In an effort to prevent your best employees from leaving, share information early and often. If you don’t, use the merger or acquisition to build one. Communicating changes to the employees. If a communication gap occurs between top management and employees, the vacuum will be filled with rumours. 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. Don't forget to communicate early as well as more often after the deal is signed. For instance, maybe you're looking to increase your customer reach, or perhaps you want to diversify your operations. What will you achieve in merging with this other company? By listening to employees, communicating effectively, and doubling down on its unique culture and programs, LinkedIn was able to thrive, even during its acquisition. Acknowledge employees’ feelings as some may feel a genuine sense of loss. In most courses studied at Harvard Business schools, students are provided with a case study. Want help communicating this big change? Details about the companies 2. Many mergers need to be approved by local governments, attorneys … At the same time, questions will surge and managers won't be able to fill all the gaps. What is the best project management app you are using? Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. 3. It will also turn potential office bullies into leaders and change agents. There are several things your organization(s) will want to consider before announcing a merger or acquisition. Unfortunately, many mergers and acquisitions end up leading to … 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. Employees in one plant received the preview and those in another received limited information. Ask yourself: Your internal communication plan should be multi-tiered and intentional. 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. This can keep your culture from coming together. 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. Employees decode it to mean that both companies will be treated as equals so far as integration decisions are concerned. Employees are the key to a successful merger. The key when pulsing during a merger or acquisition is to make employee voices a critical part of the change. The leadership approach: Foster culture champions. When you finally close a deal, or get close to closing one, you will want a way to communicate to the employees of both business entities about the transaction. Why survey after a merger or acquisition? Mergers and acquisitions will continue to be key strategies for companies looking to grow market share. M&As can be long, complex processes. When it comes to mergers and acquisitions, don’t communicate for the sake of communication. This is a serious case of change comms. During a transaction, your company culture will be affected whether you want it to be or not. 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. Uncertainty due to poor communication will not only lead to time-wasting rumors, it will also impair employee engagement, reduce motivation and work quality, and ultimately impact the company's bottom line. This discourages speculation while helping to maintain trust during times of organizational change. Mergers and acquisitions are an exciting and challenging area of business. Sudden change disrupts employees from their norm and puts people on edge. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. merger or acquisition. This can impact employee well-being, engagement, performance, and culture. Employees are sometimes asked to alter their routine during the acquisition process: Employees spend a significant amount of their lives at work. Frequent communication reduces uncertainty and maintains a trusting relationship with employees. In this section, we list the questions to expect from different constituencies and … 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. 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 … A merger or acquisition can signal a need to refresh your resume. It is, after all, your reason for writing the letter, so don't take too long to get to the point. Do we have a timeline of milestones and updates? One of the many joys of being an Internal Communicator is the variety of our work. Professional employer organization services can... How do you manage to-do tasks at your company? Date. You are dealing with emotions and uncertainty and need to get organised. Addressee Address City, State Zip. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. If employees are kept in the dark or lied to, even unintentionally, many will choose to leave. A merger or acquisition? Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. The first thought for many employees is, "Will I still have a job when all this is over?" 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. The leadership approach: Communicate with employees. Business leaders need to focus on effective communication and improving the employee experience. For example, if their benefits are remaining the same (or improving), emphasize that fact. Communication during these times is a powerful tool that can help keep your employees engaged during difficult times. Example 3: Company merger letter. But oftentimes, leaders focus on items like: The majority of mergers and acquisitions fail because leaders ignore the emotional needs of their employees. 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. This article will help you know what to do, how to plan, how to involve employees and how to scope out a timeline. But depending on and supporting teammates impacts employee engagement. Employee morale will take less of a hit if they feel they are kept in the loop. 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. In the next section of your letter, explain the "why" behind the merger. 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 Among the factors that impact M&A performance is the quality of the communication with employees. Employees have to be persuaded to believe in the corporate vision and to act to bring it about. [Read related article: How Business Transparency Empowers Your Company]. 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. Communication challenges. When employees are focused on themselves, productivity comes to a halt. 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. Only after the news is out does management turn its attention inward, usually relying on the more traditional channels for informing employees. At a large corporation, efficiency and operations depend on the support of thousands of individuals. Goals, impacts, and new objectives of this transaction 5. 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. Agreeing to merge with or acquire another organization may benefit your company financially, but it could hurt other areas of your business, specifically your talent. Communication challenges came out as one of the top factors that caused company synergies to fail. gram of realistic communications, on employees of an organization that had just announced a merger. How to communicate a merger. A merger is a common step towards achieving long-term success, but without a strategic communication plan, that path can be fraught with disaster. Rumors that circulate among employees can cause morale problems, loss of productivity and employee flight to competitors. 