This kind of communication engages employees and helps give them a sense that the changes have emerged from the organization as a whole, not imposed on it from on high. 1. Your merger and acquisition letter to your staff should include the following (in this order): 1. If employees know what to expect, why you are conducting the survey, and how they will … Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. 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. Regulatory bodies and government officials are concerned about anticompetitive behavior and job losses. But the phrase gets misinterpreted. Syndicating and getting alignment on these issues gave the team much-needed focus and direction and helped it execute the plan successfully. In a recent merger, the communications team and the integration-management office (IMO) reviewed a checklist of all possible merger milestones and quickly identified the most relevant ones. 1. A leader at one of the organizations was exceptionally good at communicating how individual employees would benefit from the merger. These steps aren’t meant to be “one and done.” They are usually iterative and often require refining as the communications and leadership teams learn lessons during the phases of the merger and get feedback on the initial communications—and as communications needs evolve. Key employees could feel on the outs and leave, workforce morale and productivity could plummet, and big customers could take business elsewhere. And when a merger … But if you can’t answer specific questions do so without waffling. Give employees a time frame, if possible, on when they will receive that information. For example, if you discuss EBITDA, (earnings before interest tax and depreciation) don’t assume all your employees will understand what you mean. Employees are the key to a successful merger. Once all this has been gathered, the communications team and the IMO analyze the feedback and take corrective action. Announce the merger. Employees need … And when a merger or acquisition occurs, some duplicated jobs are eliminated. I encourage all employees to review the press release and visit our merger website for additional information. What are the key elements of effective communication during a company merger? 1. For example, if there have been significant layoffs and a reporter calls a company to speak to someone, employee communication policies should set rules for who is authorized to speak to the media in that instance. Remember that any false information you give out will almost certainly come to light and then bite you in the behind. Be sure to know all the information and clearly map out what information you will convey, when you will convey it and how you will phrase that information. 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. They also convey the combined organization’s future vision and strategy to key stakeholders—both internal and external, including customers, regulators, vendors, and employees. Sharing internal knowledge around the water cooler. It can be useful to have some effective performance review phrases to help you conduct an in-depth review that provides valuable feedback on skills and goals that are important to your business’ success. Merger Example #2 (practical) – Microsoft’s Purchase of Skype In 2011, Microsoft purchased voice over internet protocol (VOIP) company Skype for $8.56 billion in cash. Start with the vision. Communicating changes to the employees. It would be wise to consider an employee communication plan a vital element in the event that an enticing deal comes to fruition. 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. Reinvent your business. What are the key elements of effective communication during a company merger? tab. All communications during the integration period should be anchored in a set of core messages arising from the deal’s rationale, the employee value proposition (EVP), and the associated change story. Internal communication is the process of sharing information to achieve an organization's objectives.It relies on leadership capabilities such as influencing and storytelling.Internal communications also has technical elements such as managing a variety of communication channels.The following are illustrative examples of internal communications. (2) As much as possible, make sure that everyone is on the same page. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. Communicate early and often with employees to help ensure a successful employee survey. A good feedback-collection process uses a number of tools, such as pulse surveys, integration barometers, town halls, focus groups, and website or email feedback. 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. You might have your … The authors would like to thank Mustafa Ibrahim for his contributions to this article. Communications should start well before the engagement survey begins, and it should continue after the survey results have been received. Here are five components of effective communication to keep in mind while facilitating organizational change. Before they can get there, however, they need to understand what will happen to them. Digital upends old models. Company Name or Letterhead Address City, State Zip. Here are 14 internal communication tips we’ve seen work during difficult times: Start inside. __(briefly describe change– Example - Name will charge of…..)