Dealmakers on both sides of M&A transactions should keep shareholders informed and engaged during an acquisition. Structured and open lines of communication are critical to provide clarity and eliminate speculation about what happens next.
Understand how lack of communication can damage even the most mature businesses and shake their foundations. To ensure long-term growth, success, and sustainability, you’ll convey all the intelligence relevant to the entities connected to the company.
The sooner you start communicating, the easier it will be to engage stakeholders and put together a detailed integration plan. You’ll need their buy-ins and support for the transition to progress efficiently and seamlessly right through the final execution.
Being transparent about the merger will also ensure that you maintain the hard-won confidence and trust stakeholders have in the company. Stakeholders are not just equity owners but also include employees, executives, customers, vendors, regulating agencies, and other partners.
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Why Keep Stakeholders Informed & Engaged During an Acquisition
From the time you contemplate a merger or acquisition, you must start engaging the company’s key stakeholders. Your messages should be transparent and consistent, providing frequent updates on the latest events happening in the company.
All through the execution of the M&A deal, from the initiation to completion of the integration, keep stakeholders informed. Not only will you talk about why the merger makes sense, but you’ll also be clear about the potential benefits and risks.
Being open to accepting feedback and inputs takes away the uncertainty, mistrust, and anxiety. For the deal to progress seamlessly, you’ll need to ensure that there’s no resistance to the transition. Every message should include verifiable metrics and a genial tone with a positive sentiment.
Uniformity in your communication across the board is also critical for acceptance and understanding from the stakeholders. That’s how you’ll ensure business continuity while boosting morale and avoiding the possibility of top talent attrition.
Most importantly, you must convey the strategy behind the merger and the surviving company’s vision and mission moving forward. You’ll ensure enthusiasm and support while dispelling any falsehoods and misrepresentations. Remember to include both internal and external stakeholders.
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How to Structure Communication During Mergers – Getting Started
Developing the communication structure is a crucial exercise that starts during the due diligence phase of the merger. Side by side, company owners must be ready with the infrastructure and team.
A merger is typically a confidential event, but chances are that word gets around before the owners are ready to make the final decision. Dealmakers should prepare for this happening by having contingency plans to deal with possible leaks of information.
Prepare pre-determined and approved messages that are sent out as soon as the owners are ready to share the information. By this time, you should have a team in place that is responsible for answering questions and relaying controlled information.
Reveal enough details, at this point, to reassure the stakeholders without getting into any specifics that could jeopardize the deal. And potentially alert competitors.
Determine the Internal and External Stakeholders
A part of the prepping involves determining the internal and external stakeholders and working out customized messaging for the entities. External stakeholders include:
- Customers need to know whether the business will continue to fill orders as before. And if they can expect the service to remain consistent even after the merger. Losing the customer base or customer confidence is one of the key factors that hamper successful mergers and long-term growth.
- Vendors need information about the status of their orders and if they can expect further business.
- Regulatory authorities and government agencies want assurance about compliance and job security.
- Investors are external stakeholders who must receive communication that clearly outlines the strategic and financial benefits of the deal. More importantly, you’ll talk about how the merger will secure their investment and enhance potential returns.
- Critics and financial analysts speculate about the positives and negatives of the acquisition.
You’re also accountable to internal stakeholders–employees, the most critical and dynamic resource. Considering that companies typically have distinct work cultures, your communication must address their concerns with messaging that delivers impact.
You’ll target top talent and skill sets that you can’t risk losing. Also, reach out to unions, workers’ councils, and retired personnel. If needed, get legal advice on how to reassure them about their job security and that benefits will continue uninterrupted.
Include the management in all communication with instructions and information that they can share with the people working under them. Questions may center around the surviving company’s mission and vision and the possibility of downsizing the workforce.
Lowering attrition rates for the core talent, relaying reporting requirements, and providing direction on future career paths. These are some of the top concerns your messages should cover. Having open discussions with the management will certainly allay fears about job security.
Announce the Finalized M&A Deal
The opportune moment to keep stakeholders informed and engaged during the acquisition is a crucial aspect of the whole process. Not only must you communicate when the deal is final, but you’ll also talk about what stakeholders can expect next.
You’ll advise people about the strategic objectives of the merger and appointments in key positions in the management and board. Reassure personnel that regular day-to-day operations will continue as before and the gradual changes to expect. However, they can look forward to regular updates.
Informing employees about their roles in the execution of the merger, the milestones and timelines, and other details is important. That’s how you’ll keep them focused and confident while the process of integration takes place.
Remember that clear and well-communicated information equips employees to function well through the acquisition. In addition to internal communication, you’ll also make announcements in webcasts, public forums like town halls, and social media platforms. Business periodicals are great options, too.
Welcome questions from customers, vendors, and investors, preferably by setting up a well-equipped desk to handle concerns. You’ll reiterate consistent supply chains to customers and orders to vendors and manufacturers.
