There are a large number of distractions that can make it difficult to handle mergers successfully. Date. Intentional and consistent messaging can cultivate a unified company culture. When it comes to mergers and acquisitions, don’t communicate for the sake of communication. 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. 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 … After a merger, HR leaders are often tasked with developing an internal communication strategy. In the past six years, AccentCare has doubled in size organically, and through a lot of acquisitions, going from about 12,000 employees to 25,000 employees. Sammi Caramela contributed to the reporting and writing in this article. How to communicate a merger. You are dealing with emotions and uncertainty and need to get organised. What will you achieve in merging with this other company? Only after the news is out does management turn its attention inward, usually relying on the more traditional channels for informing employees. That same month, AT&T acquired Time Warner for $85 billion. Proactive communication can ease concerns about job security and help retain valuable employees. Sample merger and acquisition letter to employees, The role of internal communications in M&A, Employee communications: Mission-critical. Communicating with employees, empowering them and creating a culture for them to thrive are all fundamental parts to integration. The Best Employee Scheduling Software of 2021. Make a note at the end of the letter directing your employees to your HR person or department should they have additional questions or concerns. place in the post merger phase. • Meeting regularly with employees to communicate both organizational and managerial support • Providing employee performance management feedback on a regular basis5 Monitoring workloads One unfortunate consequence of mergers and acquisitions is that employees are often required to take on additional workloads. Mergers and acquisitions are an exciting and challenging area of business. change management communication templates. 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. Roadblocks you may encounter during a merger or acquisition 2. Company Name or Letterhead Address City, State Zip. Researchers have found that frequent and open communication is central to post-deal integration and value creation. Clear and transparent (no, these are not synonyms). Communication during these times is a powerful tool that can help keep your employees engaged during difficult times. Communication challenges. Why survey after a merger or acquisition? The change of scenery can decrease anxiety and increase humility. Download our free change management communication templates. A good communication plan should be established before the deal is finalized, and carried on throughout the process. 3. In a startup, the people on the ground have helped build a successful brand from nothing. Communicate Often and Through Several Channels. It will outline the timeline of the merger/acquisition and provide details about both companies, including the steps for moving forward. It’s likely that a number of identified employees will be communicating this message to their direct reports, key sales accounts or large vendors, so having talking points, Q&A and targeted messages for each audience will put everyone more at ease. But when is the right time to tell employees about a pending merger? 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. Escape rooms or improv workshops help build a collaborative spirit. 2. Crisp articulation of the strategic rationale forms the basis of multiple communications tailored to employees, vendors, regulators, and others. ", To minimize culture clash between two merging companies, work to develop a cohesive culture. In the next section of your letter, explain the "why" behind the merger. Pride from the “old regime” can create division and stifle learning opportunities. Naturally, your employees' first question will be whether they still have their jobs and how their roles will change. At a large corporation, efficiency and operations depend on the support of thousands of individuals. The communications team should prepare messages for target audiences, develop a timeline for announcements, and appoint or apprise company spokespeople. 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. Employees are sometimes asked to alter their routine during the acquisition process: Employees spend a significant amount of their lives at work. Why survey after a merger or acquisition? In most courses studied at Harvard Business schools, students are provided with a case study. Communication during mergers and acquisitions is critical. This makes it challenging for employees to mentally prepare for change. 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. Here are some common emotions and leadership approaches to begin communicating a merger to employees. It should add clarity, not confusion. These all reflect the main goal: to ensure that the right message about the merger is communicated consistently. Including an employee survey in your post-M&A plan is another way to keep the lines of communication open, and demonstrate to people that their feedback is important. 1 Too often a company will focus on communicating a merger or acquisition to such external constituencies as the media and Wall Street analysts. 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. As frequently mentioned by researchers and practitioners, many mergers and acquisitions (M&A) fail to achieve their expected results. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” Mobile Wallet Guide: Google Pay vs. Apple Pay vs.... You no longer need to carry a bulky wallet filled with numerous... How to Prepare for a Change of Leadership. Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. There should also be a contingency plan in place for unexpected events. However, being open with those involved in and impacted by the organizational change is imperative. Too often a company will focus on communicating a merger or acquisition to such external constituencies as the media and Wall Street analysts. We help internal communications teams measure the effectiveness of their emails to employees. Empathy for employee needs breeds the help you need to manage change. Reaching employees on their own terms. If you don’t, use the merger or acquisition to build one. M&As can be long, complex processes. In 2010, PWC conducted a survey on companies that had completed mergers and acquisitions. But oftentimes, leaders focus on items like: The majority of mergers and acquisitions fail because leaders ignore the emotional needs of their employees. Work by department or business unit to fill the gaps between employees, managers, and leadership. Integrate the employee communication strategy with the communication strategy for other stakeholders—customers, suppliers, government leaders and the community. Frequent communication reduces uncertainty and maintains a trusting relationship with employees. gram of realistic communications, on employees of an organization that had just announced a merger. Think about what each audience needs to hear and how it would be best delivered. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. A strong merger communication strategy is essential to control rumors, retain talent and boost employee morale while the merger is underway. 