According to Harvard Business Review and supported by further research, the failure rate for mergers and acquisitions is between 70-90%. You might be thinking to yourself, “there’s no way that’s right,” but when you consider the many different and unique factors that contribute to the success of a merger or acquisition this statistic is not that surprising. However, there is one factor that stands out from the rest:
Internal Communications.
No matter how big or small your merger or acquisition is, how you communicate to employees will be a pivotal factor to success across the board.
Effective Communication is Key
It is common knowledge that effective internal communication can be one of the hardest pieces of a merger or acquisition to achieve, but also one of the most important for success. Yet, again and again, we see that internal communications is generally under-resourced, not prioritized, and left without a leader to spearhead progress.
What many people fail to realize is that silence is still a form of communication, and it only sends negative messages. Without transparency, employees are left with only rumors, suspicions, and speculations about their future with the company. This lingering presence of an uncertain future can preemptively create a wave of negativity and resistance towards change. Thus, causing all employees undue stress and anxiety about the integration at hand.
Issues Can Arise When Integration Information is Withheld
Keeping employees in the dark on integration plans creates a multitude of problems such as:
- Increased Employee Anxiety
- Decreased Trust and Confidence in the Company
- Decreased Motivation / Increased Resistance
- Employee Attrition
- And many more…
This is a common story when dealing with M&A transactions, but that does not mean it has to be your story. Below we offer tips that will help successfully manage internal communications during an M&A Transaction to avoid the dangers that come with silence.
Five Tips to Successfully Manage Communications During an M&A Transaction
1. Define a Leader
Defining who will take responsibility and be held accountable for internal communications during the integration is one of the most important steps to a successful merger or acquisition. Yet, time after time, organizations fail to do so, and fail to gain any traction. A great leader with proper support, or a dedicated internal communications team, can mitigate communication breakdowns and facilitate effective integration communications.
2. Start Early
Internal communications should start before, continue during, and remain after the merger or acquisition. As the deal progresses, the role of the communications team should address the evolving needs of all stakeholders. This will ensure that the change occurs as smoothly and effectively as possible. Without early communication, it can create a breeding ground for harmful rumors and speculation.
3. Create Quality Communications: Honest, Transparent, Consistent, and Proactive
Not all communications are created equal. A complete lack of communication is damaging, but bad communication can be just as harmful. Dishonest and vague communication during times of change can decrease trust and create resentment which in turn inspires bad morale. Consistent and proactive communication keeps everyone on the same page, keeps everyone well informed, and ensures no one is “the last to know.”
4. Be Thoughtful About How You Deliver Communications
Quality communications will only get you so far. Even if communication plans include all the characteristics mentioned above, plans will fall short if not delivered in a way that those involved will be receptive to. To be effective with the delivery of your communications, ensure that the method you choose reaches and is consumable by everyone in the target audience. Deliver communications in a frequent and timely manner to maximize their impact. Additionally, when choosing the most effective strategy and method of delivery, consider each company’s culture and previous interactions with different channels of communication.
5. Ensure There is a Space for Open Dialogue
Communication is not a one-way street. It needs to be an open dialogue between all parties to raise and address questions, feedback, and concerns. Having an integration portal, tool, or other platform that can accept internal feedback from all employees affected by the integration is important to maintain employee engagement. The communications leader or team needs to make sure they are responsive to communications from employees. Being responsive ensures all employees feel that they are an important part of the integration, and confirms employees opinions are involved when shaping the future of the company.
In conclusion, speak up! Make internal communications a priority and ensure employees are supported with proper resources. Leaving employees in the dark is a recipe for disaster and it can be easily prevented with the right communication tools. Avoid being a part of the 70-90% of integrations that fail by keeping your employees well informed and engaged in your next M&A transaction.
If you would like to learn more about how to improve communications in your next M&A transaction, CREO has the expertise to minimize risk and ensure you have a successful outcome with open communication. We would love to connect and offer guidance on your next transaction.