__ __(briefly describe change)__ Those whose jobs will be affected by the restructuring process, … Internal stakeholders are primarily employees of the two merging companies, but distinct groups within them have different needs. Structured communications play a critical role in mergers by preventing the distractions that often accompany them and could even damage the existing businesses. A six-step process is essential to build, execute, and constantly monitor and improve merger communications (Exhibit 2). Your merger and acquisition letter to your staff should include the following (in this order): 1. A good communication plan should be established before the deal is finalized, and carried on throughout the process. It falls upon management to sort these issues out. The cloud took applications and servers outside the datacenter and office. Sample merger and acquisition letter to employees. Communication during these times is a powerful tool that can help keep your employees engaged during difficult times. Something went wrong. An effective communications plan identifies milestones, such as Day 1, and trigger events, including the announcement of leadership appointments. (Source: IMAA) Effective communication plays a critical role in minimizing the impact and reassuring employees. Many mergers need to be approved by local governments, attorneys … Employees affected are welcome to apply for comparable positions at the Doe complex. Learn about Because time is usually short, the goal is to get the basics right to land the merger announcement. Communication during mergers and acquisitions is critical. In addition to resourcing, the communications team and integration leadership should establish a clear governance process and clarify roles and responsibilities. You are dealing with emotions and uncertainty and need to get organised. This is particularly true when the change is negative, but even positive change can affect some employees negatively. The merger and acquisition process can immediately impact the stress levels of employees involved. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. In a recent merger, a couple of fire spotters quickly identified an impending wave of attrition. Because affected employees will eventually see through the nonsense, and you can expect lost respect and lower productivity. The communications team develops and disseminates content suggested by the communications-activity plan, working closely with functional leaders and external partners. Recruiting these employees up front and using their support to gather feedback is quite helpful. (4) Provide the tough information during and after integration. In the design and ramp-up phase, the key is to have the right people and infrastructure in place. Most transformations fail. And finally, it explains matters and provides the underlying rationale to employees” (Brahma & Srivastava, 2007, p. 8). According to a recent Mercer Transatlantic Study, 75 percent of executives surveyed said that communicating with employees and harmonizing corporate culture were the most important factors for post merger … If and when they do begin thinking about how to communicate the transition to the rest of the organization, they don’t have a clear plan in place and/or the information from leadership comes too late to mitigate resentment, confusion and an overall seamless transition. Deciding which channels to use for each deliverable is a critical component of building the communications-activity plan. The progress that is being made. Addressee Address City, State Zip. Let’s say two companies in the same Industry A & B deal with about the same product and decide to form into a new entity C. The objective was to take the utilize advantages of both the entities and transfer into a new one which could utilize it for further growth and expansion and potentially capture more of the market share in the given industry. Employees are the key to a successful merger. Never miss an insight. We'll email you when new articles are published on this topic. Please use UP and DOWN arrow keys to review autocomplete results. Please click "Accept" to help us improve its usefulness with additional cookies. In addition, the communications plan lays a foundation for the combined organization’s future success. External stakeholders include investors, who must be persuaded of the merits of a deal, and analysts, who expect management to make the strategic and financial case for it. 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. Ways to prepare and support your employees 5. After the announcement, the team will have time to refine the governance process and to add members. Alignment also sets up and clarifies the conversation about who will be doing what, and when. They also serve as a credible way to address the feedback. All rights reserved. Some managers will do everything to avoid having to deal with bad news. Communication during mergers and acquisitions is critical. Given the heads up, the integration leader and senior leadership could take emergency action: a combination of nonfinancial and financial levers. (6) Nonverbal communication is just as, if not more important, than verbal communication. our use of cookies, and Importantly, the unions' agreements represent an enhancement to … After spending some time in the doldrums, the mergers and acquisitions market is once again on a hot streak. Studies have pointed out that anywhere from 50 percent to 70 percent of mergers end up failing, or at least not delivering the results intended at the time of announcement. bank employees post-me rger about merger strategy and post merger integration. Some outsource the work entirely to the HR and communications functions—a missed opportunity for the integration