Role of communication during mergers and acquisitions
How to ensure proper communication during a merger
Communication plays an important role in every organization in terms of everyday performance and overall productivity. The role of communication is that of the glue that binds the people and departments inside an organization together. However, communication grows even important during mergers and acquisitions. When two companies merge there is a lot of confusion surrounding the event and successful communication only can dispel the confusion and help conduct the merger successfully. To ensure the success of a merger or acquisition, it is important to focus on communication. Often mergers fail. There are multiple reasons behind it which can be technical, strategic or cultural in nature. A lack of cultural alignment between the two merging organizations can also lead to failure. If there is a lack of proper communication during the merger process that can also lead to failure. There are a large number of distractions that can make it difficult to handle mergers successfully. A strong merger communication strategy is essential to control rumors, retain talent and boost employee morale while the merger is underway. There are 6 important steps to building a successful merger communication strategy
Need for a detailed communication plan:
The role of communication is central to the success of a merger. Top leadership and management need to create a multi-step communication plan. The process also requires continuous refinement based upon the situation.
How to build a successful merger communication strategy: 6 steps
There are 6 important steps to building a successful merger communication strategy :
Identify the main stakeholders:
Every merger situation includes a large number of stakeholders. Companies need to develop a customized and targeted approach for each major stakeholder group whether it is an internal stakeholder or external. External stakeholders include customers, vendors, investors, analysts, government and the public. At the time of the merger, the customers need to be convinced of continuing service in order to be retained. The investors need to be persuaded about the benefits of the merger and the government regulatory agencies which are worried about anti-competitive behavior or job losses resulting from the merger should be provided proper information.
To prevent the public from forming a bad opinion of the merger, it is important to provide the right information and dispel any confusion arising from the situation. Internal stakeholders mainly include the employees who are particularly important. The first thing is to build some excitement and communicate the new company’s vision to them. Special attention should be paid to high performers. Leaders can have a one to one discussion with them in order to avoid any form of anxiety or confusion. If a company leadership fails to communicate with its top performers at the time of merger attrition rate can shoot higher
Identify the key milestones:
The communication process begins very early during the time of a merger. A good merger communication plan identifies the key milestones and trigger events. The goal of the communication plan is that most of the time is spent on important events while also ensuring regular updates. You can set milestones like day one and trigger events like the announcement of leadership appointments. Moreover, the leading decision-makers should agree upon what the focus of the plan is and what does not need to be included. This will also ensure commitment from the leadership.
Setup governance and resources for the communications team:
Apart from making the necessary resources available to the communication team and the integration leadership, it is important to set a governance process and make roles and responsibilities clear. Generally, there are four roles which include the integration steering committee, integration leader, communication team, and the Communications leader. Well-defined governance helps with the effective and timely execution of the communication plan. It also speeds up the process of execution.
Develop the core message:
All the communication during the integration period should remain anchored in a set of core messages. The reason behind the merger is one of the fundamental aspects of the core message. Then comes the employee value proposition which describes how the merger benefits the employees and what the future holds for them. 'Change Story' or why this change is essential and beneficial to all stakeholders is also a critical aspect of the merger communication plan. The communications team needs to be clear and build a compelling picture of what has to be done to unlock the deal’s value. Moreover, the core message can be personalized for each important group of stakeholders like vendors, investors, suppliers, customers, government officials, and the public. For the CEO and the top executives, it is important to develop a compelling set of core messages rooted in the rationale behind the deal.
Develop a step by step plan for each milestone:
To achieve perfect communication during a merger, it is important to develop a step by step plan for each major milestone. A detailed communication plan includes everything related to the merger including who, what, where, why, how, and when. It is important to consider all the merger communications including all stakeholders as well as key milestones and target events apart from regular updates for different groups of stakeholders. It also includes all major deliverables, audiences, deadlines, etc. Moreover, the communications teams should use multiple channels to reach their target audiences and ensure that the message is fully realized and reinforced. Social media has proved to be a very useful channel to reach multiple stakeholder groups at once from customers to suppliers, investors, government and the general public. When it comes to engaging employees also, social media is a highly efficient and effective channel.
Establish two-way communications:
Establishing two-way communications means setting systems in place to gather feedback. It ensures that the messages are received as intended and if there is any gap, it is observed, brought to light and addressed properly. Most often the communication efforts by merging companies fail in this area. In many cases, while companies do not make any effort to gather feedback, in others, nothing is done with the gathered feedback. It is the employees who feel most frustrated in such a situation thinking they are just being convinced to believe everything without letting them communicate their concerns. Companies should use a multi-channel feedback mechanism. For example, a good feedback process sues various channels like surveys, websites, and email feedback. Once the feedback is gathered, the communications team takes the corrective action in coordination with the Integration management office. Some of the most respected employees inside the organization can act as influencers to aid the process of feedback. Using the support of these employees to aid feedback speeds up the process and also adds credibility.
How to put a structured merger communication plan in place:
Developing a structured communication plan is critical to the success of a merger. However, there are several best practices that are critical to developing a structured merger communication plan for a merger.
Maintain focus on business objectives:
The integration committee and the communications team should maintain focus and direct their energy towards building business value.
Start early and refine:
Communication should start early before the merger. As you move, address the evolving needs of the stakeholders.
Roles and processes should be defined clearly and executives need to be engaged directly.
The communication team should be conscious of the culture inside the organization. For example, if bottom-up thinking has been an integral part of the core culture of the organization, then top-down messaging would not work as well in that situation.
High quality and compelling communication:
Apart from maintaining high-quality communication, there is also a need to reinforce it using various communication channels.
Messages should be directed at humans:
Make your message look human - means from humans to humans and not like written by robots or directed at robots. Do not be too formal or legalistic while addressing and use a tone that is responsive and respectful.
Activate your leaders:
Communicating with customers should not be left to the communications team alone. Instead, it is important to align the top leadership, middle managers, and the customer-facing staff so as to achieve effective and consistent communication. Many companies make the mistake of outsourcing this work to the communications functions which they should not.
Stay up to date:
Integration Management office, the communications team, the merger team, and the other major workstreams should stay connected so that up to date information is available to all. This will help achieve effective and proactive communication.
Keep collecting feedback from various channels and respond regularly and actively.
There are several pressing needs before the companies when there is a merger underway In such a situation often a merger communication plan becomes a low priority task for the companies. Many of them make it the HR and the communication team’s responsibility. If that is the case then the leadership and the executive committee are missing a very important opportunity which they could sue to connect with all their stakeholders. However, in many cases, it has been proved that investing in structured communications at the time of a merger yields better than expected results. The support of the top leadership is critical. Simultaneously, it is essential to focus on employee engagement and motivation at the time of a merger to avoid losing any critical talent.