Dennis Carey: When leaders forget the human capital of a deal
By: Dennis CareyDuring the days of speculation over the Microsoft/Yahoo merger, I made a comment to a reporter for Dow Jones that Carl Icahn (or any activist shareholder) winning control over Yahoo could undermine the company’s ability to function. That thought was reinforced when he also was spurned by Biogen Idec.
On the surface, when a billionaire investor comes in and bids up the price of the stock in anticipation of a merger, it appears to be good news all around. Too many dealmakers focus exclusively on the numbers, the anticipated synergies, and the big payday and ignore how the news impacts employees. When star employees feel ignored, undervalued and not part of the future, they are likely to take their stock and cash out. The flight of talent negatively impacts the entire company as the enterprise value is diminished for all the shareholders.