Supporting Employees Through a Merger & Acquisition

Introduction: Kari Fass is a Senior Educator Success Manager at Thinkful. Kari’s career has spanned higher education, recruiting in the tech industry, coaching, and people management. They have seen their share of company mergers and acquisitions and have learned better ways to guide employees through this often stressful process. 

Today I speak with Kari about what they learned after going through two mergers & acquisitions and how you can apply these lessons to your everyday life.

Jocelyn: Your career has spanned many disciplines and industries, can you walk us through your career path and how you ended up having experience in so many areas?

Kari: Absolutely. My career has definitely been a spiral and not a line. I think that's important to mention because when I started on this trajectory, I thought it was a very straight line and that is not how it turned out at all. 

I did start in higher ed, at universities; my career goal when I was getting my master's degree was that I was going to be a Director of a Gender Identity & Sexual Orientation Resource Center, so working with multicultural and, specifically queer students. My studies focused on the experience of marginalized students and the intersections of their identities. 

I stayed in traditional higher ed for about 10 years. It was on-call rotations, crisis response, training staff, advising student groups, and managing full-time and student employees. 

When my partner and I relocated, I took a role as a retention coach for a company that was a vendor to colleges and universities, specifically working with adult learners in online spaces. I already knew that I liked coaching, I had studied coaching, and I got my certificate as well. That company was a big change from traditional state school funding models, business models, and pace of work into a faster for-profit entity. 

At that time I realized that Portland, Oregon, was very much where we wanted to stay, so I figured out that I could pivot to the technology industry. My partner is a software engineer by trade and tech was booming in Portland. I could see a lot of overlap but I wasn’t quite sure where to land. I ended up doing a lot of networking and researching, especially through PDX Women In Tech.

At first, I was at a recruiting agency through a friend of mine but the agency model wasn't a great fit for me. So then I went and I found a corporate company and that was good. Then, they were acquired by a really huge company, and I was like, well, maybe that's not quite the right fit. So I swung back in the other direction doing employer relations for a very small tech education non profit. 

After that, I went back to recruiting at a startup in the education sector; that turned into manager excellence and people operations work, which then turned into operations work! Today, I manage a large team of part-time employees and contractors who provide direct services to adult learners.

So while it was a bit of jumping around, it ended up being that every step of the way made sense. I know it sounds life coachy, but I say follow your bliss, follow your heart, and do what makes you happy. I think it's really important to highlight that for job seekers, and for managers who are trying to help their employees be happy and be as successful as possible in their roles.

Jocelyn: Yeah. I love that because I feel like so many people go out into the world and think I'm going to find the perfect job right away. It's just going to be great. And so often in our careers we want to pivot, but people have this fear that, well, you're supposed to have this linear path. And I think more people need to look at that to make sure they're in the right spot.

Jocelyn: Let’s talk about Mergers & Acquisitions, you have gone through two big ones, once as a Recruiting Associate, and once as a People Operations Manager, can you talk about both and what your experience was?

Kari: Yeah, absolutely. I think it's important to acknowledge that everyone's experience with a merger and acquisition is so unique and it's so unique to them.

The first merger, I was still a contractor (on the HR team) at the beginning of that process. The level of secrecy that I was experiencing was nerve wracking. And afterwards you're like, “Oh, that's what was going on. That's why I was left out of those meetings.” But really they were going to a place so that they could sit down and work on all this top secret stuff together. I think about how that translates to employees on other teams who are even further removed from those types of changes.

It was also a really good learning moment for me, to learn how to navigate small systems that we owned to going to big systems that we didn't own. We were going from being very much an independent startup that had made their own decisions, chosen their own platforms, that sort of thing. And now you're trying to fit into the systems of a much larger organization and you don't have as much sway in the decisions as you did before.

In the second M&A I was a People Operations Manager; I was second to the person in charge of our HR operations. It was a smaller startup. I legitimately felt like I could call the CEO any day and that wouldn't be weird, that sort of sense of community and closeness. And all of a sudden my manager is rearranging my assignments. I was working on a compensation project and I was so excited about it. I was in the thick of it, and it was really powerful work. And all of a sudden he's like, “Never mind, you gotta go work on this other thing now.” 

Once I knew, then I had to be a protector of that information. Again, it’s that sense of shift where you just don't know what, but you know that there's a big change coming that you can't talk about freely and you can't offer this information. It's really challenging to hold that safe space for other people when you know you purposely have to hold something back. And they feel it.

Jocelyn: What type of reaction did you see from employees when these M&As happened? Anything that surprised you?

Kari: I've seen folks who were really communicative all of a sudden become very internal processors because they're not really sure where they can place their trust.

I think that also intersects with the reality that certain communities have been historically mistreated by employers and by employment systems. When folks from those backgrounds have chosen to stay at a company, they've grown to know that system and stayed for some set of reasons. Even if there are circumstances where they don't feel like it's the most inclusive company for them, they might have stayed because they know who they can talk to. They know who they can trust. When we start to change that, there's a natural desire for certainty.

