How to communicate effectively to employees during mergers and acquisitions

7 Essential Steps: 

Mergers and acquisitions occur in all types of industries and affect employees throughout the organization – from the executive suite to non-desk frontline workers. 2020 was a challenging year, and we saw many mergers for various reasons. Among them were companies looking to expand into new markets, companies looking to grow bigger, and mergers focused on consolidation to reduce cost and increase operations. We also saw events where companies in struggling industries merged as a desperate move to survive. 

What all of the mergers had in common was a crucial need to communicate effectively to the workforce of these now combined companies. Studies have shown that 50 to 70% of all mergers fail or do not deliver on the results promised by the acquisition. The reason for this failure is not due to the structure or regulatory hurdles of the deal, but due to the poor integration of the two companies. This failure is most often traced to poor communication between the existing company and the new organization. 

Regardless of the industry or size of the company, the effects of a bad merger or acquisition can, and many times do, destroy the entire organization. Workforce morale and productivity at every level of the company can plummet, key employees can feel neglected or undervalued in the new order (causing turnover), and large customers can take their business elsewhere.

Integrating a workforce during a merger or acquisition can be a difficult and taxing process. To help you with the process, we have created seven tips to help managers and company executives ease the transition.

 

  1.   Have a clear communication plan in place.

 Senior leadership is often so focused on the technical side of a merger or acquisition that they forget about the communications side. When they do start to think about how to communicate the transition to the entire organization, there is no clear plan in place or the information comes too late to prevent confusion, resentment, and ultimately, a rocky transition.

Communication about the merger or acquisition is not something that leadership should make up as they go; this could lead to disaster.  A plan must be put into place with the information you plan to share. You must map out when you will share about the event and how that information will be phrased. Know your audience, and be sure to share information that is relevant and timely. Also, make sure that the plan is properly vetted by all relevant parties including lawyers, communication experts, HR, etc. before implementation.

 

  1.   Make sure that everyone is on the same page.

 Change is difficult, and going through a merger or acquisition is a major change for all involved. C-suite executives tend to adjust to the changes earlier than everyone else because they typically have been notified earlier and have access to information that isn’t shared with directors, managers, and front-line employees. This usually results in the executives having a different perception of the progress than the rest of the organization, and they may not see problems that appear obvious to many employees.

 In order to prevent this dissonance, managers should try to share relevant information with all employees as soon as it is feasible. The sooner that everyone can process the changes taking place, the more seamless the integration can take place. Consistently assessing the attitude of the organization throughout the process will allow you to adjust your communication plan if necessary.

 

  1.   Acknowledge employee needs for information.

 In a perfect world, everyone in the company would have access to the same information as everyone else, but we don’t live in a perfect world, and this isn’t realistic. 

 If and when questioned by employees, NEVER leak out confidential information, as it could threaten the entire deal and lead to your termination. But, if you cannot answer a specific question, do so without waffling, and if possible, give employees a timeframe when they will receive that information. Employee morale will be less affected if they feel they are being kept in the loop, prioritized, and valued. This is especially critical for deskless employees who work outside of the corporate office. Employees on the front lines of the business often feel like they are the last to know about company news. In many cases, some team members even find out about mergers and major events in their organizations by watching the news. 

Show your non-desk employees that you value them by sharing information with them directly, promptly, and honestly. 

 

  1.   Be honest, and provide tough information during and after integration.

 Many mergers and acquisitions end up leading to redundancies, and most managers withhold this information for too long to avoid confrontation. When managers do finally break the news, they often do it by concealing it in memos or by saying that employees will “have the opportunity to transition to new positions.”

 Be honest throughout the entire merger and acquisition process. 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 make statements like this. Employees can easily see through statements like this and they will result in lower productivity and a loss of respect.

 

  1.   It is OK to say “I don’t know.”

 You are not expected to know everything about the merger or acquisition – it is OK to admit when you aren’t certain. The right answer instead of answering with speculation is to just say “I don’t know.” Providing information is helpful, but sometimes simply providing a platform for two-way communication to facilitate questions creates a culture of transparency. Even if you can’t answer every question, don’t shy away from creating a safe space where employees can reach out to request information and quell their doubts. 

 

  1.   What you communicate nonverbally is just as important if not more so, than verbal communication.

 Many managers will close their doors and do everything to avoid having to deal with bad news. Picture this: the manufacturing plant leader who used to walk the plant floor every day and engage with every shift worker now spends 12 hours/day in his office on the computer. Employees take notice of this, and it causes a loss of trust and lowers productivity.

 Managers must remain visible; employees look to them to keep them informed. As the integration progresses, managers should regularly communicate with their teams and individuals either in person or electronically (or both), allowing employees to ask questions. This will go a long way in keeping trust and reducing the tension that is naturally created during these transitions.

 

  1.   Throughout the process (but especially post-integration), make sure people are clear about their roles and the direction moving forward.

 The merger and acquisition process often works like two new roommates who move in together. Tension often arises about who plays what role, who has access to what, and how the two will co-exist.

 While many of these issues will be resolved with leadership, it is important that every team member, whether a deskless employee (housekeeper, bartender, repair technician) or a department manager, know exactly what role they play, who they report to, and who reports to them. Provide opportunities to get employees from both companies working together, and make sure that they can hit the ground running as soon as possible.

 Remember that the process of successfully merging or acquiring companies can take anywhere from days to years. Provide frequent status updates across your entire organization and continue to let employees know their role and how they can make the process more seamless and the company more successful. 

 At the heart of every successful merger/acquisition is proper and thorough communications. This can be difficult if you lack the proper comms platform to reach all employees. 

 Red e App is the employee communication platform purposefully designed to overcome the challenges of keeping non-desk champions and their managers absolutely connected and undeniably supported. Learn more

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