Applying the Integration Framework

The framework shown in Figure 8-2 is a guide for structuring thinking about the integration of acquired firms and business units. It identifies a wide range of human capital issues to consider. The framework raises issues that should be addressed as part of the due diligence work of scouting the acquisition. Typically during this period the acquiring firm does not have access to all the data about the target company that it needs to resolve uncertainties about what barriers to integration exist and how strong they are. However, the issues should be considered as explicitly as possible to prevent wishful thinking. The framework is especially applicable as soon as the deal is completed. That is when the integration team—perhaps consisting of representatives from both companies—can truly go after the facts needed to make informed decisions about the extent and speed of integration. Human capital barriers to integration should be identifiable through a comparative Internal Labor Market analysis (see Chapter 5) of the acquired company and the acquiring company. Business Impact Modeling also can be used to identify similarities and differences in the ways human capital drives value.