How vital respect, dignity and building trust are in any change process, especially in mergers, acquisitions and restructuring where people’s jobs are at stake. Small gestures matter. Honouring the glory of an acquired organisation’s past. I had the pleasure to welcome Rekha Nair in the 11th episode of the podcast ‘Creating a level playing field for collaboration’. She is an experienced HR consultant based in India. Rekha underscores the value of collaboration and working towards a common good. She experienced that transparent communication and a focus on collective success can lead to better outcomes for both individuals and organizations.
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Rekha Nair
Align HR, on LinkedIn
Introduction to Rekha Nair and her work
In this episode, we welcome Rekha Nair. Welcome Rekha. I would very much like it if you introduce yourself so you can share whatever you like about your life and your work.Thank you, Tonnie. So, I live in Chennai in India, and I run an HR consulting firm called Align HR. My firm does consulting in all areas of human resources and we do a lot of work in the space of leadership development and change management. In my past roles, before I set up my consulting practice two years back, I have led HR for organizations, for global organizations and been head of HR for India for APAC and for the global setup as well, being the head of HR for the organisation across the globe. So that’s a little bit about myself.
Mergers and Acquisitions: Building Trust and Respect
Okay, thank you. And this podcast series is about creating a level playing field for collaboration. Before this conversation, you told me that you have experience with OD and change management. And I think hierarchy and creating a level playing field are important notions there. So, I would very much like to hear some of your experiences, some stories of what worked or what didn’t work.
So, Tonnie, I will share about two kinds of interventions and try and relate them to the topic. One of them is about mergers and acquisitions. And the other is my experience with restructuring within an organization. To start with mergers and acquisitions, have been part of several mergers and acquisitions in my 31 years working in organizations. And both as an organization acquiring another company and as a company being acquired. So I’ve had experience from both sides and I thought that might be relevant to this topic. So what I saw and what I experienced and which I use right now in my consulting is that it’s very, very important to ensure that there is respect when an organization is acquiring, overtly showing respect and trusting relationships actually come out of that respect that is shown by the acquiring organization. And this can happen in multiple ways. It could happen by senior leaders visiting, interacting with the new acquired organization or to be acquired organization. For example, I remember in one of the companies where my company got acquired. So the CEO, the country president had come to our company and was addressing everybody in the organization through a town hall. You know, a very small gesture, like he stepped off from the dais, he stepped down with the mic and he gave the mic to a lady who wanted to ask a question. And that happened and we moved on. But that was something that people quoted as an example of showing respect and how they felt very nice that the country president had done something like that. And that became the talk of the town in addition to all the other things, all the strategic things and all the market and customer related information that was shared during that discussion. This small gesture was what was remembered by the people who and that foundation for a later relationship, very strong relationship that happened with the acquired organization.
And so sometimes it is these small things that we do where we intrinsically show respect and inclusiveness and trust that things develop and work very well through the course of the later acquisition, integration and harmonization of the new organization.
Transparent and continuous communication to reduce anxiety
Another thing that I have seen working very well is communication, continuous communication because a lot of insecurity, lot of uncertainty gets addressed when there is continuous communication. The communication need not always be something that is desirable. Sometimes it can even be difficult things to be communicated. But then the fact that there has been communication itself to a large extent, brings down the anxiety of the people who are now moving into a new organization. The fact that there is an opportunity for their questions to be answered. The fact that there is opportunity to understand the logic behind some of the actions. Also to understand the philosophy of the new organization. And many a time, you know, when there is an acquisition, the policies, the processes, the designations, the roles, responsibilities, the salary structures, the benefits, all of those, there is a change that people go through as a process of integration or harmonization. And it need not always land in a better place. Some things might be better, some things they might be a some benefits might get taken away as well. However, my experience has been that when there is transparent communication and when there is upfront information about, you know, what does it mean and how does it translate into a benefit or where is the gap, that itself helps the acquired organelle, the people who are going through the transition to handle it as well as possible. Again, respect, trust, and understanding of what the process is happens. So that is in one way like creating a level playing field and collaboration happens as a result of that.
