Myth & Merger Part 2: Communication Makes A Difference

Your firm has decided to acquire or merge with another firm. The merger allows you to achieve a key business goal (dominate a market, expand to a new size, move into new territories, etc.) faster or less expensively than by organic growth. However, mergers have a disadvantage. Even the best possible acquisition will never exactly fit your business plans. A custom-built solution is always a better fit. Lets take an example, such as expanding into markets in Chicago and Los Angeles. If you acquired a firm with offices in both cities, that firm might also have a small office in south Florida, that doesn’t fit into your plans. Alternatively, the Chicago office might not be located in the part of town you would like. Perhaps, the LA office isn’t large enough for your expansion plans. And of course, there are always individuals in the acquired firm that you wouldn’t have hired.

It’s that last point that interests everyone on both sides of the merger. They know that there are going to be changes in personnel. As a change manager, you can see the possibility of improvements; the rest of the staff is focused on winners and losers. To be fair, some individuals will win (promotions, new group heads) and some will lose (changes in roles or compensation, layoffs). The vast majority will see little personal change, but some will feel passed over in the new structure, or feel that they should have been considered for a more important role. The merger must create some changes if it is to produce a benefit to the new organization, making some unhappy individuals… unavoidable. Still, you can take steps to minimize internal friction and get more of your staff to contribute positively to the merger. The key is communications!

When your firm committed to the merger, your executives spent a lot of time developing an external communication plan that would keep clients and investors informed. Was as much effort put into the internal communications plan for your staff? How will your staff be informed of the coming changes? How much information is enough?

As discussed in Part 1 of this Blog, you first need a clear and measurable merger plan. The key differentiator in executing that plan is how well it is communicated. There is no magic formula for how much to tell your staff, or which channel of communication works best.  How much you tell your staff and at what level of detail depends on: experience in previous mergers; the level of corporate information your staff currently receives, the channels you use to communicate corporate information, and so on. If you almost never provide business information to your staff, suddenly providing very detailed information in the middle of a merger can cause more problems than it solves. Let your culture guide you.

Once you decide what you want to communicate to your staff, here are a few issues for you to consider that can improve the delivery of your communications plan:

  1. Consistency: The level of detail and frequency of communications will vary from firm to firm, but each communication must be clear, concise, and consistent. Never commit to a weekly update, and then fail to follow-up. A sudden stoppage in information or a change in how information is delivered is more likely to be interpreted as an attempt to hide a serious problem, rather than just an individual who is too busy to communicate.
  2. Channels: You need to decide how to send communications to your staff… in person meetings, phone calls, video conferences, or emails. You also need to give thought to the communicator. A different message is sent if it is communicated by the office manager or by the CEO. Geography, organization size, and time constraints will limit how often the “big boss” can directly communicate a message, but carefully consider who will communicate each message.
  3. Changes: Few plans are implemented without change. However, when the staff sees changes, but the change are not discussed, official communications can become suspect.  When setbacks happen, or schedules are missed, or even when something fails… say so. Always be mindful of the method and style of communication, but ensure that the content reflects reality, both good and bad. Bad news tends to get out. but you can control how that information is received, if you are willing to talk about it.
  4. Assumptions: Many events will happen during a merger, including some that have nothing to do with the merger. There is a basic human need to turn bits of information into a story, even when there is no real story. Don’t just provide staff with information, give them an understandable narrative that they can follow and that gives information a context. Rather than, “We have completed 37% of the planned objectives successfully,” consider, “It’s been three months and we’re about a third into the plan, which should take 14 months to complete. Compared to past mergers we’re doing better than average and that should lead to exceptional bonuses this year.” When narratives don’t exist, your staff will look for clues, leading to speculation and rumors.
  5. Influencers: You can keep rumors in check by tapping into the power of influencers. We all know individuals with extraordinary access to information,  unique insight, or exceptional honesty. We turn to these “influencers” when we need an answer. Your staff already uses influencers to find out what’s going on, or when there are times of crisis. Get to know your influencers, and give them a role. If you don’t know who your influencers are, ask your staff! You can survey your staff, or just talk to them. Tell them you want nominations for representatives who will communicate information to the staff. Ignore self-nominations, and focus on who everyone wants to listen to.
  6. Winners: Who gets promoted, who loses control of a department, who leaves the firm: these are the “tea leaves” that give your staff clues to their professional future. A big clue is how meetings are merged. For example, when two IT groups are merged, you have redundant meetings. Which will you drop? Typically, the acquiring department (the “winner”) set the new schedule, often simply moving everyone to their meeting schedule. This may be more efficient for the new manager, but… resist, Resist, RESIST the urge to do this! Moving all meetings to the “winners” schedule sends a very negative message to the “losers”. It’s a lot more trouble, but it sends a positive message if both meetings are canceled and replaced by a new meeting… based on input from all attendees.

We know that 90% of communication is non-verbal. We respond to more than the overt content of communication: our tone of voice, body language and other non-verbal elements are more important. While there is less research on the importance of communications channels, the communicator’s influence, or consistency between communications, we know that these factors matter. With just a little extra planning you can overcome resistance, reduce rumors and get more people on board with the coming changes. At least, that’s my Niccolls worth for today!.

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1 Response to Myth & Merger Part 2: Communication Makes A Difference

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