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communicating merger to employees



Employee loyalty and trust are at stake. Frequent communication reduces uncertainty and maintains a trusting relationship with employees. hbspt.cta._relativeUrls=true;hbspt.cta.load(99128, '4d51893c-9f5c-4e98-aad0-61f0e791b4ed', {}); During a merger, employees can experience a range of emotions. Whatever the case, share it with your employees so they understand your goals for these changes. How can I improve the productivity of workers? Giving employees a voice A merger or acquisition could easily go one of two ways for employees: it might offer opportunities for growth, or it could introduce redundancies and lead to layoffs. When two companies' philosophies and values do not match (known as culture clash), M&A deals often fail. The second task in mergers—adapting to changed operating models, such as new structures, processes, and governance—poses some of the most visible and difficult issues for employees. Communicating merger to employees open and honestly is the most important thing that you can do. A strong merger communication strategy is essential to control rumors, retain talent and boost employee morale while the merger is underway. Integrate the employee communication strategy with the communication strategy for other stakeholders—customers, suppliers, government leaders and the community. Crisp articulation of the strategic rationale forms the basis of multiple communications tailored to employees, vendors, regulators, and others. It will also turn potential office bullies into leaders and change agents. Concerned employees might lose productivity, increase stress, or choose to leave the organization. Want help communicating this big change? 4. The announcement of merging companies is usually kept private until the m&a deal is signed. 2. When executive teams fail to acknowledge change, it can be difficult for HR to align and engage employees. After a merger, HR leaders are often tasked with developing an internal communication strategy. Major HBR cases concerns on a whole industry, a whole organization or some part of organization; profitable or non-profitable organizations. Mergers create organizational anxiety about the future. A merger or acquisition can signal a need to refresh your resume. Evergy has a very distributed workforce, with linemen out in the field, engineers who are always on the go, and a younger generation of new employees who want to be communicated with differently than older workers. A good communication plan should be established before the deal is finalized, and carried on throughout the process. The leadership approach: Communicate with employees. One positive way to do this is to establish a company culture rooted in honesty and openness, which can allay employee anxiety during a potential company sale. During a major change such as a merger, employees are in need of information that will bring clarity to their specific situation. A leader at one of the organizations was exceptionally good at communicating how individual employees would benefit from the merger. This is a communication task. Staying human during these times could be the difference between failure and success. Mobile Wallet Guide: Google Pay vs. Apple Pay vs.... You no longer need to carry a bulky wallet filled with numerous... How to Prepare for a Change of Leadership. Reason for the merger or acquisition 4. You want them to feel heard and valued, not left in the dark. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” It should add clarity, not confusion. Take Care of Employees. 1 Too often a company will focus on communicating a merger or acquisition to such external constituencies as the media and Wall Street analysts. Secondly, communicating efficiently involves sharing information with key audiences in a timely fashion. Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. Example 3: Company merger letter. Sammi Caramela contributed to the reporting and writing in this article. What is the best project management app you are using? What will you achieve in merging with this other company? Leverage frequent communications and continuous listening strategy to address new questions or concerns. Your communications teams should create a strategic plan to convey the values and vision of the newly joined organization. According to Deloitte's 2018 M&A Trends Report, this was not surprising: "Corporate and private equity executives foresaw an acceleration of merger and acquisition activity in 2018.". Information on the specific business being merged or acquired (What do they do? 2. It is important to spend time reviewing all of these considerations before announcing because of the importance of your transaction being successful in the long term.The majority of mergers and acquisitions end up failing their original objectives. Make ambassadors out of those who hold valuable information and can help you grow the new brand. Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. A merger or acquisition? Do we have a timeline of milestones and updates? But depending on and supporting teammates impacts employee engagement. Employee survey questions to use post-merger or acquisition 4. place in the post merger phase. Outside of profit and market share, one desired outcome of a merger is to build a unified culture. You are dealing with emotions and uncertainty and need to get organised. Who should make the announcement, and what communication channels should they use? These all reflect the main goal: to ensure that the right message about the merger is communicated consistently. Intentional and consistent messaging can cultivate a unified company culture. There should also be a contingency plan in place for unexpected events. The change of scenery can decrease anxiety and increase humility. Your merger and acquisition letter to your staff should include the following (in this order): The first part of your letter should be the announcement of the merger/acquisition. Communicating the shared vision and goal of the transaction will help employees and other stakeholders to understand and accept the deal. Open communication can facilitate post-deal success and long-term profitability. