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Effectively Communicate with Employees During Mergers and Acquisitions

Mergers and acquisitions are a great way to accelerate business growth. However, this growth could fail if it lacks proper communication, which includes a lack of information during the pre-merger and a lack of post-merger cooperation and coordination. M&A is not merely a business deal but combines two organizational cultures and people. Even companies that seem very similar can have very different corporate cultures, which can be challenging to blend when companies merge or are acquired. 

Employees frequently speculate when a transition is announced, and many businesses turn into rumor mills. Many employees’ first thought is, “Will I still have a job when this is all over?” If they aren’t getting the answers they require, this can lead to panic. Without effective internal communication, the whole M&A deal wouldn’t attain its full fruition.  

Some rumors are relatively harmless, but other stories or media leaks can harm the company and cause valuable employees to leave. The uncertainty caused by poor communication leads to time-wasting rumors and reduces employee engagement, motivation, and work quality, ultimately affecting the company’s bottom line. 

Why is effective employee communication critical?  

A company’s employee loyalty and trust, employee retention, company culture, and long-term success are jeopardized if it fails to communicate effectively during a merger or acquisition. For three primary reasons effective communication is critical during M&A: 

1. Builds Employee Loyalty and Trust 

How a company communicates during a transition directly impacts the loyalty and trust of its employees. Company leaders and other internal communicators can reduce the negative impact of M&A by developing a proactive communications strategy. The communications team should prepare messages for target audiences, create an announcement timeline, and appoint or notify company spokespeople. Employee trust is too valuable to risk losing. 

2. Retains your Best Talents

Employees at both companies are concerned about their job security and responsibilities, so they want to know when and how changes will occur. Legal regulations can make it difficult for executives to be transparent. Many employees will leave if they are kept in the dark or lied to, even if it is unintentional. One of the reasons M&A deals fail after an acquisition is mass talent departure. According to EY research, 47% of critical employees leave after a significant transaction. Within three years, that figure had risen to 75%. To keep your best employees from going, share information early and frequently. 

3. Reduces Culture Clashes

Whether you want it or not, your company culture will be influenced during an M&A, causing a culture clash. “Culture is inextricably linked to performance, especially in an M&A context,” according to Deloitte. Work to develop a cohesive culture between the two merging companies to reduce cultural clashes. Consistency is essential for unification. Your communications teams should constantly communicate the newly joined organization’s values and vision through every channel. 

Integrating a communication plan during a merger or acquisition can be tricky and time-consuming. We have found four tips for smooth internal communication to facilitate the transition. 

4 tips for effective internal communication during an M&A: 
  • Create a Timeline 

M&A has many moving parts: Deals are frequently delayed. And multiple groups must be informed at different times. As a result, it’s critical to have a comprehensive communications plan and timeline. Employee morale will be higher if they believe they are being kept informed, prioritized, and valued. This is especially important for deskless employees. Employees on the front lines of business are frequently the last to hear about company news. Provide FAQs and talking points to them through intranet software like PeopleOne, meetings, and any other channel you use. 

  • Create a Core Message 

During the integration period, all communications should be anchored in core messages derived from the deal’s rationale, the employee value proposition (EVP), and the associated change story. Motivation expresses the fundamental reasoning behind a transaction and its value drivers. The EVP explains why the future looks promising and what the deal means for employees. The change story provides a clear and compelling picture of what needs to be done and why to unlock the deal’s value. Creating a persuasive set of core messages is one of the most important moves a company can make.  

  • Ensure Roles & Workflows are Understood

The M&A process is frequently analogous to two new roommates moving in together. Frictions tend to arise over who plays what role, who has access to what, and how the two will coexist. However, your interactions with them may be limited by time, distance, or regulations. As a result, detailed planning and developing a structured communication platform that mirrors the M&A collaboration is pivotal. Many of these challenges can be resolved if you educate everyone to understand their roles, who reports to them, and to whom they should say.  

  • Be Truthful Always

Avoid making statements unless they are true. Be truthful throughout the merger and acquisition process. You are not required to know everything, and it is reasonable to admit when uncertain. While providing the information is beneficial, simply providing a platform for two-way communication to facilitate questions can help to foster a culture of transparency. Even if you can’t answer every question, don’t be afraid to create a safe space where employees can seek information and clear their doubts. 

What role does a digital internal communication platform play in your merger and acquisition? 

Following the merger announcement, you may witness mixed emotions among your employees. This is where a digital internal communication platform plays its role. It provides two-way communication between the management and the workforce, allowing everyone to get the company’s updates and help the employees also voice their concerns. It will silence the false rumors and misinformation spread. 

Intranet software like PeopleOne is the ideal place for this unified source of news, centralizing employee communications and updates and acting as a single easily accessible hub. Reducing employee anxiety and harnessing emotional commitment during organizational change is pivotal. When there are so many changes, this isn’t easy to do, but establishing new, consistent intranet branding encourages employees to engage with your re-imagined brand identity.  

Please look here to see what Chris O’Day, Director of Marketing at LGA, says on how PeopleOne has impacted and supported their organization following a merger. 

A single intranet platform is ideal for skillfully integrating cultures while maintaining existing brand personalities. To meet the expectations of M&A activities, a flexible digital workplace platform is needed to adapt to the transition process of an M&A. Dynamic user systems accommodate new employees and adjust for those who leave, while directories and enterprise social features assist employees in navigating the shifting landscape of M&As.  

If you are planning to undergo a merger or acquisition and achieve a seamless transition with employees, talk to our experts and see how PeopleOne can help your organization today! 

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