Internal Communications during Mergers & Acquisitions

There are many reasons that a merger or acquisition may be attractive for many companies. The transaction provides a strategic opportunity to grow market share, increase performance, decrease costs, or eliminate competition. For example, it is reported this week that with the acquisition of YahooVerizon hopes to grow its new media empire.

As this acquisition proceeds, these media giants must be proactive in communicating with employees using a variety of internal communications tools to influence employee discussions. At the time of the merger, there were many complex issues for managers to sort through and take action on. However, it can be argued that managing the people of each of the organizations through a strong internal communications plan is among the most important factors of the merger’s success.

Adobe Spark (2)

The Challenge

Mergers and acquisitions bring significant change to both companies involved and it is the goal of internal communications to lessen the impact to employees. It is easy for employees of both the controlling and subordinate organizations to get caught up in the uncertainty and speculation surrounding the changes. Internal communications aims to get buy-in from employees and keep productivity high throughout the process.

Public relations manager Kim Harrison wrote:

“Regardless of the brilliance of the vision and the fit in a merger, the subsequent success of the deal depends mostly on the employees. They are the ones whose day-to-day actions can make a merger work or can sink it after the deal is done. And a sufficient investment in internal communication is the link in keeping the employee attitudes positive towards the changes brought about by the merger.”

Timely Communications

It is important for merging organizations to communicate with internal stakeholders from the earliest stages of the merger. This can help pave the way for internal acceptance even before the deal is made and during the due-diligence phase completed. “One of the biggest complaints from internal communicators,” writes internal communications agency, Melcrum, “is that they’re asked to help too late, when all the important decisions have already been made.”

Consistent, frequent, and honest communication from management shares a positive and clear vision for the path forward. This has the power of shaping the internal tone for the entire process and positively influence employee discussions. Managers may not have all answers, but a free flow of information (as it becomes available) can give employees of both companies confidence in the way company leadership is handling the transaction.

In the absence of timely communication, employees will circulate rumors about pending layoffs, changes to the company culture, and discuss whether the acquisition was a good or bad idea, etc.

Mark Brenner, chairman of the Global Consulting Partnership, wrote:

“Be assured that whenever there is an information vacuum, the human species can be counted on to fill that vacuum with its own fantasies about what is ‘probably’ going on. Most employees are constantly talking about all the ‘worst-case scenarios,’ in terms of who will be retained, who will be released, and how the everyday rules of the game will change, once the dominant culture shifts into ascendancy.”

Communications Plan – Methods and Tools

At the time of the merger announcement, merging companies have a variety of internal communications tools to address changes happening within the organization. An email from the CEO, intranet articles, FAQs for managers, and corporate videos are a good start. However, providing adequate budget resources for a more comprehensive communications plan will help provide ongoing leadership through the post-merger phase.

The combined organization has the ability to create specially branded communications on a frequent basis throughout the process to keep employees fully informed of business information, such as merger / acquisition progress, direction, developments, goals, etc. Other important announcements and day-to-day communication regarding organization and business changes can be sent regularly via email.

Employee intranet serves as an important resource for employees to find an extensive library of information regarding company policies and procedures, as well as other important business information including HR (benefits), training and orientation materials, etc.

Video and training webinars help promote alignment of the two organizations, help all employees understand changes, and help employees own the corporate vision. This may include regular live-stream video of large group meetings with company leadership to assist in culture building. These open town-hall-style events give leaders an important opportunity to listen to valuable feedback from across the organization.

It is significant to note that the quality of communications, however, is more important than the quantity. “Communication shouldn’t be measured by how much is shared,” writes management consultant David Braun, “but rather how well it is shared. Employees do not need dozens of meetings or bulletins but rather honest and credible messaging… Being direct and honest with employees will ease concerns and lessen the spread of rumors.”

Listening to employees

Real communication is two-way, and includes a critical listening component. Company leadership will have many seemingly important roles during the merger, but being fully committed to listening to employees will be of greatest importance.

Through a strong commitment to internal communications throughout the acquisition process, company leaders can engage employees and create a strong, united culture.



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