Communicate, communicate and communicate again The change of scenery can decrease anxiety and increase humility. How should we communicate the purpose of this change. Employee loyalty and trust are at stake. Your communications teams should create a strategic plan to convey the values and vision of the newly joined organization. Reason for the merger or acquisition 4. Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. Some rumors are just worries and relatively harmless, but other stories or even media leaks can damage the company and cause valuable employees to jump ship. Now that you know what to include in your letter, here are some great samples to follow: Mergers and acquisitions can be great ways to accelerate growth, but when they fail to produce the desired result, a common factor is poor communication, including a lack of information during the pre-merger period and a lack of post-merger cooperation and coordination. Outside of profit and market share, one desired outcome of a merger is to build a unified culture. 1. Make ambassadors out of those who hold valuable information and can help you grow the new brand. Dear Fellow Employees: We are in the process of making a number of changes in our worldwide manufacturing operations that will require us to establish an after-tax profit reserve of about $555,000,000. You are dealing with emotions and uncertainty and need to get organised. If you've scheduled a meeting to address the merger in person (which you should), alert them of that so they know when to attend and to bring questions. The failure rate of mergers and acquisitions consistently falls between 70% and 90%. This is a communication task. Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. Timing is critical, with small windows to conduct due diligence and communicate any changes to employees, shareholders and customers.Then there’s the actual work of merging two organizations. It will outline the timeline of the merger/acquisition and provide details about both companies, including the steps for moving forward. Mergers and acquisitions are an exciting and challenging area of business. In the interest of security, employees may focus on their own work with little regard for others. Since employees often feel blindsided when a deal is announced, company leaders and other internal communicators can minimize the negative impact of M&A by creating a proactive communications strategy. The leadership approach: Foster culture champions. Others will become invested in the potential that lies ahead. If there is a lack of proper communication during the merger process that can also lead to failure. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. After a merger, HR leaders are often tasked with developing an internal communication strategy. 2. A good communication plan should be established before the deal is finalized, and carried on throughout the process. Using Lean Strategies to Achieve Team Synergy and Efficiency, From COVID-19 to Hurricane Season: Disaster Preparedness for Small Business, Your Guide to Creating a Small Business Marketing Plan, How to Make Money in Retirement: A Guide to Turning a Hobby into a Side Business, The Best Employee Monitoring Software of 2021. In 2010, PWC conducted a survey on companies that had completed mergers and acquisitions. Do we have a central FAQ document for managers? Too often a company will focus on communicating a merger or acquisition to such external constituencies as the media and Wall Street analysts. Addressee Address City, State Zip. Mergers are a great proxy, as they evoke a great deal of uncertainty, and even loss, among impacted employees—and if mergers are any indicator, the best way to communicate is … But when is the right time to tell employees about a pending merger? Employees have to be persuaded to believe in the corporate vision and to act to bring it about. Since people at both companies are concerned about their job security and responsibilities, employees want to know what changes are coming and when. 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. This article will help you know what to do, how to plan, how to involve employees and how to scope out a timeline. These transactions can have a significant impact on employees – increasing stress, anxiety and uncertainty. Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Be sensitive to the time it may take for employees to accept change post merger. You want them to feel heard and valued, not left in the dark. This discourages speculation while helping to maintain trust during times of organizational change. 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. What do they sell?) One positive way to do this is to establish a company culture rooted in honesty and openness, which can allay employee anxiety during a potential company sale. How a company communicates during a transaction has a direct impact on its employees' loyalty and trust. As frequently mentioned by researchers and practitioners, many mergers and acquisitions (M&A) fail to achieve their expected results. Mergers are tricky business. The objectives of this email are to update you on how the integration of the two businesses is progressing, to explain what integration challenges lie ahead, and to highlight how you can continue to help the company deliver on its potential. It would be wise to consider an employee communication plan a vital element in the event that an enticing deal comes to fruition. You need to inject accurate information throughout your workforce. But the phrase gets misinterpreted. Mergers and acquisitions: How to keep employees from leaving. To combat rumors and twisted facts, create a solid communications plan for your employees, leadership and other key stakeholders, such as customers and board members. Employee survey questions to use post-merger or acquisition 4. M&As can be long, complex processes. Early, frequent communication following merger has impact EXAMPLE Change in mean from pre-merger benchmark Control plant – no communication until formal announcement of organizational changes Experiment plant – early, frequent communication during planning process Stress – 9% less Uncertainty – 22% less Intention to remain – 6% higher 4 5 6 4 3 3 5 Mean Mean Mean 2 2 M As a result, pride can surface among those who are a part of the