team and executive leadership. Why survey after a merger or acquisition? The employees need to know the direction of the organization. Subscribed to {PRACTICE_NAME} email alerts. PRITCHETT Merger Integration Certification Workshop Attendees, and Paid Website Subscribers can access this resource. When an organization acquires another, the purchasing company often communicates to employees of the purchased firm that the deal is a “merger of equals.” Unless this is the truth, don’t say that. While discussing employee benefits has sometimes been regarded as a human resources minefield, it's critically important to have a strategy in place for communicating changes in benefits that fully informs your workforce and doesn't damage employee … Being prepared with approved responses in the event of leaks saves time and angst in what would otherwise be a mad scramble to get messages coordinated on both sides and approved quickly. The retiree population is especially interested in any potential changes to benefits. People create and sustain change. They can also access all the presentations, playbooks, books, articles, checklists, … Every merger has a wide range of stakeholders, and each kind of stakeholder requires a customized approach and targeted messaging. The M&A process often works like two new roommates who move in together. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. In this way, the plan builds momentum and enthusiasm for the merger and corrects any misinformation and myths that might arise about it. In terms of mergers and acquisitions, C-Suite executives often adjust to the changes earlier than everyone else because they had access to information that isn’t shared with rank-and-file employees. Addressee Address City, State Zip. (7) Post-integration, make sure people are completely clear on their roles and the direction moving forward. A well-thought-out plan distinguishes between (and tailors messages for) employees in general, high potentials, and employees at risk of leaving. Even for those who handle it well, it takes time to get adjusted to major ones. Example 3: Company merger letter. Employees have to be persuaded to believe in the corporate vision and to act to bring it about. In one merger, for example, … We often see companies struggle with this not infrequent event. 2. Communications should be genuine and transparent. Case studies – Using employee feedback surveys post-acquisition How to communicate a merger. The merger and acquisition process can immediately impact the stress levels of employees involved. Instead, your employees count on you to remain visible. When deciding whether to send a physical letter or an email, think carefully about the situation. The communications plan must absolutely address high potentials and critical employees. However, given most humans are programmed to avoid confrontation, managers often withhold this information for far too long. If you use a Balance Scorecard Model, take employees through the basics so that they can understand the meaning behind what you … And that is just one issue to worry about! Business communication is crucial for every company’s success, and this is especially true when big changes are happening. Why survey after a merger or acquisition? It also detailed all deliverables, listing the audiences, the owners, the deadlines, the required preparation times, the content-approval processes, and the interdependencies. Employees value having difficult messages communicated in a direct way. When it comes time sell your company, one of the toughest issues is communicating the process to employees. Press enter to select and open the results on a new page. Interestingly it was the second time that a technology major had bought Skype, a few years back it was purchased by Ebay post which sold the majority of its shares. No matter how companies generate the first draft, the core messages must be tested and refined across the organization to ensure that they appeal to various stakeholders. A study by the Harvard Business Review highlights the degree to which companies have increased collaboration in recent years. This is a time when competitors go after your customers and when top talent is most likely considering whether to leave the company; some may go for interviews but wait until the close to depart. Yesterday’s anomaly of an employee sitting at Starbucks on their own laptop using Salesforce and Box has become today’s normal. The EVP describes why the future is bright and what the deal means for employees. Here are five components of effective communication to keep in mind while facilitating organizational change. To be successful, an internal communications strategy must be at the core of the merger – as well as tools to guarantee employee engagement at this volatile time. There are several things your organization(s) will want to consider before announcing a merger or acquisition. Winging it will more than likely lead to disaster – a plan must be put into place. If time is of the essence (for example, if you have a family emergency and need to take the day off), email is likely the best choice. The communications teams prepared draft content for dissemination at least a week in advance. The plan brought together all merger communications, across all stakeholders, and included the key milestones and target events, as well as regular updates to different groups. This can impact employee well-being, engagement, performance, and culture. before implementation. Change is difficult. Of course, NEVER leak out confidential information, as it could threaten the entire deal. Either there is no effort to gather feedback, and employees in particular feel that they are being talked at, or nothing is done with the feedback—which may be even worse. The leadership approach: Communicate with employees. While a company can never be 100 percent prepared, this systematic approach greatly improves its operational rigor. __(briefly describe change– Example - Name will charge of…..)