The documents have been signed and the completion meeting is over but now the hard work begins. Our Talking HR blog provides an insight into the process of integrating newly acquired businesses via the recent experiences of Mitchells & Butlers, a FTSE250 restaurant and pubs business.
This week’s blog is a guest post from Liz Phillips, Interim HRD and formerly Director of Resourcing & Employee Relations at Mitchells & Butlers, a FTSE250 restaurant and pubs business. In this post, Liz talks about the process of buying and integrating the Orchid Pub Group and what made the project a success. So, for all you HR professionals out there experiencing a surge in M&A activity, this post is for you.
Mitchells & Butlers (M&B) acquired the majority of The Orchid Group in June 2014 for £266m. It comprised 173 pubs and a fully operational Head Office. The deal expanded M&B’s share of the growing pub and restaurant market in line with its strategy.
The aim was to convert the majority of sites to established M&B brands such as Harvester, Toby Carvery, Ember, Miller & Carter, Castle and Vintage Inns over a two year period.
The average weekly take of M&B brands is £22.7k compared to £15.3k in Orchid and the expected savings and synergies from rationalisation and support functions was circa £6m per annum.
A board of directors was appointed to lead the project including operations, finance, HR and programme planning. This was a senior leadership team with clear accountability for all aspects of operating the Orchid business successfully and its integration. The team had not previously worked together but quickly established a strong rapport recognising each other’s roles, responsibilities and areas of strength.
A priority was to ensure effective and on-going communication with all 4,000 Orchid employees throughout the business from day one.
Our strategy was to explain to them the wider business context of our plans and provide regular updates throughout the period of integration. It was also important for us to understand the cultural differences and psychological impact of change on the Orchid employees, and particularly in closing their head office while also keeping the business running in the medium term.
The people at Orchid were amazing, supportive and open with us. Whilst we did everything we could to involve, reward and communicate with them we really couldn’t have completed the integration successfully without them. There have been on-going 1:1s, briefings, newsletters, weekly updates, road shows, training courses, match making for roles and conferences.
We recognised aspects of the way Orchid did business which we admired, and especially certain aspects of operational practices which we could learn from and later introduced into M&B.
In terms of leading HR, the emphasis was to continue to recruit, develop and retain people to run the businesses in a rapidly changing environment. We closed the Orchid Head Office early in 2015 and this affected around 100 people. There were a number of redundancies however the focus has been on deployment and employability to enhance people’s skills and experiences for their future employment.
The plan is on track and performance is looking good from an employee engagement, scorecard and ROI perspective!
So, if you are planning any M&A activity, my top tips to manage integration would be:
- Agree clear strategic objectives
- Apply exceptional project management
- Ensure good two way communication
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