What’s the best way to communicate mergers and acquisitions? What’s the worst mistake you could make? What works well?

Hot on the heels of the proposed merger of Asda and Sainsbury’s supermarkets, I thought I’d collate some advice and guidance to help you learn more about the topic.

Communication during mergers and acquisitions is critical. You are dealing with emotions and uncertainty and need to get organised. This is a serious case of change comms. 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.

I’ve got lots of advice to share with you today including views from professional communicators in my network and a first-hand account from a CEO who has just been through a merger.

Let’s bust some jargon first:

  • A merger is when two or more companies combine to become one new company (and legal entity). There are several different types of merger, but essentially, it’s an agreement that unites them as one. They are often “equal” in the agreement.
  • An acquisition is when one company is purchased by another. Sometimes it’s referred to as a takeover. This is typically a larger company purchasing a smaller company. One entity takes ownership of the other entity’s stock, assets or equity interests.

The two are often talked about together and you’ll see M&A used to denote the pair.

According to the BBC today, Sainsbury’s CEO Mike Coupe has said Sainsbury’s and Asda will remain separate brands and no stores will close. They collectively have 330,000 employees across 2,800 stores and £51bn revenue.

Joined-up thinking
I had a look at Asda’s external intranet and it includes a link to a brand new video from the three CEOs – Roger Burnley, President & CEO, Asda, Mike Coupe from Sainsbury’s and Judith McKenna, CEO, Walmart’s international arm.

You need a log-in to access it. You also need a log-in to Sainsbury’s site. From what I can see, they’re taking a joined-up approach to internal communication, which is smart, particularly having the message from the three CEOs, plus one from Roger. I imagine his message is along the lines of “this is what it means for us/you” at Asda.

If anyone from Asda or Sainsbury’s would like to share what they’re doing internally with readers of my blog (I know you’re busy right now!), the offer remains open.

Further reading on the All Things IC blog:

If you are responsible for M&A comms, you need to get organised. You often don’t have a lot of time to prepare. So what do you need to know?

Here are my golden rules when communicating M&As

In no particular order (they’re all important!)…

  • Communicate what’s happening as early as you can
  • Ensure employees know where to get credible, accurate and reliable information from and how to ask questions
  • Map your stakeholders to ensure you don’t miss anyone
  • Gather facts and build your network of internal influencers and decision makers
  • What’s the timeline? Employees need to know what is happening when. What are the milestones? How will they know when each stage has happened? Don’t forget to detail the physical changes e.g. when you switch logos/offices/how you describe the company.
  • Start relationships with the comms team in the other organisation/s. How can you create combined content and messaging? How do they communicate? (E.g. could your CEO be featured on their intranet in a short video talking about what’s ahead?)
  • Establish a source of truth for the merger or acquisition – where can employees get credible, accurate, reliable information from? If it’s line managers, ensure they’re clear on their role. If it’s the intranet, ensure content is refreshed regularly.
  • Listen, listen, listen – you cannot over communicate change and you can never listen to your employees enough. Amplify your two-way channels. (In other words, actively promote how and where your employees can ask questions).
  • Use the questions you gather to help shape and plan your content e.g. FAQs documents and talking points for managers. Commit to answering them. E.g. could you have a group/hashtag on your enterprise social network to collate the queries? Make queries visible. If one employee is asking something, chances are others will be thinking it too.
  • Provide certainty of communication even if you can’t share certainty of content This is the place to get information, we will update you at X time.
  • Provide a safe space to ask questions and for leaders to get comfortable with messaging, particularly if it’s tough and there are job losses
  • Review and measure constantly. What’s working? What’s not? What are the queries? What are the rumours? How are employees feeling about the merger or acquisition?
  • What are you learning as you go? What’s helping your employees understand what’s happening?
  • Share experiences and stories – what is it like to work in your organisation? People remember stories over stats.
  • What is staying the same? – As with any change comms, make sure you outline what is remaining constant. This is important to help guide employees through the change.
  • Equip employees to have informed conversations. What can they say externally e.g. to customers, to interview candidates and suppliers?

A CEO’s view

This month a major merger was completed when two organisations, each made up of around 1500 people, managing about 65,000 homes between them, amalgamated into a £750m turn over organisation.

Kate Davies, CEO of Notting Hill Genesis has been writing on her personal blog about the experience over the past few weeks.

She writes: “A merger is really a disturbing experience for those involved, where we confront both real dangers (will I have a job?) and mental anxieties (feelings of disorientation and loss, for example). These mental worries remain in our minds and consume us. I am not the only one who has lost sleep.

