Shari Yocum is a Managing Partner and co-founder of Tasman Consulting LLC, a women-owned boutique consulting firm based in San Francisco that specializes in HR consulting for mergers and acquisitions, divestitures, and restructuring, particularly the human capital integration challenges that arise from these transformations. She recently spoke with KCRA's Liz DeVito about what it takes for HR to be a key player in a successful transaction and how Tasman Consulting's unique value proposition can help.
ALM Intelligence: Human capital risk has emerged as a consistently critical area for deal success. Why?
Yocum: I think it's a combination of first-hand experience and a growing body of research that has put a long overdue spotlight on the human element in mergers and acquisitions. The people who put together mergers and acquisitions—CEOs, CFOs, investment bankers, and strategy consultants—tend to be left-brain, logical, analytical thinkers, who put more weight on the financial and strategic benefits of a deal than on the human factor. Experience has taught them, however, that it's the intangibles of culture, talent, and leadership that can make or break a deal over the long-term. There is a growing body of empirical research that further proves this, providing an evidence base that not only informs the business case for a proposed deal, but also ties human capital risk to the deal valuation.
ALM Intelligence: How does this impact HR's traditional role in corporate transactions?
Yocum: HR is being brought into the deal lifecycle at a much earlier stage, sometimes as early as the acquisition target screening process, and in a role with expanded responsibility. Take due diligence, for example. HR has always been responsible for the HR-related aspects of financial and legal due diligence, such as the costs of compliance with international labor laws, executive compensation, and benefit plan integration. More recently, HR is tasked with organizational due diligence, responsible for assessing cultural fit and the change management costs that might be required to harmonize cultures.
ALM Intelligence: How can HR talk about culture to executives who perceive it as a soft factor in deal strategy?
Yocum: When the conversation turns to culture, make it all about the business. It's the only way that non-HR people will listen to you. They want to understand how culture is going to make the new company more efficient and productive or how it might impact their go-to-market strategies. A strong capability for integrating culture enhances brand equity, too. You want buyers and targets alike to know you're a company that not only knows how to execute a deal, but can also integrate cultures to drive deal value. It goes a long way in the deals market to have the kind of brand that makes companies want to talk to you.
ALM Intelligence: Tasman is a young firm that's achieved an impressive growth in just five years. What's made it so successful?
Yocum: If I had to sum it up, I think it's because we've walked in our clients' shoes. We know what it takes and what's at stake when it comes to the human factor in transactions and restructuring. Each member of our team has 10-plus years of experience in corporate M&A. Our co-founders, including myself, held executive-level positions at Cisco Systems, where we worked on more than 160 transactions spanning 50 countries, totalling between $1 million and $7 billion. We bring clients a unique perspective of practical and useable advice in the context of this senior advisory model, but we have no issues rolling up our sleeves to get the work done.
ALM Intelligence: What's on the horizon for human capital consulting in corporate transactions?
Yocum: There are some interesting things going on with social network analysis, in particular as it helps clients understand acquired companies' informal networks and target key influencers who can support integration efforts. We're also doing interesting work in China, where the government wants to merge SOEs to make them more capable for international competition. The HR factors at play are significant, as merging SOEs are challenged by their existing compensation systems, lifetime employment approach, and governance structure.
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