acquiring company. Communication challenges came out as one of the top factors that caused company synergies to fail. According to Deloitte's 2018 M&A Trends Report, this was not surprising: "Corporate and private equity executives foresaw an acceleration of merger and acquisition activity in 2018.". Communicating changes to the employees Business communication is crucial for every company’s success, and this is especially true when big changes are happening. Address these issues upfront – even the uncomfortable ones – by describing any immediate changes that will affect employees. There are a large number of distractions that can make it difficult to handle mergers successfully. A merger is a common step towards achieving long-term success, but without a strategic communication plan, that path can be fraught with disaster. Employees are sometimes asked to alter their routine during the acquisition process: Employees spend a significant amount of their lives at work. A merger or acquisition? Ask yourself: Your internal communication plan should be multi-tiered and intentional. employee attrition during a merger or acquisition. At a large corporation, efficiency and operations depend on the support of thousands of individuals. The announcement of merging companies is usually kept private until the m&a deal is signed. Change can breed gossip, uncertainty, fear, and disengagement. Download our free change management communication templates. Communication challenges. One of the many joys of being an Internal Communicator is the variety of our work. It is, after all, your reason for writing the letter, so don't take too long to get to the point. 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. hbspt.cta._relativeUrls=true;hbspt.cta.load(99128, 'b65a84a8-3072-4f48-832e-1203b9fa8d49', {}); Uncover engagement obstacles and opportunities, Leadership Approaches for Communicating a Merger to Employees, What leadership approaches will be effective in leading a merger. It should add clarity, not confusion. Not all emotions around mergers or acquisitions are negative. Whether you're buying or selling, it's important to keep your employees in the loop by communicating openly and effectively. For example, if their benefits are remaining the same (or improving), emphasize that fact. We help internal communications teams measure the effectiveness of their emails to employees. Create opportunities for your team to collaborate as a team. Communicating changes to the employees. A well-crafted communication plan can help reduce employee anxiety and cynicism, protect the acquirer's credibility, and prevent top management from being accused of reneging on its promises. You can fight selfishness with relationship- and team building. Empathy for employee needs breeds the help you need to manage change. Write clearly and openly about how the merger will affect their day-to-day operations. A merger or acquisition can signal a need to refresh your resume. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” Effective communication is critical during M&A for four primary reasons: Whenever a merger or acquisition deal is on the table, keep your employees in the loop as much as possible to help ensure your M&A becomes one of the 10% to 30% that succeed. Breaking the News How to Communicate a Merger to Employees Case Study Solution & Analysis. Communicating transparently during a merger or acquisition can be challenging at times, as often details of the transaction cannot be widely shared before everything is made official. A leader at one of the organizations was exceptionally good at communicating how individual employees would benefit from the merger. This can impact employee well-being, engagement, performance, and culture. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” Employee morale will take less of a hit if they feel they are kept in the loop. This makes it challenging for employees to mentally prepare for change. Communication management is in all 13 steps. Because affected employees will eventually see through the nonsense, and you can expect lost respect and lower productivity. For instance, maybe you're looking to increase your customer reach, or perhaps you want to diversify your operations. Your merger and acquisition letter to your staff should include the following (in this order): The first part of your letter should be the announcement of the merger/acquisition. This can create a flood of questions including: Employees crave stability. The onus should be on those employees who will be directly affected by the change, and managers need to be very aware of the vibes in their departments. Voluntary turnover is common when individuals feel their future-fit in an organization uncertain. Why survey after a merger or acquisition? 4. Acknowledge employees’ feelings as some may feel a genuine sense of loss. After the deal closes, internal communicators need to maintain the momentum, minimize culture confusion and work to improve employee morale. A merger is a time of uncertainty and risk ….. Employees may leave Customers are worried Market / Shareholders may react negatively Competitors attack : people & business Productivity / revenues often decline …..Communication is essential to focus the organization & to help mitigate these risks 3 5. Address how the merger will affect employees directly. Communication Skills During your career, you might be responsible for informing your employees about a merger or acquisition. Ways to prepare and support your employees 5. Communicating with employees, empowering them and creating a culture for them to thrive are all fundamental parts to integration. Consider how you will manage the emotions of employees motivated by change. This section should immediately attempt to clear up any confusion, anxieties or rumors that have been surfacing. Sample merger and acquisition letter to employees, The role of internal communications in M&A, Employee communications: Mission-critical. Also offer reassurance where you can. A recent survey of managers conducted by the Darden Graduate School of Business explored communication practices that companies use to communicate internally during their firms' merger or acquisition. The purpose of the present study is to examine whether the use of Bishop’s (2006) ten principles of authentic communication