“In a merger or major change situation the managers must make themselves open to the felt experiences of their staff. Being in touch with and understanding our own feelings is a start.

The most sensitive early warning systems available to organisations are the anxieties stirred deeply within our managers.

“We noticed the overriding desire of our managers to show a stiff upper lip or to go around saying “I love change”, which is often untrue. Much better for the leadership to encourage the anxieties of the managers to emerge.”

A merger is a radical change which is already affecting everyone in both organisations, even if for many of them nothing is actually changing in terms of jobs or terms of employment. Merger changes things more fundamentally than most of us have ever experienced before at work.

“The process will rupture the links that all of us have with our work, the company and each other. All our profound emotions that are contained within our original organisational structure are released, and can result in ourselves or our people descending into panic – Who is in charge, will my manager change, will I have to work from somewhere else?”

You can follow Kate’s thoughts via her personal blog. I recommend her post on the role of senior managers in a merger situation.

Views from my network

I Tweeted this morning to ask my network for advice about M&A comms. Thank you to the professional communicators who have shared their thoughts as part of my blog’s #ICVoices series. I’ve included their thoughts below on their top tips, plus worst mistakes you could make in this situation.

What’s your top tip for effective merger and acquisition comms?

Respect both companies’ brands and history. Recognise it matters to employees, so as well as being clear about the benefits, be honest about the challenges and the risk and the steps being taken to overcome them. Be considerate” – Lynda Thwaite, Head of Marketing and Communications, @LyndaTLive.

Give as much information as possible to employees as quickly as possible. Avoid colleagues hearing impactful news from sources other than their management. Keep the flow of information going. Some decisions will be timed so market hears first but, initiate comms to your employees at the same time. Invite questions. “I don’t know, yet” is an okay answer once you close the loop down the road. Ensure line managers have an FAQ on hand for follow-up questions. Colleagues will have uncertainty. Reassure them” – Paul Cawley, Communications & Engagement Officer, @paul_cawley.

Be absolutely honest all the way. Kickstart the comms as soon as you can. Don’t wait for info/detail to communicate. A small message is better than no message. If there’s sensitive information holding back detail say so. Reiterate the honest, straightforward WHY in everything” – Cheryl Martin, independent marketing communications advisor, @cmmbiz.

Plan but be agile, as nothing stands still. Work collaboratively with the legal and HR teams, as everything has to be aligned” – Laura Sutherland, Founder and Director @laurafromaura.

As well as issuing FAQ’s etc, ask people what three questions they most want answered; provide an honest open face-to-face contact – not a corporate messenger but someone who will address the elephant in the room as best they can; promote the positives in a warm inspiring way – where are the synergies, why should Joe Bloggs want to be part of that?” – Andrew Martin, Senior HR Consultant @AskAndrewMartin.

Over communicate. Create a timeline with milestones that can be updated and referred back to. Create an FAQ process that allows people to ask questions & receive answers. Use the timeline to help people understand when the questions you don’t have answers for will be answered” – Elisabeth Wang, Executive Director, PR and Communications, @elisabeth_wang.

What’s the biggest mistake you’ve seen companies make when communicating mergers and acquisitions?

“Completing forgetting any emotional ties employees have to their former or new brand. If you disregard that then you lose trust and respect from day one” – Lynda Thwaite, Head of Marketing and Communications, @LyndaTLive.

“The focus on industry/market/investor communications and a lack of engagement and focus regarding employee comms. They will be the worried ones” – Paul Cawley, Communications & Engagement Officer, @paul_cawley.

“Saying right from the start, “Nothing’s going to change.” I.e. “We’ll keep our brand. It’s business as usual” – Cheryl Martin, independent marketing communications advisor, @cmmbiz.

“Not thinking of the risks and researching and planning for them” – Laura Sutherland, Founder and Director @laurafromaura.

“Not being clear on the real timescale for reviewing resources in each part of the business” – Andrew Martin, Senior HR Consultant @AskAndrewMartin.

“Lack of transparency – delaying tough answers doesn’t help you. It only serves to erode trust” – Elisabeth Wang, Executive Director, PR and Communications, @elisabeth_wang.

Thank you to everyone who contributed to this article. Would you like me to write more about this topic? As ever, you’re welcome to comment below or Tweet me @AllthingsIC to share your view.

Thank you for stopping by.

Want to learn more about change comms?

I’d love you to join me at my next Change Communication Masterclass on 20 June 2018 in London. See the Masterclasses website for full information. Places cost £599+VAT per person and you’ll have the opportunity to learn some comms theory, ask questions and meet other practitioners.

 

Rachel

Post author: Rachel Miller

First published on the All Things IC blog 30 April 2018.

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