The rise and rise of Mergers & Acquisitions
Last year, organisations spent close to £2 trillion on M&As globally [1]. Yet statistics have their failure rates sitting between 70% and 90%.[2] Despite these figures we believe M&A activity is set to increase again, especially in light of Covid-19’s impact. Businesses in ever sector and market are looking for innovative ways to develop their offer and M&As are a way for them to do just that. Over the past 18 months we’ve worked with many clients who’ve adopted joint ventures, alliances and strategic partnerships to maintain their competitive edge.
INCREASED SUCCESS
What can organisations do in order to increase the success rate of their M&As? For us, one thing is for certain – no matter which structure they choose, organisational changes of this nature can and will impact their brand in unpredictable ways.
Through our own experiences and research, we’ve identified five of the most commonly-encountered issues that organisations face on an M&A journey. Alongside these we've also developed a set of corresponding creative strategies to help navigate these challenges.
Brand is critical to the M&A process
Most M&A programs will result in some sort of consolidation. This can leave the resulting brand and their people irrevocably changed. With leaders’ attention focused on planning, financial projections and processes, ‘brand’ can often be left to suffer or be an after thought.
People can suddenly find themselves thrown into a new ‘brand landscape’, working with new colleagues, systems, processes and procedures. With little time to adjust the ‘brand’ can become diluted or used in conflicting ways. People find it hard to let go of old habits, and are sometimes reluctant learn how the new brand works.
At its lowest common denominator, brand simply equates to logo and as such it becomes someone else’s responsibility.
How to respond:
Use the M&A process to re-evaluate what ‘brand’ means for everyoneWe believe brands can be shaped by their environment but are built by their people. A brand’s people, and the cultures they foster, are one of an organisation’s most powerful and enduring assets.
The M&A process is therefore a perfect time to re-evaluate what your ‘brand’ means for every employee, from bottom to top. People need to understand not only the brand’s strategic purpose but what their role and responsibility is within its operation.
During the M&A process we work closely with our clients to to ensure ‘brand’ remains a clear and present focus. By helping them to translate their brand into tangible behaviours and value-led benefits that everyone can employ. Doing so enables every employee to understand the role they play and the contribution they can make in the brand’s delivery.
Change is inevitable, so be prepared
Whilst every M&A is different, they almost always signal the beginning of widespread, organisational change. Unfortunately, due in part to the sensitive nature of most M&A deals, information is usually limited to high-level stakeholders. This means communication can be slow or non-existent and is replaced instead by uncertainty, doubt or worse, misinformation.
These negative connotations can be disruptive forces during M&A proceedings and can have a long-lasting effect on your people if not managed correctly. Anxiety during this time can lead to strategies of separation rather than integration. Leaving people with their own agendas to push.This can give rise to internal conflicts, and the availability of resources will mean opportunities are missed or the project falters.
How to respond: Communicate, communicate and communicate some more…
It may seem obvious but open communication is vital to the M&A process. We work with clients to focus on communicating exactly what various audiences need to hear rather than how often. Communication and message mapping allows clients to:
Communicate the ‘why’ behind M&A proceedings. This should happen as soon as it is feasible.
Think about strategic messages i.e. what each audience needs to hear and how to best deliver them.
Present a communications plan with important milestones and updates to ensure people feel like they’re always ‘in-the-know.’
Ensure internal communication planning starts the moment the M&A is launched. Make sure news is delivered before gossip and speculation start.
Provide managers with an evolving FAQ document so they can field questions, respond in the right way and capture how people are feeling.
Build in feedback loops to allow open, two-way communication.
Reassure people when and where you can but always remain honest and open. It is when communication breaks down that anxiety can become dangerous.
Get good at being active listeners
M&As can be emotionally charged and unsettling times. It’s not uncommon to see conflicts arise and cultures collide as people attempt to understand how changes affect them.
For many employees this may be their first experience of the M&A process, whereas others may have seen it all before. No matter what position or experience a person holds, they should feel able to express their thoughts and feelings at all times.
How to respond: Engage HR to plan the path to employee engagement
We spend a significant proportion of our lives at work, so it’s understandable that changes we encounter, especially those that unsettle us, can impact our emotions.
From day one we work with our client’s HR teams to demonstrate the value they can deliver during M&A proceedings. Often taking on a phased approach to allow for a more controlled delivery of communication and considered period of employee consultation:
Operate an open-door policy to encourage staff to talk about their thoughts and feelings. This allows you to keep a close eye on the emotional well-being of the organisation as it experiences change
Be prepared to lose people along the way, think of it as a flight or fight response to organisational changes. This is where recruitment, training, reward and discipline become invaluable to your future success
Design programs for HR teams to link the brand experience to renumeration and reward packages so that changes can be viewed in a more positive way
Brief managers so they can run team talks and brand briefings to facilitate feedback loops and status reports back to management teams
Run a series of roadshows, open forums or Town hall meetings where staff can meet leaders to discuss and address their concerns
Engagement is key
Not all emotions arising from M&As are negative. There will be those who’ll be excited about the changes and see it as an opportunity. You need to channel and utilise this positivity to your advantage.
How to respond: Set up a brand ambassador programme
Over the years we’ve helped many clients set up and build brand ambassador programmes. These groups are made up of representatives from across the organisation. They help to fill the gaps between employees, managers, and leadership.
Brand ambassadors are your internal brand partners – communicate your goals with them and take time to ensure they’re understood. Working together, you can create strategies that allow you to connect and build with the entire organisation and wider customer community.
The aim is for your ambassadors to help share and disseminate information regarding changes affecting colleagues but also to keep the flow of information coming. They’ll enable you to reach some of your notoriously hard to reach colleagues. However, they’re not there to be the fall guys for any bad news that has to be shared, this has to come from managers or leaders.
Collaborate to innovate
For many employees a common coping strategy when faced with uncertainty is to retreat into their shells and think only of themselves. Unfortunately, this approach makes employees far less open to change, narrowing their field of perspective and potentially crippling productivity amongst teams.
This can also negatively impact any new employees being introduced to the organisation, individualism prevents new employees becoming integrated into the business, hindering teamwork and progress.
How to respond: Focus on team building
Single-mindedness can be countered by encouraging team building events and experiences. We create, enable and facilitate opportunities on behalf of clients that allow teams to collaborate in safe and constructive environments.
Activities and events designed in this way encourage teams to cross pollinate ideas and problem solve together, foster team spirit, and help nurture collaborative cultures. It helps remind them that the whole is always greater than the sum of its parts.
References
1 Source: https://money.cnn.com/2018/05/24/investing/merger-boom/index.html
2 Source: https://hbr.org/2011/03/the-big-idea-the-new-ma-playbook