Explaining the process by making a simulation for employees
In one of the organizations, there was a situation where the bonus plan seemed very interesting in the acquired organization and the company that was acquiring them, the percentage of bonus was much lower than what was being offered to the people by the previous company. instead of the one way of communicating is to say that you had a 20 % bonus, now it becomes 10%. Another way of communicating is actually by making a simulation and explaining what are the parameters which go into translating that bonus percentage into actual money. And we realized that while the bonus percentage was coming to be lower, the threshold, the way the bonus plan was constructed. In fact, many of these people in the organization actually would end up getting a bonus. In the other plan, possibly many people would not get a bonus because the threshold was too high. While it was nice to see 20%, but then it would not get implemented into a bonus getting received at the end of the year. And also the fact that more people would get bonus in the new plan and that lower bonus percentage actually translated into more actual amount of money. So the fact that there was so much of thorough simulation and working out of the details brought this out. So initially, while there was a little bit of discontent that a bonus is going to go down, when there was real interest in going deeper into it and understanding and explaining why the difference is there,
We realize that actually it is not a gap. It’s not a disadvantage. On the other hand, it’s a benefit. So many a time when we actually truly want to get into the details to explain and to be transparent, sometimes the problem is not there at all. And even if the problem is there, if there is something which is undesirable, then it is understood and the philosophy and the background is understood, the context is understood, then it is easier to handle that and then you know, know, okay, on this, there is a disadvantage, whereas on something else, there is a benefit as well. So, so I think transparent communication and continuous communication is very, very important in an acquisition. And sometimes they say, over-communicating is also okay. People might get bored that, you why are you telling us so many times? Why you sending an email, holding town halls and putting up pamphlets, that’s fine. It’s okay if people complain that there is over communication because the danger of under communication can be really hurting the process of change. that’s my experience with communication.
Aligning employees to work for a common good
So in one of these organizations, had to, actually there was a big benefit that employees were getting and the cost of that was something that the new organization could not take immediately. there was, you there were multiple discussions explaining why it could not be managed and handled. And then based on the discussions, it was agreed that this benefit would not be trashed, but it would be postponed for later. So there was, you know, year one, these are the costs that we can bear. Year two, some more, we can do a little bit more of alignment. And year three, we will do that big cost, which was like a, a huge cost for the company. So it was not that we scrapped that benefit, but then the fact that it could not be afforded at the same goal, it had to be postponed and staggered for a later point of time.
So that logic was something that people could understand and the business also was able to handle and manage that. So I think, know, these kinds of conversations, these kinds of decisions really help both organizations because when the acquisition happens, acquiring organization is looking at employees who are aligned, who will align over time and a business that will perform. And for all of this, it is very, very important that people understand the final goal, people trust and work together to a common purpose. And when all these irritants are taken care of, then people can perform and people can contribute better to the cause of business. So these are things many a time I’ve seen and I’ve also experienced mergers and acquisitions where these were not taken care of while there was a great business strategy and it was a great organization which was doing the acquisition. But then many of the great people left the organization or they had to really shut down parts of the business because there was no traction happening from parts of the acquired organization. if these small things are taken care of, they do not become big things which can hamper the business itself. That’s something that I experienced.
Merging cultures by a free flow between the old and new organisation
Some of the other related things that good practices that I saw in acquisitions and mergers is if there is a free flow of people from the acquired and acquiring organization, where if there are opportunities and vacancies in one part of the organization, the other part, that is the new organization, gets an opportunity to come in and apply and be part of that organization. If there is that kind of a merger of people across the two organizations, then it becomes one faster because then the culture becomes similar. People are aspiring and looking at a larger set of roles to look at. And you’re infusing each of these two cultures into each other. And there’s a lot of benefit and faster acquisition and integration that happens. And much more respect when you see people from the acquiring organization come into the acquired organization. People feel that, very nice. So there are people from there coming to our organization and it happens so seamlessly that it becomes so much easier for the transition to happen.
