Step 7: Develop M&A Communication Plans

Communication Guidelines for Acquirer

Content

• Communication Guidelines for Acquiree Interactions

• General Guidelines for Answering Questions
• General Guidelines for Addressing Difficult Audience Members
• Know Your Audience
• Visual Aids
• Handouts

The 15 Most Common M&A Integration Communications Mistakes

1. Shaving the truth

Protect your credibility by "telling it like it is," no matter how painful "it" may be.

2. Failing to address the “me issues”

When employees become preoccupied about what might personally happen to them, they focus less on their work. Take care of their "me" issues in a hurry.

3. Not telling your troops there will be some course-corrections

An integration unfolds like a fast-moving, changing story. Help people understand the volatility of the situation.

4. Hoarding information and answers

If you withhold information from people, they may eventually figure it out and withhold information from you.

5. Dodging the tough issues ...

5 Things You Should Never Say When Announcing the Deal

The next time you see or read about a top executive announcing a merger/acquisition, pay close attention.  I’m betting the boss mismanages expectations by making at least one of these five common but wrong-headed remarks.

1.      “We don’t anticipate making any changes.”

Why wouldn’t you?  During a merger or acquisition, people are primed for change.  They expect it.  So you should use this window of opportunity to make needed changes.  No company is perfect.  Take advantage of the situation and seize the opportunity to make improvements.  Besides, over the weeks and months to come, something is bound to change.  It may have nothing at all to do with the merger per se, but that doesn’t matter—the merger will be the convenient whipping boy.  With the merger in the forefront of people’s minds, that’s where they’ll lay the blame.

2.      “This is a merger of equals.”

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.  But the phrase gets misinterpreted.  Employees decode it to mean that both companies will be treated as equals so far as integration decisions are concerned.  What’s worse, executives often misuse the term in attempting to assure people that neither company will dominate the other.   Even if that’s the political intent of top management ...

Sugar-Coated Merger Announcements Leave a Sour Aftertaste

If you’re announcing a merger, don’t forget that you’re dealing with adults.  They prefer truth over dubious promises.  They’re irked by an unrealistic positive slant.  You’ll be talking into a headwind of skepticism, and a Pollyanna pitch is just going to stoke the fires of employee distrust. 

Fight the urge to sugarcoat the story—tell it like it is. Instead of coming across like some breezy politician, you’ll position yourself as a real leader.

Here’s the 4-step sequence that works best:

1.    Persuade your people with the logic behind the deal.  (Sell the rationale for the merger, using compelling facts and personal conviction.) …
 

Top 10 Reasons Why More Employee Communication Is Necessary When Merging Companies

Acquisitions create an insatiable demand for communication and connection. Here are ten reasons why:

1. More questions than answers.  Acquisitions create a lot of unknowns.  Energy focuses on “what’s going to happen to me.”  People begin to ask questions you couldn’t answer even in stable times.  And of course, everything that goes wrong gets blamed on the deal.
    
2. Rumor mill cranks at E-speed.  The rumor mill causes a lot of information warp.  There are many unreliable messages floating around that need to be identified and cleared up. Electronic communication channels move messages faster and farther. Leaders can’t wait a week to respond.
    
3. The truth is a moving target.  The “truth” keeps changing and is often dead on arrival.  Decisions are made, announced, and then promptly changed.  People can’t keep up with what’s happening.  Acquisitions are a fast-breaking story …

Communication Advice From A Hit Man

You’ve probably never heard of a guy named Robert Valentine Braddock. He’s a hit man who hangs out in Tennessee, and he has a killer reputation.

Now to be clear, Bobby Braddock’s fame is in the world of country music. His hits are songs, and they have made him a living legend on Music Row in Nashville.

Bobby is the only living songwriter who’s had at least one song reach the top of Billboard’s country chart in every decade for five decades running. He has written some thirteen #1 hits, and was inducted as the youngest living member of the Songwriters Hall of Fame in 1981.

Country artist Toby Keith recorded the biggest hit of his career with a Braddock song. It’s not about mergers. But the words to the chorus should be tattooed onto the brain of executives. Maybe then they’d remember the song when talking to their employees about being acquired and merged.

Merger Integration Communication Lessons Learned

Key Findings: Misses

–Large (e.g., 500+ employee) town halls in Los  Angeles, Chicago, and Phoenix

–Recorded phone messages from CEO

–Several days with excessive communications and mixed messages from multiple sources

Make A Sales Pitch For The Deal And Point Out The Warning Label

An integration initially produces more problems than solutions.

This is the “it gets worse before it gets better” phenomenon. And it’s totally predictable.

As people have to break their familiar routines, performance weakens. It’s an awkward time, with more confusion, communication problems and job stress.

This is a completely normal turn of events. Just the same, it looks bad. If people aren’t mentally prepared for it, chances are they’ll conclude that the integration plan isn’t working. The grumbling gets louder, and the merger loses steam.

Resistance always spikes up when predictable integration problems take people by surprise ...
 

Merger Communication Best Practices

27 Merger Communication Best Practices including:

• Assuming managers are informed and onboard
• Thinking silence doesn’t say anything
• Improvising
• Dodging tough issues …

M&A Insights Drawn from a Nobel Prize Winning Psychologist

When directly compared or weighted against each other, losses loom larger than gains.
 
You can measure the extent of your aversion to losses by asking yourself a question: What is the smallest gain that I need to balance an equal chance to lose $100? For many people the answer is about $200, twice as much as the loss. The ‘loss aversion ratio’ has been estimated in several experiments and is usually in the range of 1.5 to 2.5.
 
To put this conversationally, people normally weigh losses about twice as heavily as gains. So that’s what you’re dealing with during merger integration. Folks are focused on the potential downside— how their careers might get damaged. Opportunities must be very bright and shiny, say twice as good as the risk of losing, for people to be upbeat and excited.
 
This helps explain why selling the merger to your workforce can be a pretty tough job.
 

Ignore Social Media at Your Own Peril During Merger Integration

Communication problems have always ranked #1 on the list of generic problems during integration.  But they’ve hit a far higher threat level now because of today’s communication technology.

With email, Twitter, Facebook, and such, it’s like every employee runs a broadcasting station.  The speed, reach, and sheer volume of information circulating from the people in your workforce eclipses what was possible just a few years ago. 

This has serious implications for an M&A scenario.

We know that when change hits, the first scan is for danger.  This is just human nature…the survival instinct at work.  So when a deal is announced, people instantly scan for how it might be threatening to their careers.  This creates a mindset colored by uncertainty, anger, and distrust.  What employees see and hear is perceived through this negative filter, and their …