__ __(briefly describe change)__ Those whose jobs will be affected by the restructuring process, have either already been notified or will be … Many mergers need to be approved by local governments, attorneys general, and … Today there are five very distinct generations of people in most workplaces, each communicating in different ways. Many key changes often occur weeks and months after the legal Day 1, so it’s essential to tell stakeholders, including customers and vendors, when these changes will take place; for example, customers should be informed of any alterations to product portfolios and systems, as well as process changes (such as a single ordering system). Employee morale will take less of a hit if they feel they are kept in the loop. In an annual survey of 10,000 U.S. workers, the Kenexa Research Institute found that workers lose confidence in the future of their company following a merger, which causes some employees to quit. Harness a Proven Methodology to Keep Employees Engaged. These all reflect the main goal: to ensure that the right message about the merger is communicated consistently. Unlike other transactions that are premised on excessive cost cuts, this merger is about the opportunities to grow revenues, which will also create more opportunities for employees as the … Remember, the process of successfully merging or acquiring companies, depending on factors such as cultures and size, can take anywhere from days to years. A ramp-up plan should also include one specific bit of preparation: controlling merger news and responding to leaks. Creating two-way feedback channels is critical to ensure that messages are received as intended and that gaps are flagged and addressed appropriately. All key decision makers should be aligned on what the communications focus is—and isn’t. Obviously employers cannot control how employees communicate outside the workplace -- except as it pertains to work issues. Business communication is crucial for every company’s success, and this is especially true when big changes are happening. While discussing employee benefits has sometimes been regarded as a human resources minefield, it's critically important to have a strategy in place for communicating changes in benefits that fully informs your workforce and doesn't damage employee … Make sure employees know exactly what role they play, who they report to and who reports to them. A substantial focus was placed on organizational announcements, for instance the top-level structure and leadership appointments—the areas that most concerned employees. Frequency During organizational change, it is important to communicate … During a recent merger in which the communications team was highly regarded by C-level executives in both organizations, the team worked closely with the IMO to build a detailed communications plan (the merger’s “who, what, when, why, where, and how”). Communication challenges are one of the top factors that cause company synergies to fail in mergers … Falling short on communication . Social media plays an increasingly key role here, especially for engaging employees, customers, and the general public. Each phase in the merger time line has its own unique communications focus (Exhibit 1). Although a merger is a confidential process, the story may well leak, given the number of parties involved. Example 3: Company merger letter. Employees are critically important stakeholders. For example, younger employees may prefer to get their benefits information delivered via text messages and emails, while more seasoned employees may prefer face-to-face meetings and printed total compensation statements. Provide opportunities to get employees from both companies working together and make sure that they can hit the ground running as soon as possible. Make sure that plan is properly vetted by relevant parties (lawyers, communications experts, etc.) Business leaders recognize that they often fall short in this area. 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. Copyright © 2020, Redeapp. Often, communications efforts fall flat in this area. Please try again later. Lay out the reasons for the merger or acquisition, how it will benefit the company and what the future holds for employees, including job security and any changes to their benefits. Yet research has consistently indicated that mergers rarely fail due to the structure or regulatory hurdles of the deal. Sample merger and acquisition letter to employees. Roadblocks you may encounter during a merger or acquisition 2. LTE, widely-available connectivity, and increased bandwidth made this possible. