Clear, concise and consistent communications are fundamental elements of a successful merger.
“To merge, or not to merge.” That is the question that companies often discreetly ask. These undisclosed, perhaps even taboo conversations, being done in the back room or over glasses of wine, seem to be happening at a steady rate.
In our firm’s experience supporting merging companies, the overarching theme we’ve encountered is that clear, concise and consistent communications are at the epicenter of a successful merger. Moreover, the cohesiveness of a strategic plan – and its actualization – must include safeguarding reputation as a paramount consideration.
Identifying the Big Picture
When analyzing and auditing a respective business to determine if proceeding with a merger makes sense, considerations include the strength of both companies’ balance sheets, cultural similarities, and compatible technology and communication channels (e.g., having the same core provider).
A merger “has to make sense financially for both organizations, but we also place a lot of emphasis on shared vision,” Paris Chevalier, former chief marketing officer for Xceed Financial Credit Union, explained.
The credit union, based in El Segundo, Calif., recently completed two mergers.
“In addition to a thorough review of their financials and an in-depth review of products, services, locations and associates, we carefully examine a credit union’s mission, vision and values,” she said.
If two entities decide to come together, communication must be considered in the context of logistics and cultural sensitivities, member nuances and understandings. Then the importance of timing and channels of communication can make all the difference in keeping institutional reputations intact.
For example, “No matter how great your communications are, they won’t help make the transition easier for members if they are not being read,” Chevalier explained. “At the outset of a merger, the communications team should find out how members are used to receiving information from their credit union, and then use that method – both for continuity and to increase the chances that your important updates will be read and understood.”
Communication is important before, during and after a merger. As communication and reputation management professionals, we are often brought into the realm late. We should be brought in early, however, to help maximize opportunity and mitigate risk.
To ensure a potential merger happens seamlessly, multiple departments should be involved beforehand – not only the top-level executives. Be sure to include members of your executive, marketing, HR and legal teams. It is also important to ensure that the board, executives, managers, customer-facing staff and spokespeople are unified in their communications. This can be accomplished with training.
During a merger, a multi-prong approach should be taken for communication in the following sequence:
- Internally to the acquiring the company: The board, executives, HR, IT, managers and staff.
- Internally to the company being acquired: The board, executives, HR, IT, managers and staff.
- Externally to existing and prospective customers.
- Externally to industry association, communities being served, media and social media outlets. “Close cooperation with vendors is also key to minimize downtime and sync all of the changes,” Chevalier advised.
Assuming the reason for merging is to bind together, prosper and grow, the six months after a merger should be considered a working juncture of continued proactive communications. The joined company should use this opportunity to retain staff and customers, as well as to attract new staff and customers. Direct communications can also help strengthen the bond with the communities that the combined company serves, through staff volunteer time, addressing important issues and being stewards.
Creating a Mutually Beneficial Relationship
To grow and prosper while expanding services for customers, companies can market themselves – an expensive undertaking – or they can acquire or be acquired. Historically, businesses expand through a merger because it is a cost-effective way to increase market penetration within the existing market.
Although M&A deals can be challenging to navigate, the common goal between parties is often growth and improved performance. Keep in mind, however, that mergers and acquisitions are rarely a partnership of equals. One business is typically acquiring another, not necessarily blending, which means one name and culture generally rises to the top. Still, a merger should still be mutually beneficial.
Continuous listening as an active part of your communications plan – and acting on feedback that focuses on your customers and employees – can help your merged company avoid surprises and increase the chances for success. This can also help safeguard your reputation for the long-term.
Refining Your Communications Strategy
How can you define your overall communications strategy and manage your reputation before, during and after a merger? Ask yourself these key questions:
- What do you want to communicate?
- Why do you want to communicate it?
- Why is this partnership or consolidation happening now?
- Who are the prospective customers you want to communicate to?
- How/where will you communicate your message?
- One-on-one meetings, phone calls, emails, newsletters, media and social media.
- When will you communicate your message?
While you combine your merging strategies, ReputationUs is here to help.