It’s official.
Your company’s planning to undergo a merger or acquisition.
Your senior leaders are revisiting their corporate strategy and evaluating potential companies for an acquisition, or even, a merger.
From what you understand, you’re about 12 to 18 months away from the deal closing, which means you need to come up with a plan for communicating this major change to your employees.
Depending on whether your company is public or private, there will be a lot of rules around what you can and can’t communicate at different times.
What’s obvious is one thing: Your people – as well as other stakeholders – are critical to a successful integration.
And as Head of HR, it’s your responsibility to keep your employees informed and engaged throughout the merger.
This means you’ll need to start drafting your communication plan and clarifying your messaging as soon as possible.
Understanding the story
Communicating your merger or acquisition calls for more than just a press release.
And it definitely calls for more than a hasty email sent to your people on the day the deal’s announced.
When you’re communicating your merger to your team, it’s helpful to think about it as a storytelling exercise.
You need to create a strong narrative about why this merger or acquisition is happening, and that story needs to be the same across the board and over the course of the entire process.
How do you think about your merger or acquisition as a story?
First, remember that a story makes you care about a character and witness that character’s change. Think back to any movie you’ve watched.
A character starts off wanting something, a worthy goal. Then, they face obstacles on the way to obtaining them and come out victorious.
When it comes to your merger or acquisition, your company is that character.
Diversification, a larger market, or whatever the reason for the merger is would be the worthy goal.
Everything in between – negotiating the deal, getting stakeholders on board – are the obstacles that you have to overcome to get there.
Your communication plan should get your employees to root for the company, before, during, and after the merger.
To do this you need to understand the “why.”
Why is this merger or acquisition happening?
Why should employees and other stakeholders be excited about it?
Who will this merger or acquisition benefit?
To answer these questions, your HR team needs to be kept in the loop from the very early stages of the merger or acquisition.
You may not need to be an insider for all the details of the deal, but you do need to get some information about the thinking behind the deal so that you’re aligned at all times.
This means understanding the key takeaways at each stage of the merger:
- Strategy development
- Target identification
- Target refinement and evaluation
- Initial contact with targets
- Negotiations
- Due diligence
- Finalization
- Closing
- Integration
During the strategy development stage, your organization will be figuring out what it wants to get out of a merger or acquisition.
There are several motivations for pursuing a merger or acquisition, and this motivation is essential to the story you’re going to tell over the next year (as the merger or acquisition gets explored) and over the year after that (as the integration happens). Reasons for pursuing a merger include:
Creating new value
Your company knows that it could do more if it had the capabilities of other companies in the market. So the “why” behind your merger or acquisition is creating new value.
Diversification
In this case, two companies come together to expand the number of products or services they offer or to expand into new markets.
For example, a tech company that wants to start producing original content might consider it faster to acquire a production company and its intellectual property than create its own content from scratch.
Similarly, an American beverage company that wants to expand into Europe might find it faster to acquire a beverage company with brands that are already popular in Europe.
Asset acquisition
If a company wants assets that take a long time to develop on its own, such as a specialized piece of technology, then they may just acquire a company that already has it.
Access to more capital
A company may just need more capital to juice its operations, making a merger with a more flush company attractive.
Tax purposes
Sometimes, it can be more advantageous from a tax point of view for a company to merge.
Individual incentives
At times, a company may pursue a merger simply because it offers more wealth, status, and prestige for its management team (although they likely would not position it that way publicly).
Another useful way to make your employees care about the reasons for the merger is to tie it to their day-to-day work lives.
Has your sales team felt restricted by the product line you have available or the services your operations team can offer? This will make a richer, post-merger product line something that supports their sales goals.
Has your research and development team felt the strain of talent shortages? A post-merger infusion of specialized talent is something they can get excited about.
Spend some time communicating the pain points your organization is currently experiencing, and how this big change will lead to a better future for everyone involved.
Understanding the reason for the merger will help you craft a cohesive and consistent message that aligns to the story your senior leaders will be telling the media, institutional investors, activist investors, and more.
Once you know why the merger or acquisition is happening, it’s time to start thinking about why your employees should care about it or be excited about it.
One big reason your employees can be excited about a merger or acquisition is the opportunity for growth.
A bigger, stronger, or more diversified organization means more opportunities for employees to learn different skills, enjoy a range of experiences, work in different offices around the world, and advance their careers.
Of course, it’s up to your team to show that this isn’t just “marketing” but that there’s actually meat behind this statement.
Understanding the communication sequence
Most companies won’t be able to share the details of their merger or acquisition with their employees until the deal has closed.
Even so, ideally, you’ve already aligned with all the relevant stakeholders on what the messaging is, so you can map out a communication sequence or timeline.
Initial announcement
When the deal closes, you’ll send around an email to your employees announcing the merger.
When you’re writing this announcement, avoid the corporate jargon.
Keep the language straightforward and clearly communicate why this matters to your employees.
Describe the other organization that you’re joining forces with.
What are they known for?
If you’re a tech company acquiring a content creator, share the details that explain why you chose this company.
Does this content creator create top-quality podcasts on a range of topics from sports to news to entertainment?
Do they curate excellent professional development courses on topics ranging from coding to data science that you want to include on your platform?