Honour the glory of the acquired organisation
One other thing that I’ve seen work extremely well is that many a time when organizations are acquired, they are told that their history is past and that now they are part of the new organization. The glory of their brand or the glory of how their organization came about does not bear any importance in the new scheme of things. And that can really hurt people in that organization. While they are happy to be a part of the new organization and they feel good that they are embracing the new organization and their history. But then to negate their own past actually can also be a little hurtful. So I’ve seen in one of the acquisitions where the history of that organization was blended into the story of the acquiring organization. So when they had a company presentation, the new company’s history was also added on. And then when, you know, in a town hall or wherever, when that was present, not even town hall, when there was a new employees or customer presentation, when that was part of the story of the company, that resulted in a lot of pride and inclusion, and that worked extremely well too. Similarly, when leaders from the new organization come into the acquired organization and want to genuinely, authentically learn about the past or, how did your company become so good? Because the fact that the new company has been acquired means that they were attractive to the buyer. And if it was attractive, trying to understand, what got you to this glory and understanding the product, understanding the culture, all of that, you know, the authentic interest with which the leadership team tries and wants to understand the company that they are acquiring or have acquired again goes a long way. And I have seen the reverse happen too wherein it is like, we are not interested in what you did in the past. Now you are expected to do this. So I’ve seen how badly that works. And some of these small things, even if the intent is right, even if the intent is that together we will move to a future which is better, but some of these small gestures and some of these inclusive kind of interactions can really help the integration of the two organizations together. So that’s it about mergers and acquisitions. The first part of what I wanted to share. I can move to the next part, which is on restructure and redundancy. Shall I go on? Yeah, please, please do. What I take from your stories is in all the things you mentioned, it’s about seeing people and taking them seriously in whatever way. Thank you. Please go on. Sure.
Restructuring with dignity: The success story of a multinational bank
So the second part of my story is about an organization which wants to redesign itself and to restructure, either because the external environment requires it to do that, or internally the organization realizes that they are not effective or efficient enough, and they relook at their structure and they want to redesign themselves. While it sounds very attractive from a strategic point of view, from an efficiency and effectiveness point of view, the people element of a restructure can often be distressing because when there is restructure, often there also is the redundancy which comes about. And there could be people who lose their jobs and therefore there is always that fear that if we do a restructure, first of all, should we do a restructure? And if we do it, how do we do that so that the impact of the redundancies or the impact of some people not getting the right roles is ameliorated? So that is the question. And I have been through many of these processes as part of the organization and as a consultant. And therefore I want to share stories around that in terms of, again, how can you create a level playing field so that people understand and appreciate the process and work together to arrive at the right conclusion, the best conclusion. There’s no right or wrong, but best conclusion under the circumstances.
So, very early in my career, this is when restructures were not very common in one of the multinational banks that I was working in. There was a very beautiful way in which the restructure happened and that continues to me to be a benchmark for restructure. So I would like to share my experience there. So it was a large bank, a multinational bank, in India itself, it had a huge presence. It was actually one of the most liked banks in India. So every year there would be an award, know, best customer experience and best relationship bank would always go to this bank. However, somewhere down the line, the bank realized that there are too many people in the company doing the same kind of things. So how can we become more strategic? And therefore there was a large exercise where multiple initiatives were done to look at the processes, to make them more refined and more effective. And at the end of that, there was also a redesign of the organization structure, wherein it was meant to be more streamlined for the outcomes to be as efficient as possible. And like happens, it meant that some roles would be redundant. Now, it started out again, communication is a big part of any exercise like this. So it started out by communication to all parts of the organization, to all sections of the population within the organization and explaining the basic premise of this process. Explaining as to the fact that while this is a difficult thing to do, but it would be done in a manner where there would be continuous communication and it would be as inclusive as possible and
there would be explanation and discussions at every part of the process. So that is how it started with communication. And at that point of time, this was in late 1990s. So at least in India, something like this was quite unheard of. it did cause anxiety internally within the organization. However, the way that was handled and the forums that were presented to employees to go and speak. So there was a project office that was constituted. There were satellites to this project office who could be contacted for any question or any discussion. So that was the first step the organization did wherein if I was scared about something, there was somebody I could reach out to who would give me a hearing and try and explain and understand what it is that my query was and explain if possible or escalate it internally for resolution. So that was the first thing, the communication piece again.
