Surviving the M&A

Open, honest communication – even if the news is bad – goes a long way in helping employees through mergers and acquisitions
By Sandra Gabriel
|Canadian HR Reporter|Last Updated: 10/16/2008

Corporations enter into mergers and acquisitions in an effort to grow the company, acquire clients or increase profits. While M&As may result in greater market share for these companies, it’s important to be aware of the employees’ perspective.

M&As can be a time of confusion and uncertainty for workers, reducing employee morale and threatening the success of the M&A.

“Potentially dangerous things could be happening that you’re unaware of, not anticipating, or even ignoring on the employee level,” says Dan Stockdale, author of

Helping Employees Through a Merger or Acquisition

.

Build a change management team

The change management team should include management from multiple levels across all functions in the company. Some of the most important members of the team will be from HR and communications. If the company is large and multi-faceted, each department head or supervisor should be on the team.

“Top-level and mid-level management must be directly involved in and assume responsibility for communications up, down and across the organization,” says Deborah Barrett, author of

Change Communication: Using Strategic Employee Communication to Facilitate Major Change

.

Develop a plan

The change management team should develop a strategy of how and through whom information should be filtered to employees. The following questions should be addressed:

• Who are you communicating to?

• What are you communicating?

• Where will communications take place (face-to-face, through e-mail, voice mail, meetings, conferences, webcasts, personal letters)?

• When will you communicate?

• Why are you communicating?

The plan should clearly outline who will be the key contacts for information in each department and where more information will be available for employees, such as the company’s intranet or newsletters. The team should also create a strategy to measure how effective the plan is and make adjustments and improvements as needed. The team may also wish to appoint “opinion leaders,” an employee in each department who has influence over other employees and who will assist the department head with easing employee anxiety.

Communicate, communicate, communicate

Think of uncertainty as the enemy. If employees are uncertain, they cannot and will not perform to their fullest potential. It is important to foster ongoing, consistent communications before, during and after an M&A to avoid uncertainty, maintain employee commitment and help employees through the process.

A 1998 report by Hewitt Associates,

Mergers, Acquisitions and Joint Ventures: Critical HR Success Factors

, found communicating with employees early, often and honestly is considered essential for M&A success, with 57 per cent of organizations surveyed identifying employee communication as a critical contributing factor to the success of the transaction.

In her book, Barrett highlights five primary goals for effective employee communication during major change:

• Ensure clear and consistent messages to educate employees in the company vision, strategic goals, and what the change means to them.

• Motivate employee support for the company’s new direction.

• Encourage higher performance and discretionary effort.

• Limit misunderstandings and rumors that may damage productivity.

• Align employees behind the company’s strategic and overall performance goals.

Employers need to be honest, open and upfront about the entire process and the resulting fallout. Even though the news won’t always be good, employees will appreciate the honesty.

But employers shouldn’t do all the talking. Acquiring feedback from employees through surveys, focus groups, one-on-one meetings or a comments section on the M&A page of the company’s intranet can help employees feel they’re being listened to.

Be sure to stay well informed of the thoughts, ideas, challenges and concerns of the employees. This will enable the change management team to better construct messages that respond to employee needs.

Recognize the efforts of those who go above and beyond the call of duty before and during times of change. Recognizing and rewarding excellence in the workplace will motivate employees and keep them committed to improving their performance, even during uncertain times.

Sandra Gabriel is president and CEO of SG PR Consulting in Toronto, a firm offering consulting and communications services to businesses and entrepreneurs in the Greater Toronto Area. She can be contacted at sandrangabriel@hotmail.com.

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