Too often, we hear of employees who don’t know, on Day 1, who their new bosses will be or what processes to follow. This is particularly true when the change is negative, but even positive change can affect some employees negatively. Unleash their potential. A structured focus on and investments in communications, with the support of senior leadership, have been shown to yield great benefits: a motivated employee base and engaged vendors, partners, and other stakeholders, all supporting the newly formed company’s success. Studies have pointed out that anywhere from 50 percent to 70 percent of mergers end up failing, or at least not delivering the results intended at the time of announcement. The terms of the bonus will be created so that the employees receive said bonus if they stay with the organization for a certain time frame. This is also an important time for the leadership team to look for and listen to feedback, reinforce what’s going well, and take corrective action when necessary. But the phrase gets misinterpreted. They must be excited about the new company’s vision and buy into it. An … Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. Employees have to be persuaded to believe in the corporate vision and to act to bring it about. The communications team announces the deal and then helps to develop, engage, and manage integration planning and execution. In addition to a regular cadence of integration communications, specific messages about important decisions (such as the location of headquarters or additional organizational moves) are essential to ensure that changes are understood and accepted. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. before implementation. Employees are the key to a successful merger. It falls upon management to sort these issues out. Company Name or Letterhead Address City, State Zip. The US has seen more than 325,000 mergers & acquisitions since 1985. Be sure to know all the information and clearly map out what information you will convey, when you will convey it and how you will phrase that information. Being prepared with approved responses in the event of leaks saves time and angst in what would otherwise be a mad scramble to get messages coordinated on both sides and approved quickly. While a company can never be 100 percent prepared, this systematic approach greatly improves its operational rigor. Internal communication is the process of sharing information to achieve an organization's objectives.It relies on leadership capabilities such as influencing and storytelling.Internal communications also has technical elements such as managing a variety of communication channels.The following are illustrative examples of internal communications. Alignment also sets up and clarifies the conversation about who will be doing what, and when. Communicate early and often with employees to help ensure a successful employee survey. Yet research has consistently indicated that mergers rarely fail due to the structure or regulatory hurdles of the deal. This is a communication task. In a recent merger, targeted communications and leadership time spent cultivating the high performers—including one-on-one discussions between them and the leadership on future career paths—let them know how greatly they were valued. Business communication is crucial for every company’s success, and this is especially true when big changes are happening. The goal is to spend the majority of time and energy on the material events, while making sure that regular updates continue to flow. A leader at one of the organizations was exceptionally good at communicating how individual employees would benefit from the merger. Each phase in the merger time line has its own unique communications focus (Exhibit 1). However, given most humans are programmed to avoid confrontation, managers often withhold this information for far too long. As of mid-November, global M&A activity has risen to $3.1 trillion for the year, up a whopping 52 percent compared to the previous year, according to a recent report by USA Today. The sooner that everyone can process the change, the more seamless the integration can take place. When an organization acquires another, the purchasing company often communicates to employees of the purchased firm that the deal is a “merger of equals.” Unless this is the truth, don’t say that. In fact, more frequent communications usually come afterward. They also convey the combined organization’s future vision and strategy to key stakeholders—both internal and external, including customers, regulators, vendors, and employees. This can be difficult if you lack the proper comms platform to reach all employees. Syndicating and getting alignment on these issues gave the team much-needed focus and direction and helped it execute the plan successfully. Among the factors that impact M&A performance is the quality of the communication with employees. This is particularly true when the change is negative, but even positive change can affect some employees negatively. Announce the merger. Employees decode it to … One mistake we see companies make frequently is “going dark”—communicating little or nothing between the announcement and Day 1. Obviously employers cannot control how employees communicate outside the workplace -- except as it pertains to work issues. It would be wise to consider an employee communication plan a vital element in the event that an enticing deal comes to fruition. Example 3: Company merger letter. But the phrase gets misinterpreted. Employees need clarity on facts and figures, to have opportunities to hear information first-hand and be able to ask questions and to feel part of the process. Although in a perfect world, everyone in the organization would have the same information as everyone else, this of course isn’t realistic. In addition, the communications plan lays a foundation for the combined organization’s future success.It is one of the few merger workstreams that go “live” immediately, as soon as merger … Always provide constant status updates to employees, and continue to let them know their role and how they can make the process more seamless. Actually, the term “merger of equals” is a technical term used in M&A to indicate, for example, that the deal qualifies for a specific tax treatment. The communications workstream springs into action very early in the merger process, and the pace rarely lets up much. After the announcement, the team will have time to refine the governance process and to add members. Please try again later. Some outsource the work entirely to the HR and communications functions—a missed opportunity for the integration team and executive leadership. hereLearn more about cookies, Opens in new External stakeholders include investors, who must be persuaded of the merits of a deal, and analysts, who expect management to make the strategic and financial case for it. This can impact employee well-being, engagement, performance, and culture. In order to mitigate this dissonance, managers should try to provide all relevant information to employees once feasible. The communications plan must absolutely address high potentials and critical employees. Developing a compelling set of core messages grounded in a deal’s rationale is one of the most important moves for a CEO and the C-suite. Of course, NEVER leak out confidential information, as it could threaten the entire deal. Communicating changes to the employees. Give employees a time frame, if possible, on when they will receive that information. Learn more about cookies, Opens in new In our work with companies, we have found that several best practices are critical to develop a structured merger-communications strategy. (6) Nonverbal communication is just as, if not more important, than verbal communication. Business communication is crucial for every company’s success, and this is especially true when big changes are happening. And that is just one issue to worry about! The merger and acquisition process can immediately impact the stress levels of employees involved. While discussing employee benefits has sometimes been regarded as a human resources minefield, it's critically important to have a strategy in place for communicating changes in benefits that fully informs your workforce and doesn't damage employee … Including an employee survey in your post-M&A plan is another way to keep the lines of communication open, and demonstrate to people that their feedback is important. A good communication plan should be established before the deal is finalized, and carried on throughout the process. But instead of answering with speculation, hearsay or rumors, just say “I don’t know.” Then offer to find out that information and get back in a timely fashion. Digital upends old models. I encourage all employees to review the press release and visit our merger website for additional information. The employees need to know the direction of the organization. If you would like information about this content we will be happy to work with you. Once all this has been gathered, the communications team and the IMO analyze the feedback and take corrective action. Ways to prepare and support your employees 5. These all reflect the main goal: to ensure that the right message about the merger is communicated consistently. Communications should start well before the engagement survey begins, and it should continue after the survey results have been received. Day 1 is a time not only to celebrate the coming together of two organizations but also to give key stakeholders clarity and guidance. Structured communications play a critical role in mergers by preventing the distractions that often accompany them and could even damage the existing businesses. Sample merger and acquisition letter to employees. At the heart of every successful merger/acquisition is proper and thorough communications. Likewise, vendors should be informed of any changes to payment terms. Communication during these times is a powerful tool that can help keep your employees engaged during difficult times. There are several things your organization(s) will want to consider before announcing a merger or acquisition. Use minimal essential A six-step process is essential to build, execute, and constantly monitor and improve merger communications (Exhibit 2). 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