The second thing that happened was the structure of this entire exercise was really beautiful. So let me share what it was. This restructure process started at the top and it got cascaded down level by level. So it started at the very senior level. So the heads of each business within the bank restructured at that level and then their next level and then their next level. So they would open up all the positions. So instead of saying that we are keeping these three people and these five people don’t have a job, instead, how it was done was that there would be an announcement to that level, the senior most level, one level below and two levels below. So, n minus 2 to each level. For every level, people two levels below up to that level was informed about all the roles. If there were 10 roles and it was coming down to five roles at the top, then there was an announcement to all these people letting them know that these are the five roles which are available. Whoever is interested can apply for that role. So which means people at that very level, n minus one and n minus two. Therefore, this became an opportunity for growth and development as well. So I could now apply to a job which is two levels higher than mine. And if I was seen to be, in, any way qualifying for that, I would be shortlisted and called for an interview. So that is how the whole process was devised. you could apply to your own job, a job, which is one level higher and a job which is two levels higher and a whole lot of jobs at those levels. And on the other hand, there was also an opportunity to apply to jobs which were at a level lower than yours. And again, two levels lower. So I could apply to a job, is one level lower or two levels. So totally there were five levels that I could apply to two levels higher, two levels lower, and my own level.
So this was a huge exercise across the bank and handled level by level by level. And there were huge project offices, which were set up to handle this and experts who had come in to support and guide through this process. And there were many promising young people who got roles which were much bigger than what they were performing. And there were also people who were okay with doing jobs which were at a level which was lower than what they were doing, but they retained their salary and perks were not touched. So that was maintained at what it was. So it was a very fair process, the way it was explained and the way people saw it getting executed. It was a very fair process. It was opportunity. There were quite a few opportunities available suddenly internally, which would not have happened in a normal course. And therefore, people who were very bright and who would have taken years to go from one level to the other suddenly got big roles and worked effectively in those roles as well. And the process that was adopted for going through the interviews as the behaviour event interview, which now is a very standard procedure. But at that point of time, it was one of the first times in India that that was getting used. So people were internally in the bank, there were people getting trained. And there was a certification which was given to certain people within the organization who would be using the behaviour event interview to interview these candidates. So there would be a shortlisting process.
And then there would be interviews and then there would be an announcement saying, for this level one, these are the people who have made it. And all those people who did not code again apply for levels below. it went through a long process. think it took almost a year for the entire restructure to happen. And at the end of it, there were people who had to be eased out of the system, but then it was done in a manner which was very dignified. So lot of dignity in the way it was conducted, a lot of transparency, lots of fairness. And there was a lot of opportunity for people who were ready to take on that challenge. And it translated into, there was no very less of gossip or discontentment which was not getting heard because it was all there. Like people knew what was happening and people could act based on what they were seeing the process was. And at the end of this, first was that people who did not make it to a particular role, there was a feedback process where, because it was a behaviour event interview, there were instances that we could quote and say that this went well and this could have been done better. So there was a one-on-one feedback, which was happening to anybody who wanted feedback out of the interview process.
And those people who finally had to be transitioned out of the organization went through a very supportive process where there was outplacement offered. this was one of the premium banks and there were so many other companies in the country which had been eyeing people in this bank for forever. So when this happened, there were people who were available for outplacement. There were many other companies who happily took these people because they knew these are not people who are not good. They’ve been good in an organization. The organization is a very effective organization. so placing them out of the organization was also not bad. In fact, many of the people who left the organization went into roles much bigger than what they were performing in this bank. It was a lovely process overall while there certainly was angst at various points of time because there is insecurity, because there is uncertainty in any process like this, any transition, any change does cause some kind of anxiety. But then the manner in which it was handled, it landed in a very good place for the organization and for the people who went through the process as well. People who got roles within the organization and were happy about it, and people who did not and had to move out into other positions, which also were very exciting and good. So that was something that I experienced and I thought it was handled extremely well. Beautiful example.