is associated with the following employee outcomes in the context of M&A: employee satisfaction, employee commitment, and perceptions of the … 3. During a transaction, your company culture will be affected whether you want it to be or not. 6. The announcement of merging companies is usually kept private until the m&a deal is signed. A strong merger communication strategy is essential to control rumors, retain talent and boost employee morale while the merger is underway. This is a communication task. Crisp articulation of the strategic rationale forms the basis of multiple communications tailored to employees, vendors, regulators, and others. Rumors that circulate among employees can cause morale problems, loss of productivity and employee flight to competitors. Escape rooms or improv workshops help build a collaborative spirit. This doesn't mean deals aren't closing, but that they're closing and then failing to deliver the results stakeholders expect. Empower your biggest advocates by encouraging them to become mentors to new employee groups. Mergers create organizational anxiety about the future. Why survey after a merger or acquisition? But when one entity is more dominant, people may believe there are winners and losers. If you already have a solid, well-managed communication process, use it. Communicate Often and Through Several Channels. gram of realistic communications, on employees of an organization that had just announced a merger. Communicating merger to employees open and honestly is the most important thing that you can do. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. The basic problem is that companies often can’t announce these changes early in the merger-planning effort. There should also be a contingency plan in place for unexpected events. This article will take about 3 minutes to read For a company and its owners, a merger can present exciting opportunities for expansion and growth. It’s likely that a number of identified employees will be communicating this message to their direct reports, key sales accounts or large vendors, so having talking points, Q&A and targeted messages for each audience will put everyone more at ease. Pride from the “old regime” can create division and stifle learning opportunities. If you don't have certain information yet, be transparent about that as well; hearing "I don't know" is often more comforting to employees than pure speculation. To: All Employees From: Senior VP . In most courses studied at Harvard Business schools, students are provided with a case study. Remember that your employees will want to know more than the details of the merger. Case studies – Using employee feedback surveys post-acquisition You can’t keep individuals from trying to gain the upper hand. How to communicate with employees through a merger. Secondly, communicating efficiently involves sharing information with key audiences in a timely fashion. Communicate how the merger will or will not affect your employees’ career path – be available and listen to their personal concerns. Rather than leaving everyone to wonder how the reorganization will affect their relationship with the company, it’s wise to develop communication strategies that address employee concerns as well as questions from customers, suppliers and vendors. Goals, impacts, and new objectives of this transaction 5. Roadblocks you may encounter during a merger or acquisition 2. It will also turn potential office bullies into leaders and change agents. This can stall or prolong essential job training and onboarding. In an effort to prevent your best employees from leaving, share information early and often. Clear and transparent (no, these are not synonyms). In the past six years, AccentCare has doubled in size organically, and through a lot of acquisitions, going from about 12,000 employees to 25,000 employees. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. Intentional and consistent messaging can cultivate a unified company culture. This can keep your culture from coming together. Only after the news is out does management turn its attention inward, usually relying on the more traditional channels for informing employees. Whether you're buying or selling, it's important to keep your employees in the loop by communicating openly and effectively. Staying human during these times could be the difference between failure and success. In a startup, the people on the ground have helped build a successful brand from nothing. Communication during mergers and acquisitions is critical. Employee Communication During Mergers and Acquisitions provides a blueprint for your internal communication during a merger or acquisition, it contains checklists, examples and tables to help busy communication and integration teams by providing them with practical guidance and examples of what they should consider. One positive way to do this is to establish a company culture rooted in honesty and openness, which can allay employee anxiety during a potential company sale. During a major change such as a merger, employees are in need of information that will bring clarity to their specific situation. Professional employer organization services can... How do you manage to-do tasks at your company? Communication during these times is a powerful tool that can help keep your employees engaged during difficult times. Frequent communication reduces uncertainty and maintains a trusting relationship with employees. Brainstorm team building activities outside of the office. Harness a Proven Methodology to Keep Employees Engaged. Addressee Address City, State Zip. Business communication is crucial for every company’s success, and this is especially true when big changes are happening. However, being open with those involved in and impacted by the organizational change is imperative. Many employees may wonder what ... assumes responsibility for creating a plan to align the goals of the two organizations and monitor the success of the merger. The second task in mergers—adapting to changed operating models, such as new structures, processes, and governance—poses some of the most visible and difficult issues for employees. The announcement should include the following information: 1. And that is just one issue to worry about! What will you achieve in merging with this other company? • Meeting