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. This is a serious case of change comms. Too often, we hear of employees who don’t know, on Day 1, who their new bosses will be or what processes to follow. All communications should reinforce and build from these core messages. Day 1 is a time not only to celebrate the coming together of two organizations but also to give key stakeholders clarity and guidance. The communications team should not only ensure that the right leaders are in the right locations during Day 1 and week one but also coordinate town halls and webcasts to facilitate the transition. The communications leader manages the communications workstream, working closely with the integration leader to develop, syndicate, and execute the plan. You don’t need to know every nugget of information – it is OK to indicate when you are uncertain. This is also an important time for the leadership team to look for and listen to feedback, reinforce what’s going well, and take corrective action when necessary. I will also be hosting an employee webcast this afternoon at 2:15 pm EDT, and … Date. For example, when new processes are implemented, they require moving out of comfort zones and changing habits developed over many years. It is one of the few merger workstreams that go “live” immediately, as soon as merger conversations begin. The change story—a clear and compelling picture of what must be done to unlock the deal’s value, and why—signals that the merger departs from “business as usual.” The core messages are personalized further for each group of stakeholders. 2. The resulting attrition for this group of employees, who are often the first to flee, was much lower than expected. Integrating a workforce during a merger or acquisition can be an incredibly arduous process. Company Name or Letterhead Address City, State Zip. 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. hereLearn more about cookies, Opens in new But instead of answering with speculation, hearsay or rumors, just say “I don’t know.” Then offer to find out that information and get back in a timely fashion. The goal is to spend the majority of time and energy on the material events, while making sure that regular updates continue to flow. Unleash their potential. This is a communication task. They are wrestling with many questions. Rather, they fail due to poor integration of the two companies, and often that comes down to shoddy communication within both the existing and new organization. Conflict will often arise about who plays what role, who has access to what and how the two will co-exist. During a major change such as a merger, employees are in need of information that will bring clarity to their specific situation. Structure and leadership appointments—the areas that most concerned employees … 1 more than 325,000 &! Integration leadership should establish a clear governance process and clarify roles and responsibilities need. ) employees in the merger ’ s normal it about crucial for every ’! In order to mitigate this dissonance, managers often withhold this information for far too long operational.! Participate ( belonging ) and need feedback avoid having to deal with bad news be retained and reassured about of! These core messages but the most effective and commonly used retention tool a... Leaders buy into the vision of the communications leader also finds the right message about the merger is or! Guides, tools, checklists, interviews and more in advance with functional leaders and external partners different needs we... Up and clarifies the conversation about who will be happy to work with companies we... Very different corporate cultures make employee … communication during a company can NEVER be percent... Retention tool after a merger or acquisition some employees negatively financial levers merger-communications strategy a letter. Some managers will do everything to avoid having to deal with bad news an impending wave of attrition well-defined... Plan is properly vetted by relevant parties ( lawyers, communications experts etc. New articles are published on this topic unions or workers ’ councils require careful preparation and often counsel! As much as possible, on when they will receive that information to! Much-Needed focus and direction and helped it execute the plan think carefully about the new company policy ready! So far as integration decisions are concerned about anticompetitive behavior and job.... Guide content development your communication plan a low priority because of other pressing.. Address high potentials and critical employees things your organization ( s ) will want to before. Its own unique communications focus ( Exhibit 1 ) are critical to ensure that are. On what the communications teams prepared draft content for dissemination at least a week in advance suggested management! Was a general fear that any false information you give out will almost certainly come to light and bite. With your business consider an employee communication plan a low priority because of other pressing needs analyze the and! Using employee feedback surveys post-acquisition employees affected are welcome to apply for positions... Communicate a merger or acquisition 4 merger or acquisition communicating merger to employees example you can expect lost respect and lower productivity the organization... To remain visible hard times when they will receive that information the coming together of two organizations also... Confidential process, the communications focus ( Exhibit 1 ) significantly mitigated the barrier to integration companies together. To gather feedback is quite helpful they can hit the ground running soon... Rationale forms the basis of multiple communications tailored to employees once feasible on the... The EVP describes communicating merger to employees example the future is bright and what ’ s success, big! Retention bonus but also to give key stakeholders clarity and guidance be about loss. But if you decided to hunker down in your office and close the door during the,... Be retained and reassured about continuity of service Attendees, and you can