When we think about the conversations that we've been having with employees of color, the conversations that we've been having with trans employees about their safety in the workplace, they have to rebuild that sense of safety over and  over again. And it may be that they'll end up incredibly happy at the new company, but there's a lot of legitimate reasons they are going in with an inherent mistrust and looking for evidence that they should stay and build trust again. 

Jocelyn: What is the best way to take care of people in these high stress situations? Any specific examples?

Kari: There is the relationship building that we're always talking to managers about, the value of building trust and making it safe for employees to have hard conversations. That’s proactive work that has to be done long before an acquisition.

Creating a space where they can say things about what they don't like and not feel shut down really matters; as things are changing rapidly, you need to be able to have that conversation with them. If you want to keep your great talent, you want to know what's on their mind and not just have them searching for their next job secretly, while you're still trying to figure out a comp policy and insurance and software platforms.

The second thing, especially common in startup culture, is there's a desire to promise people a big future: “We're building a startup and you'll have a great future here someday.” There's this line between saying “we're gonna make you a manager one day” and saying “I think you'd be a great manager; let’s help prepare you for that possibility.” We need to be very careful about how we build that roadmap for the future.

Then the third thing is that before an acquisition happens, the accountability for core performance is important. If someone is a mediocre performer, sometimes managers don't want them to leave because they don't want to go through the hiring process or they don't want to lose a bit of knowledge the employee has about the product. Once you are absorbed into a larger system, it becomes even harder to protect that employee and to take care of them. That's an ethical piece about how you're treating that person that you brought into your company to begin with. They're going to be crushed and they're going to leave your company saying that was a terrible acquisition if they didn’t understand that they were always a mid-level performer.

Jocelyn: Well, a big thing I took from what you’re saying and something I've always pushed is to be honest and provide as much information as you can when you can give it, right? We shouldn’t be trying to hide things just for the sake of hiding things. And I think that can be challenging for companies who haven't had a lot of transparency from the beginning. Sometimes executives feel like it’s just too much information for the employees. I’ve heard executives say, “they don't really want all that information.” And I just don't agree with that. If it's information you can give, people are interested in knowing what's going on. 

And of course there has to be some closed door conversations as decisions are being made, but as soon as you can communicate things, employees want to hear it and they usually need to hear it a couple times to let it sink in and remember it.

Kari: Yes.

Jocelyn: How would you apply lessons you learned from dealing with M&As to your everyday work life? Can you talk more in depth about that?

Kari: Absolutely. So I think asking your employees how they're feeling and what they want, even if you think you probably can't offer it. We need to not shy away from the difficult conversations just because we don’t have the answers they want to hear.

We should be asking employees:

• What are you looking forward to? 

• What are you excited about? 

• What are you motivated by?

I like getting at the question behind the question. What problem are they actually trying to fix? I’ll ask, “Can you tell me a little bit more about the context behind your question?” I think about how else can I help them understand that they are valued? And how else can we make sure that their career continues to advance?

Jocelyn: Yeah. I think when you talk about motivation, if you are managing a team, it’s really interesting to ask everyone what their top values are, because it is so different for each person. It's interesting to think about why they're doing what they're doing and that informs what questions you ask them.

Kari: Yes, absolutely.

Jocelyn: What advice would you give someone dealing with an M&A right now? Especially during Covid there are so many added layers.

Kari: Anything that you can offer about what you know about how the identity of the product or the company is going to shift. Talking with employees about what that actually means. At some point, our product will no longer be known as the same product. We are going to become a part of this company, or we were predominantly purchased because our platform is really what was valued. Sometimes the acquiring company isn't even totally sure what they're going to do with you.

It’s really important sharing that with employees so that they're not surprised. Some employees will be very excited to take on the new identity and some will leave because they think they're going to lose the old identity entirely.

I'm thinking of a particular story where I watched an employee post announcement, when I was in a physical office. This person was reacting to their previous experience with an acquisition. Everybody around them is grabbing a beer or soda and cheersing and they are crying because their last acquisition was no good for them or their family. And there was literally not a space in the office where that person could be that was safe for them to process those emotions.

Jocelyn: Yeah. That space of psychological safety is so important and it’s interesting to see the theme of transparency in so many conversations that I have with people about the way they are doing HR or DE&I work.

Kari:. What are we looking at here with your blog and your website is there are certain things that are just so true in every situation. What psychological safety looks like for your support team is going to be different than what psychological safety looks like to your advanced engineering team. Right? What they need is probably different based on the nature of the work they're doing, but it's still psychological safety and it's still satisfaction at work.

Everybody is experiencing change from their own perspective. The enthusiasm of some individuals can make the skepticism of others feel unwelcome. Obviously, people are excited but leaders can help balance that space by just saying, “I understand some of you are going to be more scared than excited today. I'm a leader in the organization and I'm really excited. I really believe in what we're doing here and I know that this is scary.” Leaders can  make space for that and normalize it.

Jocelyn: Thank you so much for your time and this perspective. In addition to all this great information, I am including a few links for resources for anyone going through a Merger & Acquisition right now.

Acquisition Due Diligence Checklist

HR Pre & Post Merger Checklists