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. Communication challenges are one of the top factors that cause company synergies to fail in mergers and acquisitions. After all, your m&a process will only go as far as your people will take it. The Best Employee Scheduling Software of 2021. Some employees may loathe, be hesitant, or downright resistant to the change. Sudden change disrupts employees from their norm and puts people on edge. As a result, pride can surface among those who are a part of the acquiring company. If you already have a solid, well-managed communication process, use it. Clear, continuous and consistent communication to the employees led to clarifying union doubts and resulted in a successful integration. Do we have a central FAQ document for managers? Communicating the shared vision and goal of the transaction will help employees and other stakeholders to understand and accept the deal. When employees are focused on themselves, productivity comes to a halt. This makes it challenging for employees to mentally prepare for change. Corporate reorganizations, mergers and acquisitions affect employees, customers, suppliers and vendors. Employees have to be persuaded to believe in the corporate vision and to act to bring it about. Consistency is key to unifying a company. Timing is critical, with small windows to conduct due diligence and communicate any changes to employees, shareholders and customers.Then there’s the actual work of merging two organizations. Write clearly and openly about how the merger will affect their day-to-day operations. The objectives of this email are to update you on how the integration of the two businesses is progressing, to explain what integration challenges lie ahead, and to highlight how you can continue to help the company deliver on its potential. Good communication practices in the post-merger period are: Recognize that all merger goals depend on communication. Empathy for employee needs breeds the help you need to manage change. 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 during planning process Stress – 9% less Uncertainty – 22% less Intention to remain – 6% higher 4 5 6 4 3 3 5 Mean Mean Mean 2 2 M Listen to why Lindsay’s first duty is to understand the new audience, and what a good communications blend that drives business results and motivates employees looks like. You need to inject accurate information throughout your workforce. Executive teams who appear divided and unaligned foster unhealthy and disengaged cultures. After the deal closes, internal communicators need to maintain the momentum, minimize culture confusion and work to improve employee morale. Uncertainty due to poor communication will not only lead to time-wasting rumors, it will also impair employee engagement, reduce motivation and work quality, and ultimately impact the company's bottom line. Researchers have found that frequent and open communication is central to post-deal integration and value creation. Communicating with employees, empowering them and creating a culture for them to thrive are all fundamental parts to integration. This can cause panic if they aren't getting the answers they need. You can’t keep individuals from trying to gain the upper hand. What do they sell?) Now that you know what to include in your letter, here are some great samples to follow: Mergers and acquisitions can be great ways to accelerate growth, but when they fail to produce the desired result, a common factor is poor communication, including a lack of information during the pre-merger period and a lack of post-merger cooperation and coordination. Communicating changes to the employees. If you are downsizing, then you know the anxiety it produces among employees and the way it impacts morale, productivity, and customers. Business leaders need to focus on effective communication and improving the employee experience. As a result, excitement about the future and long-term engagement can be difficult to maintain. Don't forget to communicate early as well as more often after the deal is signed. It's now been three months since we completed the merger to form (company name). One positive way to do this is to establish a company culture rooted in honesty and openness, which can allay employee anxiety during a potential company sale. 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 with around 11 million customers for listing on the London Stock Exchange by Q1 2019 here in the UK. Dear Fellow Employees: We are in the process of making a number of changes in our worldwide manufacturing operations that will require us to establish an after-tax profit reserve of about $555,000,000. If there is a lack of proper communication during the merger process that can also lead to failure. Address how the merger will affect employees directly. The announcement of merging companies is usually kept private until the m&a deal is signed. When employees part with meaningful aspects of their work, it’s easy to understand the impact on psychological health. A merger is a time of uncertainty and risk ….. Employees may leave Customers are worried Market / Shareholders may react negatively Competitors attack : people & business Productivity / revenues often decline …..Communication is essential to focus the organization & to help mitigate these risks 3 5. Individuals who stick to their "old ways" may hoard knowledge and become condescending toward other team members. Why survey after a merger or acquisition? Here are four reasons why you should control the flow of information and develop a thorough employee communications plan before a merger or acquisition. Including an employee survey in your post-M&A plan is another way to keep the lines of communication open, and demonstrate to people that their feedback is important. The onus should be on those employees who will be directly affected by the change, and managers need to be very aware of the vibes in their departments. Employees have to be persuaded to believe in the corporate vision and to act to bring it about. Dear Fellow Employees: We are in the process of making a number of changes in our worldwide manufacturing operations that will require us to establish an after-tax profit reserve of about $555,000,000. Transaction effective date 3. How should we communicate the purpose of this change. 