It was announced by the H’able Finance Minister and rightly so that the Indian economy is the only progressive economy amongst the BRIC nation. Probably it is true that if we ignore some of the smallest economy, India is the fastest growing economy of the World. Though the Governor RBI has cautioned the nation about exercising due care as the fast acceleration brings its own challenges.
The growth for any nation is good and most welcomed social phenomena that guarantee the improvement in wealth creation and quality of life. India has changed rapidly and so is the aspiration and ambition of people. Indian entrepreneurs are taking a big jump and acquiring company outside India, bigger than the size that they are managing.
Growth in India supported by large M&A needs talent who can independently manage funding and transactions. Post acquisition challenges are many fold as the issues such as culture, uncertainty, ambiguity, new finding and blending of thoughts become so crucial that the management of these proceeds over other activities. New issues erupts, change in forecast of financial number, new findings, new set of rules needs very proactive and aggressive management. Accounting and issues such as profit protection and computation of goodwill takes central attention.
To manage a transactions and integration requires special skills and care. It not only needs a subject matter expert, but a person having managerial skills of highest order. One needs to display confidence and vigor and should be able to bring cheers in the new team, who would be reeling under confusion and uncertainty relating to their future. Under the new investor, since they do not have relationship, they become uncomfortable about what to ask and what not to ask? That inhibition ads fuel. So it becomes incumbent upon the new set of management to ensure that the right message is being communicated at the right time.
The people who can manage these events are important to be in the systems to travel through confusion and uncertainly while keeping the supreme business interest at its epitome. The business sence of acquisition can not be compromised. Financial performance as has been agreed is key to the future success as there are many covenants that may have been agreed with banks and the breach of the same could be very expensive.
It becomes an important HR functions to retain, recruit and train the people. Recruitments of talents takes its own time and their blending with new culture and new systems requires time to deliver. Post M&A does not give so much time, and hence retention of people becomes most crucial. The most important thing to retain talent is to give them clear direction, purpose, respect and recognition. Leaders needs to deliver their best and respect and recognitions helps increasing their passion in whatever they are doing. Financial emoluments supports their passion and it has to be there to keep them engaged in whatever they are doing.
I have seen many instances that post acquisition, the people engaged in acquisition lose their interest for want of respect and recognition. That is fatal for post acquisition management and corporates should be trading this very carefully. The ambition to grow is a powerful tool, and the need to maintain the momentum is equally important.