Has this content creator won a number of awards?
Would your employees know this company as the creator of certain popular shows?
Include this in the announcement, so your employees can be excited about the merger or acquisition.
Then, explain how this merger will impact the organization.
Are there big changes they can expect in the next few days?
Or will things largely be business as usual?
Try not to take things for granted. Something your team has discussed for months may come as a surprise to your employees, so it’s worth mentioning something like the logo changing or the way the company presents itself to the world instead of springing it on your organization.
And of course, it’s important to explain what you will expect from employees.
How will their performance be measured moving forward?
And how will their roles change?
Will each department be reporting to a new individual who will introduce themselves that week?
Will job titles change?
Will the way their job performance is evaluated change?
Finally, let employees know when they will have access to more information.
You may not be able to provide everything to your employees on day one, but you can let them know that there’s a plan in place to share an FAQ, host a town hall, submit questions, and more.
The most important thing about this initial announcement is that it lays the foundation for your integration by sharing what the new organization’s shared values will be.
If you’re a private company, this is also a chance to continue from your pre-merger communications which may have involved a pre-merger survey.
This pre-merger survey would have asked your employees questions about how they felt about the coming integration, what they were excited about, what they were anxious about, and what they needed more information about.
During your initial announcement, you can include details on how you’ve turned the feedback from this pre-merger survey into action, and how you plan on continuing with these surveys throughout the integration to ensure that employees are being heard.
Day 1 post-merger communications
Now that everyone knows the merger has happened and has the high-level details thanks to the initial announcement it’s time to get into more details.
This day one post-merger communication is an opportunity to welcome your new employees, celebrate the new vision, and lay out what the game plan is for your integration.
Integration implementation
What are your key milestones going to be after the merger or acquisition?
Originally, your employees knew what the larger business strategy was and the overarching goals that filtered down to become their team and individual goals.
But now the business has changed.
So what are the new milestones, and how will the new company measure success?
During your integration implementation, you’ll need to communicate key milestones, decisions, and process changes that help you do the following four things that BCG identifies as critical to an M&A’s success:
- Keep momentum in the existing businesses
- Accelerate value creation
- Align the two cultures into one cohesive culture
- Make the company more competitive
Every organization has areas of integration that are more important than others.
For some companies, getting the IT systems aligned may be top of the list while others can kick that can down the road until they have everything ready.
Your goals and objectives may include items such as:
- Restructuring specific teams that act as value drivers for the business such as sales, research and development, and operations
- Updating the org chart
- Deciding what the new IT system, intranet, etc. will look like
- Migrating employees onto the same Human Resources Information Management System
There are countless employee and customer touchpoints that must be revisited and reimagined in the aftermath of a merger.
Your integration implementation will need to cover these areas as well as keep employees in the loop.
How can you make your merger or acquisition communications more effective
It’s up to you to make your merger or acquisition communications something your employees pay attention to.
Otherwise, key information and messaging will slip through the cracks.
Here are a few tips for developing an effective merger or acquisition communications plan.
Approach your merger or acquisition communications like a marketing campaign
The best way to think about your communication strategy is to think about it as a marketing campaign.
You’re trying to sell the new company to your employees, since there’s a big chance they may not be totally convinced that they want to work here.
In the aftermath of a merger or acquisition, you’ll be dealing with a major change that may make employees feel like they’re no longer working for the company they chose to work for.
Use the 5 Ws
When you’re crafting your merger or acquisition communications plan, it’s helpful to think of the 5 Ws, so that you hit all of your bases.
- When will we send out information about this merger or acquisition (e.g., day the deal closes, one day post-integration, two weeks into the integration, etc.)
- What will we send out to employees (e.g., emails, FAQ PDF, videos, PowerPoint slides, etc.)
- Who will we send specific pieces of information out to (e.g., should different teams have specific types of information or do we want to send the same thing to everyone
- Where will we communicate this information (e.g., will it be via the intranet? Email? Social media channels)
- Why are we communicating with employees at each stage (e.g., do we understand the objective of each piece of information we’re distributing or are we just sending out information on the fly)
Leverage your marketing department
Your marketing department does more than external communications.
They have the skills (and probably a specific employee) dedicated to internal communications as well.
Use this department to help you make your communications more effective.
They can help you come up with a slogan or tagline specifically targeted to employees, create graphics and videos that can be shared with employees, and come up with a marketing plan and communications schedule.
Be transparent and sincere
Your employees will be able to tell when you’re dancing around the truth, so be straightforward.
Speak plainly and truthfully and avoid using templates or cutting and pasting information from different documents.
If you can’t share something or you don’t have information, say that, and offer a date when more information will be available.
Your employees want to know what’s going to stay the same and what’s going to change.
When you’re reviewing your communications, draw a red line through anything that seems like an empty platitude.
Establish two-way communications
Stay in the know about how your employees feel about the entire process.
Use an M&A survey to collect employee feedback on the merger or acquisition before (if possible), during, and after the integration.
This will help you understand where the biggest pain points are, so that you can prioritize your efforts.
Recruit change champions
As you go through your implementation, you don’t want all of your communication to be top-down communications.
Find the people who are most excited about this change and are also influential within your company and make sure they have the right information to share with their colleagues.
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