The most important factors for successful M&A deals are organizational integration and human capital. In this article, we will consider how to organize an acquisition communication plan and the purpose of the communication strategy in the deal.
What is a communication plan in acquisition?
Mergers and acquisitions (M&A) have already become common features of the business, such transactions are made by both global companies and small local ones. However, according to experts, only about 20% of them achieve their goals. Often, the organization being bought is rejected as a foreign body, corporate cultures turn out to be incompatible. If top managers have decided to integrate, what strategy should the HR director follow for the M&A to be successful?
M&As pose the most difficult tasks for PR specialists. The choice of a communication strategy depends on the stage of negotiations, the position of investors, the competitive position of the companies involved in the transaction in relation to each other, the market situation and the consequences of the transaction for the market as a whole, the complexity of the negotiation process and other factors.
During the period of integration of companies, the tasks of an HR director are determined by the overall business strategy, and cannot be considered in isolation from it. To develop an effective communication strategy, the HR director must understand what strategic goals top managers set when deciding on the M&A deal, and, accordingly, which areas of activity are considered a priority.
There are three common ways to start developing a corporate culture:
- Choosing one culture to develop
- Creating a new culture that combines the best of both companies
- Creation of a completely new corporate culture
Each path has its pros and cons, and depending on which one you choose, it’s important to communicate with employees. Often during the transition period, communication becomes more and more commonplace for top-level decision-makers, and employees remain outside the decision-makers. Thus, a good acquisition communication plan must be established before the deal is completed and continued throughout the process.
How to announce M&A?
The sooner the company develops a communication plan, starts managing the process of informing its partners, customers, employees, and has a regular dialogue with them, the fewer losses in these resources it will suffer, and the more manageable for it will be even the most unsuccessful processes occurring within the organization. In this case, there is never too much information, but it is necessary to reasonably filter, dose information, presenting it at the right time for the organization and in the right light.
From the very beginning of preparation for integration, it is worth identifying ways to solve problems associated with different corporate cultures. It is clear that no two organizations have the same corporate culture. Even if during the pre-sale phase everyone claims that organizations are very similar, in reality, they are not. To develop an action plan to harmonize corporate cultures, first of all, it is necessary to understand what the merging companies have in common, what are their strengths and weaknesses, how different are their corporate values, corporate cultures, what are the necessary scales of transformation.
It is important to determine what management style the first person of the new company prefers and what his personal goals are, to what extent the management style of the first person coincides with the corporate culture of your company and with the declared culture of the merged company, to what extent the goals of the first person coincide with the goals of the real owners of this company.