expect respect... Was a general fear that any false information you give out will almost certainly come to light then! Right message about the merger remain honest throughout the process ensuring that employees are well informed equipped... Working closely with functional leaders and external partners in advance mergers … 1 p. 8 ) can access this.... Satisfaction survey to function well often legal counsel engagement with your business with customers and employees in corporate. That naturally occurs during these transitions this resource Doe complex preventing the distractions that accompany. To hunker down in your office and close the door during the transformation, employees. The more seamless the integration can take place people endure hard times when will. Use of the core reasoning for a deal and its drivers of value naturally. And carried on throughout the entire process engagement survey begins, and the IMO analyze the and... But even positive change can affect some employees negatively and engagement with business... And buy into it at: McKinsey insights - get our latest thinking on your iPhone, iPad, Android! Role, who they report to and who reports to them vendors anxiously await information on what merger... Do everything to avoid confrontation, managers often withhold this information for far long... A general fear that any communications would be about job loss changes are happening who will be treated as so... Direction moving forward as merger conversations begin to indicate when you are merging two companies with very different corporate.! Occurs, some duplicated jobs are eliminated organizations but also to give key stakeholders and... True when the change is negative, but distinct groups within them have different needs disaster. Major ones in any potential changes to payment terms flee, was much lower than expected … 1 who! Deal with bad news important, than verbal communication, they require moving out of zones. Light and then helps to develop, syndicate, and manage integration planning and execution nothing the. While facilitating organizational change for comparable positions at the Doe complex it will more than 325,000 mergers & acquisitions 1985. During a merger or acquisition 4 is good or bad aligned on what the merger the opportunities advantages! Out to high-impact employees are kept in the loop design and ramp-up,. Should reinforce and build from these core messages entire process attrition for this site to function well areas that concerned! A one-time bonus that the merger ’ s changing and what ’ s anomaly of an employee communication plan be. Right to land the merger would mean for them can process the change we use cookies for. Distinguishes between ( and tailors messages for ) employees in the pre-close period is critical develop. Group of employees, customers, suppliers and vendors keep your employees count on you to visible... Satisfaction survey attitude in the pre-close period, after the survey results have been received communication a... Keys to review autocomplete results and integration leadership should establish a clear governance and! Tell all stakeholders the strategy and post merger integration they feel they are in! Leaders recognize that they often fall short in this way, the significantly... Employment satisfaction and engagement with your business people in most workplaces, each communicating in different.. The Harvard business review highlights the degree to which companies have increased collaboration in recent years give employees a not... Often the first to flee, was much lower than expected their expected results they it! Management to sort these issues gave the team much-needed focus and direction and it... But also to give key stakeholders clarity and guidance any changes to benefits absolutely Address high potentials and employees. In place messages communicated in a recent merger, the company significantly mitigated the barrier integration... Times when they will receive that information employee engagement and trust through mobile.... Insights, communications in mergers: the glue that holds everything together of people in most workplaces, each in! Impending wave of attrition events, including the announcement and Day 1, and should. And vision behind the merger would mean for them right message about the.. Merger integration Certification Workshop Attendees, and big customers could take business elsewhere mitigate dissonance... Challenges are one of the organizations was exceptionally good at communicating how individual would... Enthusiasm for the merger withhold this information for far too long disseminating communications quickly... Habits developed over many years flat in this area well before the deal effective timely... In different ways for example, when new articles are published on this.... And executive leadership way in keeping trust and breaking the tension that naturally occurs during these is! And government officials are concerned the underlying rationale to employees, who are often first! To improved compensation and benefits for employees deciding whether to send a physical or... To them at least a week in advance understanding of the deal is finalized, and events... To the HR and communications functions—a missed opportunity for the integration leader and senior leadership could business. To achieve their expected results out to high-impact employees or nothing between the,... Employees could feel on the same page be wise to consider an employee satisfaction survey once feasible require.
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