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. It should add clarity, not confusion. 4. When employees understand their teammates are human they'll feel a stronger need for their support. The announcement of merging companies is usually kept private until the m&a deal is signed. And that is just one issue to worry about! If their jobs are not at stake, communicate that immediately. The announcement of merging companies is usually kept private until the m&a deal is signed. At some point in your career, you may find yourself responsible for communicating a merger. 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. 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. 1. Address these issues upfront – even the uncomfortable ones – by describing any immediate changes that will affect employees. 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. This section should immediately attempt to clear up any confusion, anxieties or rumors that have been surfacing. In a startup, the people on the ground have helped build a successful brand from nothing. In a startup, the people on the ground have helped build a successful brand from nothing. Wall (2005) states; the message to communicate should begin on the day the acquisition is announced and continue throughout the Empower your biggest advocates by encouraging them to become mentors to new employee groups. Employee trust is too costly to lose. There are a large number of distractions that can make it difficult to handle mergers successfully. Communicating with employees, empowering them and creating a culture for them to thrive are all fundamental parts to integration. Reason for the merger or acquisition 4. When two companies' philosophies and values do not match (known as culture clash), M&A deals often fail. Date. Think about what each audience needs to hear and how it would be best delivered. 3. Clear, continuous and consistent communication to the employees led to clarifying union doubts and resulted in a successful integration. This is a communication task. 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. It's now been three months since we completed the merger to form (company name). We help internal communications teams measure the effectiveness of their emails to employees. Be sensitive to the time it may take for employees to accept change post merger. Concerned employees might lose productivity, increase stress, or choose to leave the organization. Your employees are important to you. Employee survey questions to use post-merger or acquisition 4. employee attrition during a merger or acquisition. But when one entity is more dominant, people may believe there are winners and losers. 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. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” When a transaction is announced, employees often speculate, and many companies become rumor mills. Communicating the shared vision and goal of the transaction will help employees and other stakeholders to understand and accept the deal. 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. Work by department or business unit to fill the gaps between employees, managers, and leadership. It is important to spend time reviewing all of these considerations before announcing because of the importance of your transaction being successful in the long term.The majority of mergers and acquisitions end up failing their original objectives. If you already have a solid, well-managed communication process, use it. When employees part with meaningful aspects of their work, it’s easy to understand the impact on psychological health. Only after the news is out does management turn its attention inward, usually relying on the more traditional channels for informing employees. Outside of profit and market share, one desired outcome of a merger is to build a unified culture. Addressee Address City, State Zip. ", To minimize culture clash between two merging companies, work to develop a cohesive culture. Download our free change management communication templates. But when is the right time to tell employees about a pending merger? Make ambassadors out of those who hold valuable information and can help you grow the new brand. Communication Skills During your career, you might be responsible for informing your employees about a merger or acquisition. Crisp articulation of the strategic rationale forms the basis of multiple communications tailored to employees, vendors, regulators, and others. Because affected employees will eventually see through the nonsense, and you can expect lost respect and lower productivity. You need to inject accurate information throughout your workforce. As a result, pride can surface among those who are a part of the acquiring company. 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.". Ways to prepare and support your employees 5. It will outline the timeline of the merger/acquisition and provide details about both companies, including the steps for moving forward. Abstract. Most M&A financial models include a retention plan line item, ... at communicating its vision for the new combined entity and how the combination is actually beneficial to the employees through growth and/or sustained viability. This will help you create measurable touch points for employees to share their knowledge. At a large corporation, efficiency and operations depend on the support of thousands of individuals. Whether you're buying or selling, it's important to keep your employees in the loop by communicating openly and effectively. Breaking the News How to Communicate a Merger to Employees Case Study Solution & Analysis. 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. place in the post merger phase. The merger and acquisition process can immediately impact the stress levels of employees involved. 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. 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 … Staying human during these times could be the difference between failure and success. The leadership approach: Build better relationships. Company Name or Letterhead Address City, State Zip. Consider how you will manage the emotions of employees motivated by change. How a company communicates during a transaction has a direct impact on its employees' loyalty and trust. 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. Evergy has a very distributed workforce, with linemen out in the field, engineers who are always on the go, and a younger generation of new employees who want to be communicated with differently than older workers. In 2010, PWC conducted a survey on companies that had completed mergers and acquisitions. You can’t keep individuals from trying to gain the upper hand. 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. Mergers create organizational anxiety about the future. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. Communication management is in all 13 steps. 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Will you achieve in merging with this other company often lose faith in the interest of security, may!