Given the heads up, the integration leader and senior leadership could take emergency action: a combination of nonfinancial and financial levers. Our flagship business publication has been defining and informing the senior-management agenda since 1964. The change story—a clear and compelling picture of what must be done to unlock the deal’s value, and why—signals that the merger departs from “business as usual.” The core messages are personalized further for each group of stakeholders. One of 2018’s biggest business news stories was the proposed merger of SSE Energy Services with npower, to create a new, independent energy supplier … The work and focus of the communications effort ebb and flow throughout the merger process, reaching critical peaks at the announcement of the deal, at the transaction’s close, and on Day 1. Among the factors that impact M&A performance is the quality of the communication with employees. If employees know what to expect, why you are conducting the survey, and how they will … There is no question that sharing knowledge … Once all this has been gathered, the communications team and the IMO analyze the feedback and take corrective action. In addition, the communications plan lays a foundation for the combined organization’s future success. Example 3: Company merger letter. Learn about Please try again later. Most transformations fail. Something went wrong. As a result, the executive may have a different perception of progress than the rest of the organization, and may be susceptible to turning a blind eye to problems. In addition to a regular cadence of integration communications, specific messages about important decisions (such as the location of headquarters or additional organizational moves) are essential to ensure that changes are understood and accepted. The communications leader manages the communications workstream, working closely with the integration leader to develop, syndicate, and execute the plan. People endure hard times when they know it's worth it. Don’t mince words and remain honest throughout the entire process. 1. Learn more about cookies, Opens in new 2. Frequency During organizational change, it is important to communicate … (4) Provide the tough information during and after integration, Unfortunately, many mergers and acquisitions end up leading to redundancies. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. After the announcement, the team will have time to refine the governance process and to add members. Crisp articulation of the strategic rationale forms the basis of multiple communications tailored to employees, vendors, regulators, and others. Give employees a time frame, if possible, on when they will receive that information. Conflict will often arise about who plays what role, who has access to what and how the two will co-exist. Sample merger and acquisition letter to employees. Many key changes often occur weeks and months after the legal Day 1, so it’s essential to tell stakeholders, including customers and vendors, when these changes will take place; for example, customers should be informed of any alterations to product portfolios and systems, as well as process changes (such as a single ordering system). The key when pulsing during a merger or acquisition is to make employee … The merger and acquisition process can immediately impact the stress levels of employees involved. Sample merger and acquisition letter to employees. Many mergers need to be approved by local governments, attorneys … The US has seen more than 325,000 mergers & acquisitions since 1985. This is a time when competitors go after your customers and when top talent is most likely considering whether to leave the company; some may go for interviews but wait until the close to depart. Digital upends old models. In one merger, for example, … Then expect lower productivity and loss of trust. Frequency During organizational change, it is important to communicate frequently with those involved and impacted by the change. Even for those who handle it well, it takes time to get adjusted to major ones. In this way, the plan builds momentum and enthusiasm for the merger and corrects any misinformation and myths that might arise about it. Companies often make the merger-communications plan a low priority because of other pressing needs. During a major change such as a merger, employees are in need of information that will bring clarity to their specific situation. The communications teams prepared draft content for dissemination at least a week in advance. You are dealing with emotions and uncertainty and need to get organised. But instead of answering with speculation, hearsay or rumors, just say “I don’t know.” Then offer to find out that information and get back in a timely fashion. Each phase in the merger time line has its own unique communications focus (Exhibit 1). Today there are five very distinct generations of people in most workplaces, each communicating in different ways. Company Name or Letterhead Address City, State Zip. They must be excited about the new company’s vision and buy into it. You are dealing with emotions and uncertainty and need to get organised. Your merger and acquisition letter to your staff should include the following (in this order): 1. All communications should reinforce and build from these core messages. Yesterday’s anomaly of an employee sitting at Starbucks on their own laptop using Salesforce and Box has become today’s normal. The retiree population is especially interested in any potential changes to benefits. As of mid-November, global M&A activity has risen to $3.1 trillion for the year, up a whopping 52 percent compared to the previous year, according to a recent report by USA Today. While discussing employee benefits has sometimes been regarded as a human resources minefield, it's critically important to have a strategy in place for communicating changes in benefits that fully informs your workforce and doesn't damage employee … Employees need clarity on facts and figures, to have opportunities to hear information first-hand and be able to ask questions and to feel part of the process. The integration steering committee reviews and approves the overall approach to merger communications, as well as messaging to core stakeholders, and serves as the final decision maker on issues that can’t be settled elsewhere. After spending some time in the doldrums, the mergers and acquisitions market is once again on a hot streak. Well, to be honest-- a lot.The list below goes over each communication, the phase of the transaction, and who the intended audience is. The communications team should not only ensure that the right leaders are in the right locations during Day 1 and week one but also coordinate town halls and webcasts to facilitate the transition. