Effective employee communications during mergers and acquisitions

After spending some time in the doldrums, the mergers and acquisitions market is once again on a hot streak. 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. Experts indicate that this activity is expected to continue rising during 2015.

7 tips for a successful M&A integration

Why do half of all mergers and acquisitions fail?

And how can they be more successful?

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. Yet research has consistently indicated that mergers rarely fail due to the structure or regulatory hurdles of the deal.

Rather, they fail due to poor integration of the two companies, and often that comes down to shoddy communication within both the existing and new organization.

No matter the size and scope of the companies involved, the effects of a bad merger or acquisition can literally destroy an entire organization. Key employees could feel on the outs and leave, workforce morale and productivity could plummet, and big customers could take business elsewhere.

Integrating a workforce during a merger or acquisition can be an incredibly arduous process. We’ve compiled seven tips for managers and executives to help ease the M&A transition:

(1) Have a clear plan in place

Oftentimes, senior leadership is so focused on the technical aspects of the deal that they forget the communications side. If and when they do begin thinking about how to communicate the transition to the rest of the organization, they don’t have a clear plan in place and/or the information from leadership comes too late to mitigate resentment, confusion and an overall seamless transition.

Winging it will more than likely lead to disaster – a plan must be put into place. 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. Make sure that plan is properly vetted by relevant parties (lawyers, communications experts, etc.) before implementation.

(2) As much as possible, make sure that everyone is on the same page

Change is difficult. Even for those who handle it well, it takes time to get adjusted to major ones. In terms of mergers and acquisitions, C-Suite executives often adjust to the changes earlier than everyone else because they had access to information that isn’t shared with rank-and-file employees. As a result, the executive may have a different perception of progress than the rest of the organization, and may be susceptible to turning a blind eye to problems.

In order to mitigate this dissonance, managers should try to provide all relevant information to employees once feasible. The sooner that everyone can process the change, the more seamless the integration can take place. Be sure to consistently assess the attitude in the organization and re-evaluate your communication plan if necessary.

(3) Acknowledge regulatory hurdles

Although in a perfect world, everyone in the organization would have the same information as everyone else, this of course isn’t realistic. 

Of course, NEVER leak out confidential information, as it could threaten the entire deal. But if you can’t answer specific questions do so without waffling. Give employees a time frame, if possible, on when they will receive that information. Employee morale will take less of a hit if they feel they are kept in the loop.

(4) Provide the tough information during and after integration

Unfortunately, many mergers and acquisitions end up leading to redundancies. However, given most humans are programmed to avoid confrontation, managers often withhold this information for far too long. When managers do break the news, they often do it through concealing it in memos or saying employees will “have the opportunity to transition to new careers.”

Don’t mince words and remain honest throughout the entire 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 say that. Because affected employees will eventually see through the nonsense, and you can expect lost respect and lower productivity.

(5) It’s OK to say “I don’t know”

You don’t need to know every nugget of information – it is OK to indicate when you are uncertain. 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. Remember that any false information you give out will almost certainly come to light and then bite you in the behind.

(6) Nonverbal communication is just as, if not more important, than verbal communication

Some managers will do everything to avoid having to deal with bad news. If you decided to hunker down in your office and close the door during the transformation, expect employees to take notice. Then expect lower productivity and loss of trust. 

Instead, your employees count on you to remain visible. As the integration progresses, managers of large organizations should consider holding town hall meetings either in person or electronically (or both), allowing employees to ask questions directly to management. This can go a long way in keeping trust and breaking the tension that naturally occurs during these transitions.

(7) Post-integration, make sure people are completely clear on their roles and the direction moving forward

The M&A process often works like two new roommates who move in together. Conflict will often arise about who plays what role, who has access to what and how the two will co-exist. 

It falls upon management to sort these issues out. Make sure employees 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, the process of successfully merging or acquiring companies, depending on factors such as cultures and size, can take anywhere from days to years. Always provide constant status updates to employees, and continue to let them know their role and how they can make the process more seamless.

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. 

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