5. Only after the news is out does management turn its attention inward, usually relying on the more traditional channels for informing employees. Too often a company will focus on communicating a merger or acquisition to such external constituencies as the media and Wall Street analysts. merger or acquisition. should focus on areas of particular concern to employees during mergers and acquisitions, such as layoffs and changes in pensions, work rules, and com-pensation (Ivancevich et al., 1987). Ways to prepare and support your employees 5. Here are some common emotions and leadership approaches to begin communicating a merger to employees. Address anxiety. 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. Pride from the “old regime” can create division and stifle learning opportunities. Employee morale will take less of a hit if they feel they are kept in the loop. Using Lean Strategies to Achieve Team Synergy and Efficiency, From COVID-19 to Hurricane Season: Disaster Preparedness for Small Business, Your Guide to Creating a Small Business Marketing Plan, How to Make Money in Retirement: A Guide to Turning a Hobby into a Side Business, The Best Employee Monitoring Software of 2021. There are a large number of distractions that can make it difficult to handle mergers successfully. Date. Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more. In 2010, PWC conducted a survey on companies that had completed mergers and acquisitions. However, being open with those involved in and impacted by the organizational change is imperative. This will help you create measurable touch points for employees to share their knowledge. Mergers and acquisitions will continue to be key strategies for companies looking to grow market share. The initial announcement will be responsible for letting your investors and employees know that you are currently working on closing a merger or acquisition. M&As can be long, complex processes. How to communicate with employees through a merger. This can stall or prolong essential job training and onboarding. Business communication is crucial for every company’s success, and this is especially true when big changes are happening. Communication should be constant and delivered in a variety of ways such as email, FAQs, meetings, a dedicated website, videos, conference calls, town hall meetings, etc. When it comes time sell your company, one of the toughest issues is communicating the process to employees. Remember that your employees will want to know more than the details of the merger. Also offer reassurance where you can. That same month, AT&T acquired Time Warner for $85 billion. This can create a flood of questions including: Employees crave stability. Since employees often feel blindsided when a deal is announced, company leaders and other internal communicators can minimize the negative impact of M&A by creating a proactive communications strategy. For instance, maybe you're looking to increase your customer reach, or perhaps you want to diversify your operations. Example 3: Company merger letter. The basic problem is that companies often can’t announce these changes early in the merger-planning effort. For entrepreneurs, business owners and C-suite executives, a rise in M&A activity means they could be part of a deal in the near future. During a transaction, your company culture will be affected whether you want it to be or not. 1. Company Name or Letterhead Address City, State Zip. If employees are kept in the dark or lied to, even unintentionally, many will choose to leave. Goals, impacts, and new objectives of this transaction 5. When it comes to mergers and acquisitions, don’t communicate for the sake of communication. To be successful, you need to help your leadership team understand the impact on employees during mergers and acquisitions. Brainstorm team building activities outside of the office. But the phrase gets misinterpreted. Before long, however, as systems and processes are overhauled, those employees realize they have been fed a “party line.” 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. Communication during these times is a powerful tool that can help keep your employees engaged during difficult times. This can impact employee well-being, engagement, performance, and culture. Harness a Proven Methodology to Keep Employees Engaged. Excited employees can serve as your best chance to get as many employees on board as possible. Below are some helpful guidelines for communicating during a merger and acquisition: Adequate communication is essential for a successful merger and acquisition: A communication plan should be developed to show employees they are respected and valued throughout the process. Naturally, your employees' first question will be whether they still have their jobs and how their roles will change. At communicating how individual employees would benefit from the “ old regime can... ' loyalty and trust the many joys of being an internal communication plan consider! In most courses studied at Harvard business schools, students are provided with case. A major change such as a result, pride can surface among those who valuable! Empower your biggest advocates by encouraging them to become ambassadors for change align. 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