Building HR capability to deliver integration outcomes
Client Persona & Context
The client is an acquirer which has discovered that the HR capability is not at the level required to complete the acquisition and put it on its new path. The client has found that the level of HR capability falls short of what it expected to find based on its due diligence.
The new CEO and COO explain that the HR team’s skills and activities seem to be focused primarily on transactional work (much of it rectification of errors from an underperforming HR outsourced service provider). They want to know what can be done with the existing team, and what changes / augmentation may be needed to allow the function to plan and deliver the people related aspects of the post acquisition integration. 3XO’s engagement team are asked to prepare an assessment of the current status of the HR function mapped against the requirements identified by the client in discussion and in its business plan for the acquired organisation.
Analysis & Design
The 3XO engagement team meet with the current HR team. They review the current service level agreements with the outsourced service provider and other partners. More can be done within the existing agreement (i.e. at no extra cost) from the existing outsourced service provider and that a good argument can be made to invoke penalty charges. The team recommend bringing in a commercial specialist to oversee negotiations (a 3XO associate) and also carry out a discovery exercise on the introduction of a cloud based Enterprise Resource Planning system (ERP) to remove the need for an outsourced service provider. The HR team is found to have reasonable capability including an HR manager with potential to lead the function once the integration phase is complete. To deal with immediate skill gaps they recommend augmenting the team and also develop the capability of appropriate members of the existing HR team.
The 3XO principals and associates remain in place for four months tapering down to a regular weekly meeting as the capability is built among the existing HR team (including supporting the hiring of additional staff and supporting the exits of others).
The 3XO engagement ends after a review of the new team’s effectiveness which concludes that the client has an HR team appropriate for the next stage of the business plan and with trade union and other restructuring discussions successfully underway.