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Plan Communication Before the Integration
The interval between the announcement about the acquisition and the actual integration is critical. At this time, your core talent will work out exit strategies by possibly searching for available positions at competing companies.
Customers and vendors might consider taking their business elsewhere, while investors may explore the need to pull out. An effective strategy to avoid these pitfalls is to keep stakeholders informed and engaged during an acquisition.
Provide clear and accurate details about what to expect without frills and pep talks that may take away from your integrity. Instruct the key personnel in managerial positions to answer employees’ queries accurately while listening to feedback carefully.
Communicate that the dealmakers are open to hearing about the aspects that are progressing well. But also welcome criticism and will take the necessary corrective actions where needed. You can also indicate the integration leader who will be handling the process and is accountable for it.
We reiterate. Focus on messaging that will outline how daily tasks will progress during the integration, like relocating to new premises. Or welcoming new entrants or instituting a new workflow.
Clients may have to understand new billing procedures, while vendors may integrate an updated payment system. That’s how you keep stakeholders informed and engaged during an acquisition.
Structure the Integration Seamlessly with Communication
Integration is the ultimate step that makes or breaks the acquisition. The effective communication lines you’ve structured come into play here. Many key changes take place in the weeks and months after the actual signing of the deal.
The planning you communicated to the stakeholders will finally start to occur. Like, for example, the merged company may finally move to a new location. Even the best planning cannot account for unforeseen challenges, which is why stakeholders should feel comfortable about voicing concerns.
Clients and vendors can communicate any issues they are facing with the updated workflows and ask for resolutions. Workers may have trouble coordinating with the new company culture and unfamiliar teammates. All these pitfalls can be resolved amidst a genial atmosphere conducive to change.
Typically, a series of milestones are outlined for the integration, and as the transaction culminates, the surviving company starts operations. The key here is to provide consistent updates to various stakeholders to inform them that the company is progressing well.
Informal channels like social media are effective in maintaining engagement with employees, clients, investors, and the general public. Aside from successful milestones, you can also talk about the risks and challenges the company is navigating successfully.
You’ll also institute a new culture, which is an amalgamation of the positives from both cultures. If you have updated missions and value statements for the surviving company, the stakeholders need to know about it.
Relay information about any decisions taken by the top management and reductions in duplicated and redundant resources. Also, talk about changes in the targeted geographical markets and how the new company intends to maintain its market positioning.
Remember that you need their buy-ins at every stage. That’s one of the key reasons why you should keep stakeholders informed and engaged during an acquisition.
Stabilize the New Company Post Integration
Post-integration is when the real challenges start–running the day-to-day operations of the newly-built company. At this time, owners are concerned with tweaking the processes to iron out the hurdles and snags.
Effective communication can go a long way, and the best source of feedback comes from inside the organization. Rely on employees to come forward with the issues they’re facing and comment on how to improve functioning.
Employees are often not forthcoming during one-on-one discussions, which is why companies should institute other tools to gather feedback. Think: running surveys, feedback boxes on the website or email, or conversations with focus groups.
Using the Integration Barometer can also get you the data you need to make the right decisions. Don’t hesitate to use AI tools and automations at every step of the merger to streamline communications.
You can also rope in reputable employees to identify potential issues and alert integration managers discretely. They can step in to address potentially volatile situations and diffuse them effectively.
When communicating with stakeholders, a key aspect is conveying the value the deal brings to the merged companies. This is why you need to know how to value your company so you can relay verifiable metrics. Watch this video to understand how.
Effective Communication in a Consistent Effort
Maintaining communication with key stakeholders takes consistent effort, which is why you should institute the best practices. Here’s a quick overview.
- Empower the executives to engage with the stakeholders by assigning responsibility and accountability.
- All messages should be consistent across the board and delivered repeatedly via multiple channels.
- Deliver accurate and updated information only. If talks are in progress, relay the status as is.
- Be mindful of the issues that directly affect stakeholders and provide customized responses.
- Messaging should be personal and include a human touch with careful regard for the culture. Avoid legal jargon and technical terms.
- Put together an experienced team comprising personnel who are familiar with the company’s operational structure and culture. Assign them the task of communicating with stakeholders. Outsourcing this task to external teams is never advisable.
- Communication channels should be two-way. Instruct the team to be proactive about gathering feedback. Record stakeholder concerns and work on resolving them.
At the end of the day, the most critical factor is the company’s objectives from the merger. Any and all information you relay should add value to the business and contribute to its long-term success.
In Conclusion – Don’t Overlook Communication
Considering the high rate of failure in mergers and acquisitions, dealmakers should explore possible pitfalls. They should work proactively to ensure that they achieve the core objectives of the merger.
Communication is a great starting point that can streamline the entire process. Keep stakeholders informed and engaged during an acquisition. Having them in the loop ensures their buy-in and support.
That’s how you can ensure that the integration progresses seamlessly and the new company achieves its objectives and long-term sustainability and scalability.
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