It is generally understood that due diligence is key during any transaction process, from legal to finances, no detail should be overlooked. However, no matter how positive the merger will be, any transaction can quickly turn chaotic when businesses overlook the importance of communications. While this might seem obvious in hindsight, good communication strategies are rarely considered as critical to the success of a deal as the legal and financial considerations. The reality is today, particularly in our digital-driven society, transparency is vital to avoid misinformation, business disruption and to maximize the value of the deal.
Once, the numbers are finalized and deal terms are set, an effective communications strategy should be the next step. But what are the key elements when it comes to an organizational change? Below are our top five recommendations when it comes to M&A communications.
1. Timing is everything.
Like Goldilocks and the Three Bears, moderation is everything with M&A. Not too much, not too little and definitely not too soon. It’s vital to keep your contacts informed, as they can be your best supporters (or your worst critics). However, relaying early news of an expected acquisition to a large group of people increases the likelihood for premature exposure. This can result in the news being leaked to the media or even customers and competitors, leaving the door wide open for miscommunication or even worse, mistrust.
A communications strategy should include a detailed timeline that outlines not only the date and timing of the announcement, but who will be responsible for informing specific audiences and what the key messages should be (we’ll get to that in a minute). This approach ensures that everyone receives the same information in a relatively short amount of time in order to contain the rumor mill and limit the number of unnecessary issues.
2. Consistency is key.
There are two sides to every story, especially in an acquisition, and it’s important to keep the messaging consistent. These deals affect each level of an organization, including individual roles, org charts and procedures. Everyone will feel the impact so it’s important to be consistent, and intentional – make sure no employee or customer feels forgotten. It’s likely that roles will inevitably overlap, dealers or customers will conflict or benefits will change, so proactively addressing these areas will ease nerves of all parties and make them feel involved during the process.
Additionally, a set of key messages should be developed that keeps all informants speaking from the same page. It’s likely that a number of identified employees will be communicating this message to their direct reports, key sales accounts or large vendors, so having talking points, Q&A and targeted messages for each audience will put everyone more at ease.
3. Clear and transparent (no, these are not synonyms).
Clear and transparent communication during a merger or acquisition can be difficult due to government regulations, private company preferences or timing. However, there are many ways to tell a story that doesn’t include proprietary information such as exact revenue figures or projections. Transactions can be explained through multiple vehicles like press releases, customized letters, email blasts, phone calls or infographics to help visually explain the announcement. However, through all of these options, being open with how the deal will directly impact the specific audience is imperative to maintain trust moving forward.
Furthermore, the strategic rationale for a merger or acquisition must be made abundantly clear. Be sure to always answer the “WHY?” early and often in all communications. Even when the financials or benefits become complex, it’s important to explain the news at a level digestible for the audience or else you’ll quickly lose their attention and the message will be lost. Every deal faces a different set of challenges and opportunities, and it’s up to your communications team to tell that story.
4. Create content you would consume and tell it on the channels you frequent.
Mergers and acquisitions can be complicated and often require multiple financial reports and specific supporting operational details. However, these messages can be transitioned for each audience, so be sure to create content that you would consider reading, not just what the lawyers suggest. This more narrative content could include a video from the CEO(s), a factsheet to introduce the new company or other multimedia tools. And don’t forget digital channels including social media and deal-specific internet sites (microsite), as these can be highly targeted to your specific audience and are extremely measurable.
During a major announcement, businesses are on high-alert and in the spotlight more than ever so it’s vital to cover all your bases. While this type of news may increase scrutiny on a company, it also creates an opportunity to reach a broader audience. Find the most effective way to communicate this change, as often the best efforts can be lost if you aren’t using the right channels.
5. It’s not over when the deal closes.
When both parties sign on the dotted line, money moves and the media dust settles, it doesn’t mean the communications work is done. Maintaining the momentum through a transaction can improve employee morale and ease the transition. While much of the subsequent news will impact internal employees and contacts, be sure to continually communicate each major milestone. Even more, if the deal proves to be successful, circle back with your audiences to tell this story (which just might increase more M&A interest!).
M&A can make or break even the most successful organization and requires a completely new strategy to get it right for all audiences. During your next deal, make sure you embrace the new narrative and add communications to your M&A toolkit.
Amanda Passage is a director at Lambert