerve. Now I have a position that is much more high-profile.” Having clear career goals and a flexible approach to reaching them also made it easier to sell herself to her new managers. “I made sure that when I was asked what I wanted to do next I could articulate it,” Anna said.

“In a merger you are surrounded by people who don’t know you so you really do have to state the obvious.” Finally, remember that moving on can be positive. Moeller said: “Not only are they giving you a redundancy package, it’s also easy to explain to potential employers you left because the company was acquired.”