The HR team at Schwan’s Company is instrumental in the pre-integration stages of the acquisition process, says Gayle Hayhurst, vice president of human resources at the Marshall, Minnesota-based frozen food company.
Hayhurst and her HR team perform a variety of assessments that help open a window into a company that Schwan’s is interested in acquiring.
“We want to look at organizational structures, and of course understand the headcount and the comp and benefits structure. We’re initially trying to understand all of that in a broad sense,” says Hayhurst, adding that the HR team also focuses on turnover rates in management and frontline roles at a target company.
Taking such steps can provide a sense of the potential volatility within an organization, says Hayhurst. “But, we’re also looking closely at their philosophical approach. We like to spend a little time understanding their culture stakes in the ground.”
Hayhurst and other leaders from Schwan’s spend significant time with leaders from an acquisition target company, asking a series of questions designed to determine the organization’s vision, its stability, and its cultural climate.
“We want to understand the talent that’s running this organization. Then, if we want to go down this road, we need to research a list of the organization’s key leaders, executive committee members and so on. We want to understand the depth of their talent and their leadership capabilities. Part of that is knowing how long key leaders have been with the organization, for instance.”
Schwans’ leadership also wants to know what an acquisition target’s employees think about their experience there. Hayhurst and the HR team conduct research on employer review sites as well as searching for any other information within the public domain, such as litigation or other legal concerns that could disrupt the target’s business and—in turn—Schwan’s business.
“We try to take a patient approach to evaluating a company for acquisition,” says Hayhurst. “From a cultural perspective, we try to do our due diligence up front. And, when we get close to completing the acquisition, it’s important to have boots on the ground. Our leaders meet managers, walk the floor, and see their facilities, to get an even better sense of what the organization is. But before that, our expectation is that our senior leadership, all the way up to the CEO, shares our cultural philosophy with employees as part of welcoming them to the company.”
This case study is an excerpt from i4cp’s Avoid Acquisition Acrimony: How to Analyze Culture Synergy Early report.