Making a merger work: AOL Time Warner-the largest merger in history--may succeed because of HR leadership. (Mergers & Acquisitions).

Julian Kaufmann sits in front of his computer screen, reviewing the results of an e-commerce training program he and his HR team conducted for 1,300 top executives at AOL Time Warner Inc. "The evaluation of the program is pretty straightforward," explains Kaufmann, the company's vice president for leadership and organization development. "We just reach out to people who have been through the program, and we say, 'Tell us a story of what has happened as the result of your participation in this forum.'"

The e-mails that flutter across Kaufmann's monitor offer a glimpse of the potentially lucrative synergies starting to take shape. For example, in Sweden, a managing director of the corporation's home video business learned valuable tips about downloading movies from the Internet that he hopes to parlay into a marketing plan.

The training program is part of an aggressive HR strategy to help build the bottom line at AOL Time Warner, the company formed when Dulles, Va.-based America Online Inc. acquired New York-based Time Warner for $162 billion in the largest merger in corporate history.

When the merger received final regulatory approval in January 2001, the newly combined company became the world's largest media, entertainment and Internet service conglomerate. As it moves into its critical second year, its front office is relying on HR to help make all the pieces fit.

"I think HR--or what we call 'people management' -- will play a critical role," says co-chief operating officer Richard Parsons, who will succeed Gerald Levin as chief executive officer in May. "At the end of the day, our ability to succeed depends entirely upon the people who are driving our business-whether they have the creativity, capacity to innovate and ability to execute, and whether they can do these things collaboratively."

M&A Strategies

Parsons is banking on what he calls "enlightened" HR policies to fuel the company's drive to expand its market share. And experts generally agree that, having survived more than a year of layoffs, acquisitions and major internal adjustments, the company now will be able to sharpen its focus on HR strategies to chart its future course.

"I think you need a couple of years to determine if a merger is going to work," says Tom Wolzien, media analyst at Sanford C. Bernstein & Co. in New York. "The first year, you're kind of running on adrenaline. In the second year, you start to see what you've really got."