regularly with employees to communicate both organizational and managerial support • Providing employee performance management feedback on a regular basis5 Monitoring workloads One unfortunate consequence of mergers and acquisitions is that employees are often required to take on additional workloads. Wall (2005) states; the message to communicate should begin on the day the acquisition is announced and continue throughout the When two companies' philosophies and values do not match (known as culture clash), M&A deals often fail. Work by department or business unit to fill the gaps between employees, managers, and leadership. Communication should be constant and delivered in a variety of ways such as email, FAQs, meetings, a dedicated website, videos, conference calls, town hall meetings, etc. The communications team should prepare messages for target audiences, develop a timeline for announcements, and appoint or apprise company spokespeople. Consider an activity that requires problem-solving. If employees are kept in the dark or lied to, even unintentionally, many will choose to leave. These all reflect the main goal: to ensure that the right message about the merger is communicated consistently. Communicating the shared vision and goal of the transaction will help employees and other stakeholders to understand and accept the deal. When employees are focused on themselves, productivity comes to a halt. Integrate the employee communication strategy with the communication strategy for other stakeholders—customers, suppliers, government leaders and the community. management consultant believes that over-communicating in a merger or acquisition is good. Transaction effective date 3. Giving employees a voice A merger or acquisition could easily go one of two ways for employees: it might offer opportunities for growth, or it could introduce redundancies and lead to layoffs. There are many ways to discuss a deal without sharing protected or false information. Example 3: Company merger letter. When a transaction is announced, employees often speculate, and many companies become rumor mills. Know the communication goals. Proactive communication can ease concerns about job security and help retain valuable employees. Learn more. Corporate reorganizations, mergers and acquisitions affect employees, customers, suppliers and vendors. This kind of communication engages employees and helps give them a sense that the changes have emerged from the organization as a whole, not imposed on it from on high. Whatever the case, share it with your employees so they understand your goals for these changes. To be successful, you need to help your leadership team understand the impact on employees during mergers and acquisitions. The question is not if – but how – companies should manage culture to safeguard the value of an M&A deal. Below are some helpful guidelines for communicating during a merger and acquisition: Adequate communication is essential for a successful merger and acquisition: A communication plan should be developed to show employees they are respected and valued throughout the process. A common pitfall is for the acquirer to communicate to employees early in the deal that they intend a “merger of equals” so as not to upset employees in the acquired organization. Details about the companies 2. Abstract. For entrepreneurs, business owners and C-suite executives, a rise in M&A activity means they could be part of a deal in the near future. Listen to why Lindsay’s first duty is to understand the new audience, and what a good communications blend that drives business results and motivates employees looks like. 1. Furthermore Breaking The News How To Communicate A Merger To Employees Case Solution & Analysis it allows the stakeholders to see the other options if the given set of alternative does not work, thus saving the time, effort and the working from scratch, hence making it cost effective in nature. Employees are the key to a successful merger. This makes it challenging for employees to mentally prepare for change. At the same time, questions will surge and managers won't be able to fill all the gaps. If their jobs are not at stake, communicate that immediately. Employee trust is too costly to lose. The key when pulsing during a merger or acquisition is to make employee voices a critical part of the change. change management communication templates. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. Reaching employees on their own terms. The merger and acquisition process can immediately impact the stress levels of employees involved. Company Name or Letterhead Address City, State Zip. Before founding PoliteMail, I was the founder and CEO of MicroArts, which was acquired in 2001 by Cordiant Communications Group of London for $85 million. Sudden change disrupts employees from their norm and puts people on edge. Here are some common emotions and leadership approaches to begin communicating a merger to employees. Company leaders, spokespeople, public relations teams and marketing professionals should all use the same messaging. Legal regulations can make it difficult for executives to be transparent, but when management haphazardly says that "nothing will change" in an effort to keep employees motivated, trust will be damaged when things do, in fact, change. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. In June 2018, the Walt Disney Company offered to purchase most of 21st Century Fox for $71.3 billion. But oftentimes, leaders focus on items like: The majority of mergers and acquisitions fail because leaders ignore the emotional needs of their employees. Researchers have found that frequent and open communication is central to post-deal integration and value creation. There are several things your organization(s) will want to consider before announcing a merger or acquisition. 1 Too often a company will focus on communicating a merger or acquisition to such external constituencies as the media and Wall Street analysts. Typically the senior management is accountable for breaking the news, but most of the questions are going to be asked to team leaders as the employees are most likely to … If a communication gap occurs between top management and employees, the vacuum will be filled with rumours.

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