(Left to right) Qualcomm executives: Michelle McKinney, senior director, total rewards management; Ann Owens, vice president, total rewards management; and Pam Sauter, senior vice president, human resources
(Left to right) Qualcomm executives: Michelle McKinney, senior director, total rewards management; Ann Owens, vice president, total rewards management; and Pam Sauter, senior vice president, human resources

While wireless communications leader Qualcomm Incorporated has undertaken numerous mergers and acquisitions in recent years — 17 transactions in the past five years, to be exact — the acquisition of Atheros Communications in early 2011 was a unique endeavor. Acquiring Atheros, with an enterprise value of $3.1 billion and approximately 1,700 employees in 16 countries at the time, was Qualcomm's largest transaction ever.

"This was a supersized acquisition with many unusual elements," recalls Michelle McKinney, senior director of total rewards management at Qualcomm. "Due to the breadth of the workforce, the variety of global locations, the public nature of both companies and the tight time frame, we needed a consulting partner to help us meet our goals."

She adds: "As a company we know what we don't know. We recognized that this particular acquisition required a different approach from what we'd used in the past. And we knew we needed the expertise of Towers Watson to help us succeed."

Twists and turns

The complexities of the Atheros acquisition dictated the need for a true team effort. The transaction had numerous global implications, and required financial and restructuring decisions, as well as benefit and compensation assessments. "The timeline for analyzing data and making decisions was quite demanding, and left no room for error," explains Ann Owens, Qualcomm's vice president of total rewards management. "The process was definitely full of twists and turns."

Perhaps most challenging was the need for HR to send personalized welcome letters and employment documents to 1,700 employees within three months after the acquisition was announced. And before generating these documents, HR had to conduct due diligence on existing HR programs and make many decisions about organizational design, job mapping and titling, as well as compensation and benefits.

Like Qualcomm, Atheros was an international company, and several country-specific regulations complicated the close. "The acquisition immediately expanded our global workforce," says Pam Sauter, a senior vice president of HR at Qualcomm. "We had to thoroughly understand all the region-specific differences between Qualcomm's and Atheros' operations."

(Left to right) Michelle McKinney, senior director, total rewards management (center), with Towers Watson account director Kathy Christopher and senior international consultant Iain Jones
(Left to right) Michelle McKinney, senior director, total rewards management (center), with Towers Watson account director Kathy Christopher and senior international consultant Iain Jones

Because Qualcomm and Atheros were independent, public companies, communication was crucial. "We had to be prepared to talk with employees of both Qualcomm and Atheros quickly after the announcement, in an accurate and consistent manner worldwide," insists McKinney.

An effective communication strategy also helped company leaders manage change throughout the process. Explains McKinney, "It was important to reduce employees' concerns about the acquisition, so we delivered frequent, personal communications throughout the transaction to keep employees informed and ensure that they were part of the process."

Qualcomm's HR leaders also stressed the importance of completing the integration without disrupting productivity or ignoring the needs of current employees.

"We knew at the outset these were pretty big challenges," McKinney adds. "But with the right plan in place, the appropriate resources and a specific role for each team member, we were confident we could successfully meet them head on."

Building the playbook

A few months before the acquisition was publicly announced, the HR team began creating an integration task force. Roughly 100 HR employees from both companies formed this sizable team. Having worked with Towers Watson for several years on benefit projects, the HR team brought in Towers Watson consultants to join the acquisition effort.

The first step was a team session to plan the integration strategy and create a blueprint for the integration. "This blueprint outlined in detail the deliverables, goals and timing milestones," says Iain Jones, Towers Watson senior international consultant.

Adds Kathy Christopher, Towers Watson account director: "Once built, the playbook positioned Qualcomm for success. It allowed the team to figure out exactly what needed to be done when and by whom."

Internal integration

As with any large corporate transaction, change management was a significant element of the integration. Driven by the conviction that Atheros employees needed to feel like part of the Qualcomm family from day one, the HR team made the "employee experience" a top priority.

Efforts devoted to the employee experience included the welcoming process. "With so many global locations, we needed to manage a multitude of issues and tasks, including preparing personalized welcome letters, providing all employees with new badges, hanging new building signs and establishing IT passwords," says McKinney. "Our goal was to enable employees to get back to business quickly after the close as part of the new Qualcomm team."

Another challenge was managing a large quantity of data on new employees. "We'd never used anything other than an Excel spreadsheet in the past, but this vast amount of information was too much for just a spreadsheet," says Owens. "We needed to create a new system to upload data from Atheros and pair it with Qualcomm data." The new system came in the form of an acquisition module, which HR used to upload and track data from Atheros employees.

Communicating so many changes to all employees required a comprehensive communication campaign using face-to-face, video and online vehicles. The team created an extranet to provide employees with detailed information on the company and its benefit programs. Additionally, senior leaders made numerous presentations and held orientation sessions and team meetings.

A collaborative effort

Qualcomm's leaders consider the large, complex acquisition of Atheros a success. "For a merger of this magnitude — with two public, global companies moving at a very quick pace — it went extremely well," says Owens. "We knocked it out of the park."

The Qualcomm Integration Team
The Qualcomm Integration Team

Sauter agrees, citing true teamwork among HR, Qualcomm leaders, the Atheros team and Towers Watson consultants as the primary reason for the smooth transition. "All of our teams came together to make this a victory."

Adds Owens, "Not only do we have impressive talent here at Qualcomm, but our strong, collaborative relationship with Towers Watson helped us make this enormous acquisition a success. That partnership allowed us to augment our staff, enhance our capabilities and recognize the strong need for change management."

While the integration is still a work in progress — with another one to two years of work ahead — McKinney says the experience has been beneficial. "Not all acquisitions are the same, which we understood from the time the transaction was announced. We had unique challenges all along the way. But we also learned valuable lessons that will definitely help us with future acquisitions down the road."

Ensuring a Successful Acquisition — Words of Wisdom

Qualcomm's HR leadership team offers the following advice for successful acquisitions:

  • Set clear objectives for the transaction, so the HR team can set specific goals and understand what success will look like.
  • Continually remind stakeholders of the endgame. Set your goals early, and repeat them often — so HR and all your internal business partners understand the priorities.
  • Reach out to employees often to communicate the benefits of the company's decisions. Consistent, carefully developed messages, delivered frequently via a variety of channels, can help employees manage the transition to the new organization.
  • Stay flexible, and be willing to change direction along the way.