Apr 18, 2018 | Barry Lawrence, MBA, aPHR, Staff Writer for HRCI
Facing a Complex Acquisition, Wyndham Turns to HR
This article was originally published in the Change Agents, a paid content program developed by HRCI in partnership with WSJ Custom Studios.
Mergers and acquisitions are business as usual at Wyndham Destination Network, the world’s largest provider of professionally managed, unique vacation accommodations and a division of Wyndham Worldwide. But recently, an acquisition opportunity arose to truly diversify the company’s offerings. Though the division provides many beach, ski, mountain and country rentals, it had a very limited presence in the urban rental market—and was keen to offer city options to its customers. So, leadership’s interest was piqued when a startup specializing in European urban rentals emerged as an acquisition opportunity.
While this large-scale opportunity was full of promise, it also posed many challenges. Blending the work cultures, technology, talent and leadership of a large U.S. corporation with a small European startup would require a solid, strategic vision—and lots of planning.
“We buy companies not only for their products but also for their people. The last thing we want after an acquisition is great employees with excellent capabilities to walk out the door.”
To make the transition as smooth as possible, Wyndham Destination Network leaned on the expertise of Lisa Calicchio, executive vice president of human resources. Wyndham has long valued its HR department as a strategic business partner, so when this opportunity arose, Calicchio and her team were ready.
“It was important for me to understand completely the business in question and how it enhanced the value of our brand,” Calicchio recalls. “For Wyndham Destination Network, that meant understanding the value for our guests, homeowners and employees.”
Calicchio’s team focused on the critical components of leadership and talent retention. The startup’s founder planned to work on other ventures following the acquisition, so Calicchio’s team worked closely with him to craft a consulting agreement that outlined his objectives and satisfied his needs and the needs of Wyndham. The HR team, for example, collaborated with its new acquisition partner on succession plans and leadership stability. Updates and findings were relayed back to the CEO and other leaders. With the founder’s help, Calicchio’s team ensured that Wyndham retained the company’s top talent.
“We buy companies not only for their products but also for their people,” she says. “The last thing we want after an acquisition is great employees with excellent capabilities to walk out the door.”
Calicchio’s team identified “the absolutely critical players who were going to keep the business going,” then worked with the finance team to understand exactly how much money would be dedicated to different parts of the deal, including the retention of employees. “We weren’t building all of the financial modeling in HR, so we needed to understand what amounts we had to work with when it came to retention compensation so we could structure our offers appropriately.”
The startup also came with its own proprietary technology—an element that underscored the importance of keeping talent onboard. “In the travel space, technology is huge,” Calicchio says. “Travelers want a seamless experience, so we wanted to maintain the user experience that was already working well.”
The integration plan emphasized retaining employees who understood and ran the proprietary technology. “We needed the secret sauce of the people who made that recipe,” Calicchio observes.
“We should always be seeking to grow as HR professionals. Every deal makes you smarter and adds to your depth of learning.”
When it comes to retention, culture always plays a role. “We wanted to keep the magic and the entrepreneurial spirit that made the startup great,” Calicchio recalls. To that end, the HR team spent time with the founder talking about the dynamics of the organization, including how the company went about finding talent and what kind of growth opportunities employees expected. Many of the company’s employees were Millennials who valued flexibility and the prospect of moving up within the organization. “We wanted to energize that workforce,” she says. The findings from Calicchio’s team became a key part of the comprehensive integration plan, which specifically addressed talent retention.
Finally, Calicchio worked with the communications team to understand how the acquisition would be communicated to the wider world and to help plan the timing of the deal. “What else is going on in the organization at the same time? Are we about to release earnings? Are we about to complete a deal in another part of the business? Those were all important factors that had to be considered,” she recalls. “I talked with our communications experts about who needed to know, such as the trade association and global media outlets.”
In the end, the acquisition closed with no major surprises, thanks in part to HR’s role in crafting a smooth transition plan that touched on leadership, employee retention, work culture, technology and communications. Calicchio credits her team’s ability to seek out knowledge and expertise across all areas of the company as a contributing factor in the success. For her, personally, she believes the skills acquired through earning a Senior Professional in Human Resources (SPHR) certification from the HR Certification Institute aided her ability to get results. Twenty percent of Calicchio’s team is also made up of HRCI-certified professionals.
“[My certification from HRCI] gave me the foundation,” she observes. “It helped me elevate my strategic thinking, think constructively about the outcomes I wanted to drive and ask the right questions. We should always be seeking to grow as HR professionals. Every deal makes you smarter and adds to your depth of learning.”
Thinking beyond traditional roles to help solve a company’s challenges—and executing solutions—is essential for today’s HR teams, Calicchio adds.
“It’s not just about getting a seat at the table with top leadership,” she says. “It’s what you do with that seat at the table—how you add value.”