Managing Communication During a Merger
For many businesses, mergers are prime strategy for expansion. A 2018 analysis by Deloitte reveals that a majority of US corporate and private equity executives believe that M&A activity will rise throughout the year, both in deal size and quantity. Like any transaction, mergers don’t come without risk, much of which can be mitigated simply by prioritizing company wide-communication. Failure to keep employees informed as to how the merger will affect them can lead to false rumors and productivity-limiting gossip. To carry out an effective merger, executives should ensure that information flows smoothly and efficiently.
Countering Culture Clash
Every company operates by its own set of principles. Fusing together company cultures can result in a fair bit of friction, especially when each business operates by vastly different codes of conduct. To stop culture clash from dividing employees and dissolving deals, it’s essential that communications experts craft a new mission and company philosophy, and develop tactics for integrating those values into everyday business. The same messaging should be spread externally, via public relations and marketing teams.
Discrepancies between what a company says, and how it acts can break employees’ faith in executives. Bluntly announcing an acquisition or merger, or attempting to pass it through in secrecy can damage workers’ loyalty, and eliminate their passion. Representatives should be briefed on a proactive communications routine that includes a timeframe for announcements and customization for specific audiences. In addition, a backup communications plan should be developed that accounts for surprise developments.
Retaining Star Workers
A major concern for employees is job security; workers want to know the direction their careers are headed, and what their responsibilities will look like in the future. If executives fail to provide a realistic picture, some employees–particularly those with the strongest job prospects–may choose to abandon ship before they are sunk by sudden change. The mass exodus of skilled employees is a prime culprit in the failure of M&A transactions following a deal. Simply being honest with workers can prove that you’re invested in their future, and there are myriad ways to relay what you know without overstepping legal bounds.
The effect that mergers have on employees can be severe; uncertainty can weigh heavy on employees’ minds. Stunted motivation and erratic decision making are the symptoms of a stressful atmosphere. Working in such conditions throughout the long, arduous acquisition process can be grinding, which is why about 70 to 90% of mergers fail to produce results that satisfy stakeholders. The antidote to poor performance post-merger is not only developing a communications plan, but putting it into action consistently, both before and after the deal closes.
Keeping employees apprised throughout an M&A deal via a proactive, consistent system for sharing information will ensure that affected companies secure a place in the minority of mergers that succeed.Share: