How to Communicate Effectively and Build Positive Perception During a Merger or Acquisition (and Why It's Important) Dive into the essentials of communication during mergers and acquisitions, where clear, consistent messaging is key to building trust with employees, customers and investors.
- Effective strategies for both internal and external communication during a merger or acquisition
- The importance of addressing stakeholder concerns to ensure a smooth and successful transition
- How to navigate challenges with empathy and understanding
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During a merger or acquisition, a positive perception of the involved organizations is critical, but it can also be incredibly challenging. Employees, customers and other key stakeholders will likely have many questions about what the future will hold. Rumors and speculation can breed, eroding trust and fueling suspicion if communication isn't frequent and transparent.
Every aspect of communication matters when uncertainty runs high, and consistency is critical. Everyone in the merging organizations should be marching to the same drumbeat. Craft messages that directly address the unique concerns of each stakeholder while keeping the overarching message consistent across all platforms and channels.
Consistent and targeted communication is especially important when one of the companies might already have a tarnished image. For instance, when Microsoft recently acquired game developer and publisher Activision Blizzard, Blizzard was struggling with the public perception of its CEO, Bobby Kotick. Microsoft and Blizzard actively highlighted the acquisition's positive aspects while reassuring consumers and investors about Kotick's continued leadership at Blizzard. They also clearly outlined the measures they are implementing to address and resolve past issues.
Solid internal and external communication
During mergers and acquisitions, companies must communicate effectively and equally both internally and externally to maintain trust and stability. Neglecting either group can lead to significant challenges, making balanced, transparent communication a critical factor in the success of the transition.
For internal stakeholders like employees, consistent and transparent communication is vital, particularly from the CEO, to address employee concerns and maintain morale. This approach helps manage the uncertainties and changes accompanying mergers, ensuring the workforce remains informed and engaged.
External stakeholders should also receive routine communications, including investors, the media and consumers. Press releases are often the best way to provide information to both the media and the public, but it's also worthwhile to cultivate relationships with media personalities in your industry to help with further positive coverage. Communicate with investors directly whenever possible, especially if significant changes occur. Regular personal emails from key internal stakeholders will keep investors feeling good about the merger.
Transparency drives trust
Without transparency, there can be no trust. And trust is essential in mergers and acquisitions. Your customers want to trust that they can continue to buy from you, your employees want to trust that you will continue to meet their needs, and investors want to trust that your organization is making good business decisions that will pay off in the long run.
Develop a strategy around timely and open communication with each of these segments, and stick to it. You can conduct live sessions, whether online or in person, where stakeholders can ask the leadership team questions and get answers to their concerns. Create an online FAQ hub, particularly for merger-specific questions, and update it regularly. Offer Q&A sessions exclusively for employees. These could be an online all-hands meeting or a more informal "open office" session with the CEO.
When problems arise, face them head-on with honesty. Better yet, before any issues arise, create a plan for any that could occur, and have a communication strategy already in place. Anticipating and discussing these challenges openly will help build trust and respect.
One famous example of a merger that fell apart because of a lack of transparency and honest communication was the attempted merger of Daimler-Benz and Chrysler in 1998. The companies faced cultural clashes and weren't aligned strategically; unfortunately, neither communicated these challenges to key stakeholders. Not only did the merger fail, but both companies took financial losses and hits to their reputations.
Success beyond the merger
While the immediate merger period is currently top of mind, planning should already be in place for long-term reputation management. Before the merger, conduct a brand audit for all organizations involved, closely examining values, messaging and promises to consumers. Identify both commonalities and differences and then work together to develop a post-merger brand identity that resonates with the customers of both organizations.
Change is inevitable in a merger, and it is essential for both teams to communicate this clearly. Develop a story around the evolution of both brands that helps set expectations for internal and external stakeholders. Demonstrate how the merger enhances the capabilities, values and commitment to the customers served. Communicate this information on a range of channels, including social media, press releases, company blogs and internal employee communications. Ensure that your message is both consistent and transparent.
Empathy and understanding
Everyone affected by a merger has their hopes, goals and concerns.
Actively addressing the emotional and practical concerns of stakeholders will help portray your organization in a positive light during what can sometimes be a tumultuous time. And remember — transparency is key. The truth will always trump false reassurances.
Some fundamental issues to address include:
Job security: This will always be top of mind for employees. Be honest about these practical concerns. Will some people be let go? Will benefits packages change? Communicate on these topics clearly and with empathy for anyone who may be put in a difficult situation.
Service disruptions: Do you anticipate any potential changes to service or product delivery during the merger? If so, be clear about the details. Letting people plan ahead builds trust and will keep customers loyal.
Financial stability: Your investors want to know that this merger will provide a solid return on investment. To keep investor trust high, provide clear and frequent communication about any financial changes, especially if something unexpected occurs.
Empathetic, honest and open communication can make or break a merger or acquisition. Create and execute a smart and strategic communication plan to help guide your company, customers, employees and investors into this new era so everyone can reap the benefits of this new partnership.