This case study, about challenges surrounding a key talent decision in the midst of a merger, generated great discussion at a recent Vanguard forum. Put yourself in James's shoes: What would you decide? As James's CEO, what would your thoughts be? As the firm's general counsel, how would you advise your colleague James?

James is the newly appointed SVP of sales and marketing in the global merger of the pharmaceutical company Wellness Incorporated, and the medical device company HealthSolutions Corporation. 

Wellness is the acquirer in the $50 billion combination, and James is a 15-year veteran at Wellness. The deal is set to close in a month, and James is now executing pre-integration planning in selecting a prospective top team.

The success of the combination will depend heavily on integrating the sales and marketing teams of Wellness, which sells to doctors and hospitals, and HealthSolutions, which sells mainly to specialists. Wellness is the acquirer. However, the HealthSolutions employees generally see themselves as an elite team, and James senses that many of them appear to resent the takeover.

After extensive interviews with 10 internal and external candidates for the global marketing role for the combination, James has settled on his top choice. He plans to install Maria, the energetic, engaging current head of marketing for HealthSolutions.

Maria has had apparent great success in transforming her formerly hierarchical marketing department into a flat and highly customer-centric global team, driving double-digit growth. Maria comes recommended as one of a new generation of demanding but empathetic “lead from behind” executives. Importantly, her previous role was as head of marketing for a 5,000-employee biopharma company, so she knows the pharma space. And as a Latina, Maria is a significant role model for an organization that has acknowledged being behind the curve on diversity.

James has an appointment with his Wellness CEO, Cynthia, to get her concurrence before making the announcement. 

“Along with all of her professional capabilities, I feel Maria will send the right message that we value the people and the talent in HealthSolutions,” says James. “And Maria will also help us attract and retain other Latino and women executives.” 

Cynthia agrees. James schedules an all hands meeting the next day for sales and marketing leaders, where he will announce Maria’s role among other key decisions.

Then he gets a head around the doorway of his office. It’s Ted, the current head of marketing at Wellness. Ted has just heard a rumor about Maria’s appointment. He is furious. Ted says his results at Wellness of 10% annual sales growth far outpaced the last three years of Maria’s team at HealthSolutions, which averaged 7% at best.

Ted says was not adequately considered to take the top job and he plans to speak to the CEO, Cynthia. He also claims that he is the victim of reverse discrimination. “Just because I am an older white man is no reason to give the job to someone clearly less qualified,” he says.

And as he heads down the corridor, Ted fires a parting shot: “You may want to ask about Maria’s expense reports” he says. “I hear there have been a lot of questions about some of her trips and meals, and her husband’s travel. Just ask the people at HealthSolutions.”

James calls Jackson, the head of HR at HealthSoutions, to get some perspective. “Maria is a top performer by any standard,” says Jackson, “and this move would send a terrific message to a lot of our people.  It could really help make the deal work.” Jackson also notes that the 7% growth was exceptional in the market conditions for those years.

What about the expense reports? “You know I cannot talk about confidential matters of this kind before the close,” says Jackson.

James goes back to his CEO, Cynthia, to asses the situation. Will Ted’s vocal opposition and claims of reverse discrimination deeply undermine Maria in the combined company even before the close? It could even lead to legal action.  

Also, it seems wrong to judge the expenses and ethical issues before knowing the facts – but what if Ted is right? It would be the end of Maria and tarnish James’ reputation and leadership.

“James, this is a judgment call for you” says Cynthia. “Think it through carefully. I’ll support your decision.”

The all hands meeting is in three hours. James can go ahead with the announcement of Maria’s role, now widely expected in both organizations. Or he can  put it on hold.

What should James do? Why?