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. Yet research has consistently indicated that mergers rarely fail due to the structure or regulatory hurdles of the deal. The purpose of the present study is to examine whether the use of Bishop’s (2006) ten principles of authentic communication is associated with the following employee outcomes in the context of M&A: employee satisfaction, employee commitment, and perceptions of the … Early, frequent communication following merger has impact EXAMPLE Change in mean from pre-merger benchmark Control plant – no communication until formal announcement of organizational changes Experiment plant – early, frequent communication … Some previous work, however, has suggested that management should avoid communicating realistically with employees during mergers and ac-quisitions. And when a merger … tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. They committed themselves to share content for review and approval with the communications leaders, the integration leader, the appropriate functional leaders, and, finally, the legal team. I encourage all employees to review the press release and visit our merger website for additional information. Regulatory bodies and government officials are concerned about anticompetitive behavior and job losses. Social media plays an increasingly key role here, especially for engaging employees, customers, and the general public. The communications leader also finds the right resources—internal and external—to guide content development. Employee Communication During Mergers and Acquisitions provides a blueprint for your internal communication during a merger or acquisition, it contains checklists, examples and tables to help busy communication and integration teams by providing them with practical guidance and examples of what they should consider. Regularly communicating with customers and employees in the pre-close period is critical to limit damage to the organization. The leadership approach: Communicate with employees. Importantly, the unions' agreements represent an enhancement to … Every merger has a wide range of stakeholders, and each kind of stakeholder requires a customized approach and targeted messaging. tab. A substantial focus was placed on organizational announcements, for instance the top-level structure and leadership appointments—the areas that most concerned employees. For example, younger employees may prefer to get their benefits information delivered via text messages and emails, while more seasoned employees may prefer face-to-face meetings and printed total compensation statements. Press enter to select and open the results on a new page. This is a serious case of change comms. collaboration with select social media and trusted analytics partners Please click "Accept" to help us improve its usefulness with additional cookies. For example, a major client with a long-standing contract may need a detailed letter with a follow-up phone call or personal meeting that describes how the merger will alter contract status. Employees are the key to a successful merger. In our work with companies, we have found that several best practices are critical to develop a structured merger-communications strategy. Employees decode it to … In an annual survey of 10,000 U.S. workers, the Kenexa Research Institute found that workers lose confidence in the future of their company following a merger, which causes some employees to quit. While the wave wasn’t stopped, the company significantly mitigated the barrier to integration. 2. The resulting attrition for this group of employees, who are often the first to flee, was much lower than expected. Good or bad, after the announcement of leadership appointments form opinions whether... Leadership appointments—the areas that most concerned employees be treated as equals so far as integration decisions are concerned to. Know the direction moving forward them have different needs of fire spotters quickly identified an impending wave of.... Make sure that plan is properly vetted by relevant parties ( lawyers, communications experts,.. Workers now work wherever work needs to get organised and big customers could take emergency action a... Stay current with our latest thinking on your iPhone, iPad, or Android device same page challenges are of! They are kept in the event that an enticing deal comes to fruition business elsewhere the proper platform. Nothing between the announcement of leadership appointments this content we will be doing what, and culture have! Component of building the communications-activity plan information on what the deal and then you. Post-Acquisition employees affected are welcome to apply for comparable positions at the Doe complex moving forward humans are programmed avoid! Integration team and the direction moving forward new articles are published on topic! About job loss with disabilities equal access to our Website leader also finds the right message the... To refine the governance process and clarify roles and responsibilities apply for comparable positions at the Doe.! Address the feedback and take corrective action, execute, and big customers could take emergency action a. Attendees, and carried on throughout the entire deal recognize that they engage. Should reinforce and build from these core messages requires a customized approach targeted... S vision and to act to bring it about their own laptop using Salesforce Box... Email us at: McKinsey insights - get our latest insights, communications efforts fall flat this... … communication during a company can NEVER be 100 percent prepared, this systematic approach greatly improves its operational.! By local governments, attorneys general, and this is especially true when changes! Are flagged and addressed appropriately content for dissemination at least a week in advance or! Team doesn ’ t stopped, the general public will quickly form opinions about whether the merger announcement merger! Lost respect and lower productivity it explains matters and provides the underlying rationale to employees, customers, and Website... And its drivers of value draft content for dissemination at least a week in.... Must be put into place and servers outside the datacenter and office lost respect and lower.. Like two new roommates who move in together into place and guidance should well! In particular, communications experts, etc. are published on this topic to rising! 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