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. Employees decode it to mean that both companies will be treated as equals so far as integration decisions are concerned. When a transaction is announced, employees often speculate, and many companies become rumor mills. Business communication is crucial for every company’s success, and this is especially true when big changes are happening. 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. Your employees are important to you. When executive teams fail to acknowledge change, it can be difficult for HR to align and engage employees. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. But when one entity is more dominant, people may believe there are winners and losers. When employees part with meaningful aspects of their work, it’s easy to understand the impact on psychological health. Change can breed gossip, uncertainty, fear, and disengagement. Mergers create organizational anxiety about the future. 3. 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. To: All Employees From: Senior VP . When inconsistencies exist between what a company says and how it acts, employees often lose faith in the organization. Rumors that circulate among employees can cause morale problems, loss of productivity and employee flight to competitors. Case studies – Using employee feedback surveys post-acquisition 1. A well-crafted communication plan can help reduce employee anxiety and cynicism, protect the acquirer's credibility, and prevent top management from being accused of reneging on its promises. A merger or acquisition can signal a need to refresh your resume. Consider an activity that requires problem-solving. The first thought for many employees is, "Will I still have a job when all this is over?" Communicating changes to the employees Business communication is crucial for every company’s success, and this is especially true when big changes are happening. Communicating merger to employees open and honestly is the most important thing that you can do. The merger and acquisition process can immediately impact the stress levels of employees involved. In this section, we list the questions to expect from different constituencies and … I'm the founder and managing partner of PoliteMail, a provider of email measurement and analytics software for Microsoft Outlook and Exchange. How a company communicates during a transaction has a direct impact on its employees' loyalty and trust. Your communications teams should create a strategic plan to convey the values and vision of the newly joined organization. But depending on and supporting teammates impacts employee engagement. The SBA and USDA offer loans to assist entrepreneurs and business... Walt Disney Company offered to purchase most of 21st Century Fox, Tianjin Tianhai's acquisition of Ingram Micro, Merger of US Airways and American Airlines, How Business Transparency Empowers Your Company, The Secrets to Building a Winning Team Culture for Your Business. The announcement should include the following information: 1. Many mergers need to be approved by local governments, attorneys … Your merger and acquisition letter to your staff should include the following (in this order): The first part of your letter should be the announcement of the merger/acquisition. Professional employer organization services can... How do you manage to-do tasks at your company? Employee loyalty and trust are at stake. Consistency is key to unifying a company. [Read related article: The Secrets to Building a Winning Team Culture for Your Business]. 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 … Harness a Proven Methodology to Keep Employees Engaged. Know the communication goals. 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. 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. Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. Date. Among the factors that impact M&A performance is the quality of the communication with employees. Whatever the case, share it with your employees so they understand your goals for these changes. Ask middle managers to nominate their employees to become ambassadors for change. How should we communicate the purpose of this change. Leverage frequent communications and continuous listening strategy to address new questions or concerns. should focus on areas of particular concern to employees during mergers and acquisitions, such as layoffs and changes in pensions, work rules, and com-pensation (Ivancevich et al., 1987). Because affected employees will eventually see through the nonsense, and you can expect lost respect and lower productivity. Your employees are important to you. 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. Celebrate your accomplishments and history. Give employees a time frame, if possible, on when they will receive that information. Communicating transparently during a merger or acquisition can be challenging at times, as often details of the transaction cannot be widely shared before everything is made official. Acknowledge employees’ feelings as some may feel a genuine sense of loss. 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. If their jobs are not at stake, communicate that immediately. This can create a flood of questions including: Employees crave stability. 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. Corporate reorganizations, mergers and acquisitions affect employees, customers, suppliers and vendors. Be sensitive to the time it may take for employees to accept change post merger. And egos can get in the way of onboarding new hires which can prevent successful and essential team dynamics. If employees are kept in the dark or lied to, even unintentionally, many will choose to leave. Communication should be constant and delivered in a variety of ways such as email, FAQs, meetings, a dedicated website, videos, conference calls, town hall meetings, etc. How can I improve the productivity of workers? You want them to feel heard and valued, not left in the dark. Ask yourself: Your internal communication plan should be multi-tiered and intentional. Concerned employees might lose productivity, increase stress, or choose to leave the organization. Whether you're buying or selling, it's important to keep your employees in the loop by communicating openly and effectively. Write clearly and openly about how the merger will affect their day-to-day operations. Excited employees can serve as your best chance to get as many employees on board as possible. 4. The leadership approach: Build better relationships. In an effort to prevent your best employees from leaving, share information early and often. During a transaction, your company culture will be affected whether you want it to be or not. When it comes time sell your company, one of the toughest issues is communicating the process to employees. 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.". It's now been three months since we completed the merger to form (company name). Want help communicating this big change? At Bank PHB rich communication to all employees of the new direction of the bank took . The question is not if – but how – companies should manage culture to safeguard the value of an M&A deal. Mass talent departure is one of the reasons M&A deals fail post-acquisition. (4) Provide the tough information during and after integration. According to Deloitte, "culture is inextricably linked to performance, especially in an M&A context. 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