We have been discussing in past months how succession planning is critical to the longevity of our business. Likewise in a rent roll acquisition, if we are to retain the key staff, we are insuring that the person the landlords have built a relationship with over time will be there for the transition from one agency to the next.
In the Vendors office, staff, if they are aware of the sale, will be the ones who are concerned about their future during the acquisition. However, it is possible that the purchaser could lose staff as well. In the highly charged environment of an acquisition, where the staff is concerned with change and a move to the unknown, there is bound to be insecurity. This can result in staff leaving or looking to move on.
We are only too aware that we need to retain the people who understand the business, have the connections to the customers and suppliers, and know how to manage the day-to-day operations. We set out to identify these people early in the discussions and ensure that the acquisition and due diligence process locks them down so they are not lost to the business. We can expect these people to be concerned about their future, and so the Vendor and Purchaser of the business need to go out of their way to assure them of their continued importance and place within the business.
In larger organisations, there are often unrecognised stresses placed on staff. Senior executives are taken out of the day-to-day operations to assist with the evaluation, negotiation and due diligence process. Once the deal is done, more time and effort is needed to bed in the new operation and complete whatever intervention and integration activities are required to gain the acquisition objectives. While this is happening, other staffers have to take up the day-to-day tasks the executives are not able to. So in addition to doing their own tasks, some people are required to put in extra time to ensure everything continues to operate smoothly. That is of course assuming this problem of delegation has been addressed and those assigned the additional tasks are prepared to take them on rather than leaving to go somewhere else where life is a little easier.
This is not the only place where stress will occur in the purchase. Acquisitions often create organisational changes. Where operations are being integrated, the vendor staff needs to be accommodated. Few purchasers can afford the wholesale loss of staff with a 'we are the new owners and we get all the good jobs' approach. Or where some of the acquired staff will step into senior positions resulting in current staff missing out on promotion. There will be new bosses, new positions, new job descriptions, and so on. Life will be unsettled for some period of time and not everyone is going to be happy with the result. In fact, some will leave rather than face the risk of losing out, while others will prefer to go to another company where their future is more stable and certain.
What this means for the purchaser is that effort needs to be put into retaining their key staff and undertaking succession planning within their own business. A focus only on the acquired business will risk undermining the acquisition objectives if this results in serious disruption in their own business. Part of the acquisition process needs to ensure that the current business is secure.