Transaction effective date 3. merger or acquisition. Addressee Address City, State Zip. [Read related article: The Secrets to Building a Winning Team Culture for Your Business]. 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. Details about the companies 2. If there is a lack of proper communication during the merger process that can also lead to failure. Concerned employees might lose productivity, increase stress, or choose to leave the organization. During a transaction, your company culture will be affected whether you want it to be or not. Integrate the employee communication strategy with the communication strategy for other stakeholders—customers, suppliers, government leaders and the community. 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. But oftentimes, leaders focus on items like: The majority of mergers and acquisitions fail because leaders ignore the emotional needs of their employees. A merger is a time of uncertainty and risk ….. Employees may leave Customers are worried Market / Shareholders may react negatively Competitors attack : people & business Productivity / revenues often decline …..Communication is essential to focus the organization & to help mitigate these risks 3 5. Early, frequent communication following merger has impact EXAMPLE Change in mean from pre-merger benchmark Control plant – no communication until formal announcement of organizational changes Experiment plant – early, frequent communication during planning process Stress – 9% less Uncertainty – 22% less Intention to remain – 6% higher 4 5 6 4 3 3 5 Mean Mean Mean 2 2 M Communication management is in all 13 steps. That same month, AT&T acquired Time Warner for $85 billion. In a startup, the people on the ground have helped build a successful brand from nothing. This is a communication task. When executive teams fail to acknowledge change, it can be difficult for HR to align and engage employees. How to communicate with employees through a merger. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. As a result, pride can surface among those who are a part of the acquiring company. Here are some common emotions and leadership approaches to begin communicating a merger to employees. Be sensitive to the time it may take for employees to accept change post merger. For instance, maybe you're looking to increase your customer reach, or perhaps you want to diversify your operations. Employees have to be persuaded to believe in the corporate vision and to act to bring it about. It would be wise to consider an employee communication plan a vital element in the event that an enticing deal comes to fruition. If their jobs are not at stake, communicate that immediately. Staying human during these times could be the difference between failure and success. Communication Skills During your career, you might be responsible for informing your employees about a merger or acquisition. (4) Provide the tough information during and after integration. In the next section of your letter, explain the "why" behind the merger. management consultant believes that over-communicating in a merger or acquisition is good. Think about your unique audience and how to address their needs. In 2010, PWC conducted a survey on companies that had completed mergers and acquisitions. Mergers and acquisitions will continue to be key strategies for companies looking to grow market share. "One of the great ironies of M&A activity is that trust, a key ingredient for business success, often quickly dissolves, as M&A activity is usually cloaked in secrecy," wrote M&A consultant Jennifer J. Fondrevay in Harvard Business Review. This doesn't mean deals aren't closing, but that they're closing and then failing to deliver the results stakeholders expect. To: All Employees From: Senior VP . ... At Bank PHB, pre-merger communication “was first restricted to the . [Read related article: How Business Transparency Empowers Your Company]. Effective communication is an imperative element of mergers and acquisitions. As you build your own communication plan, consider the power in numbers. How should we communicate the purpose of this change. It will outline the timeline of the merger/acquisition and provide details about both companies, including the steps for moving forward. 1. In June 2018, the Walt Disney Company offered to purchase most of 21st Century Fox for $71.3 billion. Know the communication goals. If you've scheduled a meeting to address the merger in person (which you should), alert them of that so they know when to attend and to bring questions. And that is just one issue to worry about! Communicating the shared vision and goal of the transaction will help employees and other stakeholders to understand and accept the deal. Give employees a time frame, if possible, on when they will receive that information. By listening to employees, communicating effectively, and doubling down on its unique culture and programs, LinkedIn was able to thrive, even during its acquisition. When it comes to mergers and acquisitions, don’t communicate for the sake of communication. The change of scenery can decrease anxiety and increase humility. Among the factors that impact M&A performance is the quality of the communication with employees. employee attrition during a merger or acquisition. During a major change such as a merger, employees are in need of information that will bring clarity to their specific situation. Company Name or Letterhead Address City, State Zip. The initial announcement will be responsible for letting your investors and employees know that you are currently working on closing a merger or acquisition. Escape rooms or improv workshops help build a collaborative spirit. Harness a Proven Methodology to Keep Employees Engaged. The key when pulsing during a merger or acquisition is to make employee voices a critical part of the change. Address anxiety. According to Deloitte, "culture is inextricably linked to performance, especially in an M&A context. A common pitfall is for the acquirer to communicate to employees early in the deal that they intend a “merger of equals” so as not to upset employees in the acquired organization. Do we have a central FAQ document for managers? 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. Ask yourself: Your internal communication plan should be multi-tiered and intentional. Learn more. Among the factors that impact M&A performance is the quality of the communication with employees. Don't forget to communicate early as well as more often after the deal is signed. Empathy for employee needs breeds the help you need to manage change. The failure rate of mergers and acquisitions consistently falls between 70% and 90%. If a company fails to communicate effectively during a merger or acquisition, it risks its employees' loyalty and trust, employee retention, company culture, and long-term success. Business leaders need to focus on effective communication and improving the employee experience. It will also turn potential office bullies into leaders and change agents. This article will take about 3 minutes to read For a company and its owners, a merger can present exciting opportunities for expansion and growth. What do they sell?) Take Care of Employees. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” 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. Employee trust is too costly to lose. The leadership approach: Develop a communication team. Using Lean Strategies to Achieve Team Synergy and Efficiency, From COVID-19 to Hurricane Season: Disaster Preparedness for Small Business, Your Guide to Creating a Small Business Marketing Plan, How to Make Money in Retirement: A Guide to Turning a Hobby into a Side Business, The Best Employee Monitoring Software of 2021. This is a communication task. 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. Your employees are important to you. Whatever the case, share it with your employees so they understand your goals for these changes. Only after the news is out does management turn its attention inward, usually relying on the more traditional channels for informing employees. M&As can be long, complex processes. But depending on and supporting teammates impacts employee engagement. Know the communication goals. Individuals who stick to their "old ways" may hoard knowledge and become condescending toward other team members. Communicating the shared vision and goal of the transaction will help employees and other stakeholders to understand and accept the deal. Intentional and consistent messaging can cultivate a unified company culture. Do we have a timeline of milestones and updates? One of the many joys of being an Internal Communicator is the variety of our work. A merger or acquisition? 2. When it comes time sell your company, one of the toughest issues is communicating the process to employees. These transactions can have a significant impact on employees – increasing stress, anxiety and uncertainty. 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. But when one entity is more dominant, people may believe there are winners and losers. How to communicate with employees through a merger. At a large corporation, efficiency and operations depend on the support of thousands of individuals. Mergers are tricky business. Some previous work, however, has suggested that management should avoid communicating realistically with employees during mergers and ac-quisitions. At some point in your career, you may find yourself responsible for communicating a merger. 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