M&A Value Creation: Bench Strength Assessment Critical

Dave HenshallAssessments, Mergers & Aquisitions

M&A Value Creation: Bench Strength Assessment Critical – with the right talent assessment and selection process. CPO’s can ensure the right people with the right skills fill carefully defined roles in the expanded organization.

Building a world class team bench:

1. M&A Value Creation: Bench Strength Assessment Critical


M&A due diligence in procurement talent is a dangerous corner to cut

M&A Value Creation: Bench Strength Assessment Critical. CPO’s require practical methodologies to select the right people and build a strong bench to deliver value from the merger and beyond.

Selecting the new procurement team is one of the most critical decisions CPO’s will face when combining the two organizations. It is a decision with lasting and often underestimated implications. The team selected defines the new procurement organization’s capabilities. Stakeholders, employees, and board members will observe because your decision sets the tone for the integration, as well as procurement’s position in the new organization.

As the CPO of the new organization, your ultimate goal is to select the team who will create and drive value. Whether the bench comprises players from the legacy company, the acquired organization, or recruited externally, the new team must demonstrate leadership competencies and behaviors aligned with the business strategy, operating model, and desired culture of the new organization.

2. A Question of Merit

A key M&A objective is to acquire valuable procurement talent to strengthen the team bench

When positions don’t get filled on the candidate’s merit, the consequences of perpetuating such arbitrary staffing decisions can be the ‘wrong people filling the wrong jobs’ for years to come following a deal.

CPO’s must take care that their staffing decisions demonstrate:

  1. suitably qualified candidates selected for the role
  2. their skills and experiences are relevant to the organization’s future.

Poor selection processes often lead to poor staffing decisions and placing the right people in the right roles is never easy.  It takes time, discipline, and selection practices that are comprehensive, yet relatively straightforward to implement. At a minimum, it requires:

  • Clarifying core competencies and skills: these are the mission-critical competencies for your procurement organization.
  • Define roles regarding their purpose: how each contributes to the business goals and their required competencies, assessing candidates against standard criteria that meet the organization’s future needs.
  • Aligning job levels:  Properly aligning job levels between the two companies should begin as soon as possible after the close. Avoid replicating current organizational structure or the candidates’ past roles.
  • Identifying skill gaps:  Skill gaps should be identified and prioritized as soon as possible once the new organization design is available.  Your team must be sufficiently skilled in adjusting to resulting systems and process changes.
  • Aligning the assessment and selection process to deal timing:  A phased approach to team selection throughout the integration process:
    • Leadership and top management positions are filled during the early stages leading up to Day One or shortly after that.
    • Phasing the selection by job levels enables you to make simultaneously strategic selection decisions, build the team bench and organizational design.
  • Providing job training:  Training may be required to support core competencies when introducing new systems or processes regardless of whether the employee operates at a local or regional office, or at the corporate headquarters.

3. Knowledge Transfer & Retention

Take steps to ensure you identify the people and knowledge critical to immediate and longer-term business goals

Relying on the target’s management to identify employees critical to retain can have its problems. They don’t necessarily identify the knowledge transfer people needed. Instead, they pick the managers of the key people on their staff, but they may or may not be key to the integration effort.

A carefully tailored knowledge based skills assessment can help. Many companies typically only look one level down from the C-suite. Using talent analytics at each level of the organization, the integration team will be prepared on Day 1 to make staffing decisions immediately. Critically, based on data, not politics.

3.1 Validity . Reliability . Flexibility . Equitable

Use a skills assessments tool with the validity and flexibility to identify core competencies, applied knowledge and skills gaps. One that will assess candidates objectively by providing the desired reliability and fairness of outcomes.

Using a process that is fair and unbiased will satisfy legal counsel or HR on matters such as consistency and favoritism in the selection process. Reducing the chances of litigation or other legal repercussions that could create negative publicity, internal turmoil, and legal costs.

4. Bench Strength Assessment Critical to M&A Value Creation


Procurement Talent Development

Procurement Talent Development

The integration of the two organizations is ultimately the real-world test of a successful merger or acquisition. For the combined company, it can mean the difference between ongoing financial success and failure. The CPO must ensure Procurement play’s a prominent role in any integration team to ensure optimization of the procurement team bench during the merger or acquisition.

To ensure a good fit, the CPO must clarify and articulate the core competencies and skills required for key jobs.

A bench strength assessment will identify where knowledge lies and baseline maturity levels in critical competencies to steer a path towards the desired future state.

Furthermore, regular evaluation of employees will help the organization determine what drives engagement as well as help guide employees in career planning.

Call to action:

With the right talent assessment and selection tools, CPO’s can build a team bench capable of, delivering value from M&A. Develop a team to compete with the best and adapt to changing business needs. Managing and strengthening their bench to provide long-term value for the organization.

Nuff said …

If you would like to learn more about our Competency Profiling and Bench Strength Assessment services you can contact us here

iProcure provides market leading analytics and reporting to your desktop

iProcure provides market leading analytics and reporting to your desktop