Why do significant numbers of mergers and acquisitions struggle to capitalise on their investment, fail to get early buy-in from staff and fully integrate on culture and engagement from inception? Asks Jeanette Makings, Head of Financial Education Services, Close Brothers.
As is often opined, much of the failure in M&As is attributed to poor communication at the point of merger and in the initial phase of the newly-formed business. Good communication is critical during any period of significant change and in particular where the change will impact the whole workforce as is often the case in a merger. At a corporate level, mergers by their very nature occur to drive strategic opportunity. However, at individual employee level they often create significant stress and uncertainty; benefit structures are likely to change and people are concerned with job security. Under these circumstances, it is not surprising that employee motivation is affected and there is a delay in embedding Newco values and culture. A strong communication strategy is a powerful tool in overcoming these issues and can contribute to the merger realising its full potential, securing engagement and redirecting activity towards common goals. Communication is a broad topic and the choice of timing, audience, content, styling, tone of voice and delivery channel all need to be carefully considered to build an effective plan. There are added complexities in M&A situations; there are likely to be market and staff sensitivities as well as issues with critical timelines and the difficulties of managing different cultures. In recent years, the rapid growth of online and social media and their impact to blur internal and external communications presents more risks that need to be managed as a lack of control in this area may have real time consequences to the success of the merger. For many organisations, the final communication plan is likely to involve multiple channels. It is important is to deliver the key messages in ways that match an organisation’s culture and staff profile. However, in an age where online communication is becoming more prevalent, the benefit of face to face communications should not be overlooked. Incorporating such options as management meetings, Q&A sessions, one to ones and tours of different sites are extremely positive methods allowing staff and management to connect and give staff a chance to get involved.
From an individual employee’s perspective the importance of regular, clear and consistent messaging cannot be overplayed. Getting the basics right frequently and consistently is more important than irregular, over designed, and overly strategised communications. People appreciate that in a corporate action some elements cannot always be shared but they also respect the opportunity to be regularly involved and to have their questions answered. A well communicated certainty is always better received than vague and non-communicated uncertainty, no matter what the ultimate message. Employees want to know the headlines around key issues such as: The changes and the likely timeframe, reasons for change, expected opportunities/ changes in strategy/ improvements, the impact on the workforce, changes to pay, terms and benefits and details of new benefits, what support will be offered during the change and what actions/ decisions need to be taken by employees.
Employee trust can often be tested during mergers. New management, new roles, revised benefits, new goals and the fear of the unknown all play their part. The earlier management meet their new teams and colleagues can start building Newco’s future culture together, the quicker full and productive integration will begin. In addition, it can often be beneficial for an organisation to consider the services of an external provider to deliver some key messages and provide guidance to employees on benefits decisions they may need to take. An independent provider can form the bridge between Oldco and Newco and help give perspective, add the benefit of their experience and is an accepted neutral party with an unbiased view. If the external provider is a known specialist, employees often respond very positively and see this as a clear signal from management of their willingness to invest in an open communication process and to support their people with expert guidance.
Effective communications do not necessarily need a lot of time or expense, but they will benefit from insight, planning and experience. For mergers and acquisitions, excellent communications are an essential part of the process and should not be an afterthought. The ultimate success of any merger is in minimising the disruption of the transition and maximising clarity, engagement and productivity as soon as possible; communications that involve people from the outset and take them on the journey will help deliver that.