M&A

Getting M&A communications right: Interview with Leslie Benson & Edward Bridges

Many companies often wish they had communicated differently during M&A integrations – sharing updates and engaging more frequently and openly with employees particularly, as well as customers, suppliers and shareholders. But how can companies communicate effectively before core decisions are made? What do the most effective communication programmes look like, and how can companies execute well?

We sat down with FTI’s Leslie Benson & Edward Bridges to discuss how business can get communications around a M&A right.

Q1. How important is it to have a comprehensive communications plan throughout the M&A lifecycle? What factors determine whether such a plan should be customised or started from scratch?

Edward: In an ideal world, any business involved in an M&A transaction would like to be as transparent as possible but often that can’t be the case due to confidentiality and/or regulation. Beyond shareholders and debtholders, those most likely to be affected by an M&A transaction are employees and customers:  What does it mean for me, the services I provide to and consume from the businesses and should I be worried?

And life isn’t always simple. Planning for leaks and other scenarios is important.

Most of all managing expectations is critical. Effective communication is as much about why you can’t tell stakeholders everything as it is about providing information in a timely manner.

Companies and communications functions often miss the point that it’s as important to be seen to be communicating as it is what you are telling stakeholders.

But beyond the transaction itself, planning for the integration of the businesses, across product and service lines, corporate functions and, specifically, sales and R&D is the major strategic objective and value driver of any deal and the key to making that happen is communication. If a business’s people don’t understand the rationale, the integration plan and their specific role in driving the business forward, it’s likely employee and corporate performance will fall and with it, the value proposition of the transaction.

Playbooks are fine – but no-one situation is the same as another.  A tailored approach is vital, one that recognises the opportunities, is sensitive to corporate culture and aligns with the combined businesses’ strategy and corporate purpose.

 

Q2. What are the key components of an effective M&A communications strategy and plan and how should these be distributed? How important is it for communications to be consistent and not overwhelm employees?

Edward: Some comms, sales and marketing functions may have never experienced a deal before and in our experience, that can lead to over-thinking the communications planning. In addition, leadership teams may not have experience of transformational deals. Consultancies like FTI Consulting, BAIN and McKinsey are often brought in to advise on deal and integration strategies, but only a communications agency can help put that into action and provide focus on what’s important to getting stakeholder behind a deal. A classic example:  a large consultancy provided a mid-cap UK business with an integration plan that ran to no less than 550 lines of actions that needed to be undertaken. The effect on the client was predictably unproductive. So, it’s important to set strategic priorities and then assess whether these are achievable with the resources to hand and if not, either scale back or hire external help do execute it.

As far as employees are concerned here’s the golden rule: don’t promise to communicate and then fail to do so.

Explain why you are communicating, what the restrictions are and the likely pace of that communication over the lifetime of the deal. Then provide feedback mechanisms that can address issues as they arise and avoid “water cooler” chat driving sentiment.

 

Q3. Can you outline some of the challenges, such as supplier onboarding or a negative reaction by employees of the acquired company, that may arise during an M&A transaction? How should resistance to the process be dealt with? 

Leslie: A simple way to consider the reactions of ‘acquired’ employees is through two complementary lenses: what are people’s needs as individuals, team members and citizens of the company being acquired; and how do we help them transition through the change as individuals. Two simple realities: leaders need to recognise that the failure to meet the most basic needs will hinder the extent to which employees sign up; and to the extent that leaders fail to recognise and facilitate the personal, emotional shift all employees experience, so curiosity, natural anxiety and a little apprehension can turn to active resistance, which will spell difficulty for retention, productivity and cultural integration.

So basic concerns need to be addressed early and first. Will I have a job? Will my employment T&Cs change? What will happen to the team I am in and the environment in which I operate? Will I be able to do my job better in the new company? And from hygiene factors to pride – will the acquiring company respect our legacy… help me shift my pride, loyalty and career ambitions to the new environment.

A lack of empathy in responding to any of these questions can spell doom.

The reality for most is that they will need to tread their own path to accepting and committing to new world.

Giving them space to express their concerns is not giving voice to resistance – rather, if well managed, helps them over the hump of concern that some many feel. And that requires leaders to be optimistic, fair, consistent, practical and to show they care!

 

Q4. What final piece of advice would you give to communications teams in terms of constructing a robust communications plan and effectively distributing it throughout the entire company?

Leslie: In the words of Mohammed Ali, not many fight strategies survive the first punch! So, what makes merger integration communications plans robust, resilient, agile and consistent?

Prepare your leaders well – practice makes perfect… and getting them to tell the story authentically and engagingly is critical. Ensuring that you’ve got the Q&A covered, updated and available, tailored authentically to different audiences’ needs (in language, tone and detail) is key – with the right data analytics in place so that you can work predictively to course correct as you progress. Ensure that your channel and stakeholder analysis and use account well for in-person, social and the informal’ and the greater the sense of dialogue, the more likely it will be that staff feel and act like participants rather than targets.

Which in turn requires 3 additional essentials:

  • Ensure you’ve put in place a robust change management approach to frame your communications…. With the requisite sponsors, agents, champions and advocates ready, supported and in play.
  • Double down on enabling managers at the rockface to contextualise what they’re hearing for their teams and direct reports (few townhalls have an impact if the conversation immediately afterwards with the manager or coach is dissonant or ineffective) …
  • And finally: your communications plan is also an enabler of the emergent culture – if you’ve not identified how you want to drive that, you’ll experience culture by default rather than by design.

 

Q5. What do you foresee as the key challenges facing M&A communications teams in the years ahead, particularly in a world slowly emerging from extensive pandemic-related disruption?

Leslie: To the extent that mergers result from companies acquiring distressed assets impacted by Covid-19, so communicators will need to take careful account of how, through that merger process, employee anxiety and personal concern are channelled into confidence and a sense of commitment in a joint future. Of course, the need to address, as we described earlier, the need for security and belonging will apply variably to mergers of sorts where synergies go well beyond survival and cost efficiency.

Beyond these issues, two likely challenges will emerge for M&A communications teams. We’re seeing the first loom larger than before: the pandemic, along with ‘Black Lives Matter’ and the ‘Me Too’ movements have ignited a greater need in organisations to engage and unite employees around purpose, values and the promises acquiring companies make in respect of ESG. That will require a more thoughtful alignment of individuals and teams with the acquiring company’s organisational drivers.

The second challenge is likely to be one of building loyalty, retention and productivity.

Covid-19 has brought the future forward to the extent that we are likely to see many companies working on a more hybrid basis. That evolving reality will play heavily into communications planning through M&A.

And from messaging to channels and to communicators themselves – focus on inclusivity, securing loyalty from people working in disparate environments and enabling and uniting them to interact and engage effectively through change will most likely become essential ingredients.

 

The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.

©2021 FTI Consulting, Inc. All rights reserved. www.fticonsulting.com

Related Articles

January 14, 2022

FTI Consulting News Bytes – 14th January 2022

Welcome to FTI Consulting News Bytes – a roundup of top tech stories of the week from FTI Consulting’s TMT (Telecom,...

January 13, 2022

FTI Consulting Public Affairs Snapshot: To CBDC or not to CBDC?

The Mesopotamian shekel is often cited as the first form of money, initially representing a specific weight of barley, a...

January 13, 2022

ESG+ Newsletter – 13th January 2022

Your weekly updates on ESG and more Greetings from 2022! Our first ESG+ Newsletter of the year starts off with a review ...