What was your role in this project? My role? I was part of the project office this was very early in my career. But we had a project office and I was part of the project office and managing this till my own level happened. So I couldn’t do my own level. I, somebody else had to do for me when it came to my level, but I was part of that office. So I was part of the restructuring team. Many of us in HR had that opportunity. It took me some time to actually understand how the process would be because there certainly was some kind of fear in terms of what will happen to the bank when we go through this. The minute we announced this, everybody will start looking out for other opportunities because they don’t know how this will land and won’t feel lose the good people in the organization. So that was the first fear that came to my mind when I heard that a process like this that are restructures going to happen. However, as I went through the process and I understood it more, I felt very confident that this, if we communicate right and we involve and engage with people continuously, then people look upon it as an opportunity to get into something bigger and better. Also, not only in terms of going into a new level, but also looking at positions which are not necessarily in their own function, but lateral movement as well, opportunity for lateral movement. So overall, it sounded very exciting when I heard about it. When we actually started implementing it, there was a lot of work and very meticulous work because between us, between the project office, it was very important to be on top of everything there were so many positions to be announced, job descriptions to be ready, interviews to be done, ensuring that the right panel is available for those interviews. It was a project which had to be run like a clockwork and it was very exhausting on certain days because there would be interviews from morning till evening, one interview after the other, one panel to the other. But at the end of the day, it was very satisfying because I believed and most of us who were running with the process were completely committed to it.
Anchoring the change
So we saw that while there was the need to act and there was that insecurity. So these are situations, both in the previous situation and in this situation, these are situations where people are not at their best when you interact and deal with them and manage these situations. But then that is the opportunity that people like us who are anchoring the change, are part of managing the change, can bring about a lot of transformation. And if handled well, can be very satisfying because you’ve made, in a situation which was not great to start with, we are able to do something and get people into a place for the organization and for people, which is beautiful. So it’s very satisfying if it happens correctly. It’s a lot of hard work, of things to be managed, but it’s high impact. and we know that the risk is high, but if it happens well, it can be really beneficial to people and to the organization as well.
How many employees, how many people were involved in the restructure? The bank had around 10,000 people. So at all the managerial levels, it went level by level by level. And at the clerical level, it was handled a little differently because at that level, it’s not necessarily the role that you can apply for. And there’s a large set of people there as well. And they are unionized. So the best thing that could be done there was to do a voluntary retirement scheme. So for the clerical staff, there was a voluntary retirement scheme, but for the supervisory and the managerial cadres, this process was engaged, was done. Now I understand why took a year. Yes. So it was like, one change at the top that would stabilize by that time the next stage.
Rather than putting the whole organization into turmoil, it went one by one by one so that, you know, there would be a little bit of turmoil that would settle down, then another turmoil settled down, and eventually at the end of the year, everything is stable, you know. What I take from the story is the last one, creating opportunities, creating opportunities for movement, but also anchoring the process.
Reflecting on collaboration: The gains of working on a common good
So it’s not totally free flow. You have to anchor the process. And what you said, you have to do it very, very like a clock, very meticulously. Many new insights, thank you. Looking back on this conversation, is there something you would like to share reflecting on what you told? Or a message you would like to share?
Yeah, so I haven’t prepared for it, but as I’ve spoken about it and as I believe in everything that we all do in life, I think I will come out with something based on that. the theme of this session, the part that really excites me is the collaboration part. The fact that collaboration is key for anything at all, whether it is social, whether it is an organization setting, in any setting, if collaboration is something that we are wanting to achieve, then the opportunity to succeed together is much higher. The gains together, the net gains for everybody together is much higher when there is collaboration. And in any dynamics, any social dynamic, if we work together, then we are able to reach something together, which is better than what each of us individually would have liked to achieve. That is the aim.
Having said that, there are situations where not everybody might gain. So there might be people who don’t get the best out of the situation. But the fact that we’re working together for a common good sometimes becomes a big enough goal. So individually, I might not have gained in a particular situation. However, the fact that together we’ve done something great is something worth celebrating. And in every interaction or in every initiative, there will be somebody who might gain, somebody who might not gain as much. But together, over a course of time, I guess when we collaborate, when we work together, when we have the common good in place, and we are transparent and willing to dialogue and converse, we are in a better place together. So that is my belief.
Thank you very much. Thank you, Rekha.