Keeping Everyone In the Loop
Want to enter a market quickly, expand market share, or acquire and established brand? The first phrase that comes to mind is mergers & acquisitions.
That can be a quick way of accomplishing your company’s goals. But mergers are often difficult – a frequently used term is the dance of the elephants – and success or failure can depend on keeping all stakeholders informed about what’s going on, when it’s going to happen and what you expect from them.
Whether you are the buyer or the seller, rumor mills work overtime so it’s important to control the flow of information going to internal staff members and external observers.
1) Employees & Unions
Employees and unions want information and reassurance about job security, potential attrition, layoffs, changing working conditions, benefits and any effect the transaction will have on their stock option plans. The uncertainty surrounding mergers and acquisitions can create a lack of enthusiasm, poor work quality and lost customers. In addition, if you don’t communicate effectively and openly, your company may lose employees and top managers who decide not to wait around.
What Employees Want to Know
Mergers & acquisitions add stress and uncertainty to employees’ lives. Keep them concentrating on their current jobs by meeting their questions head on. Among their concerns:
- Will there be layoffs?
- Is my job safe?
- Will my duties change?
- Will my pay and benefits change?
- Will jobs be moved elsewhere?
- How will we handle overlap?
- How will we handle increased responsibilities?
2) Customers & Suppliers
Customers and suppliers want to know that their supplies and contracts won’t be disrupted. They may also want to know what additional products or services the merger will bring about. Train employees to answer expected questions. Customers and suppliers may doubt that their needs will be fulfilled and start looking elsewhere. If they disappear, revenues will decline. Keeping them informed encourages continued relationships.
Shareholders in publicly traded companies need a compelling explanation of how a merger or acquisition will bolster the bottom line and the stock price. If they don’t get satisfactory answers, you could see a lot of selling activity.
After your company announces a planned merger or acquisition, expect to be in the limelight for quite some time. Plan ahead to deal with the fallout.