In this second part of Employee Communications in M&A, I explain what the Integration Lifecycle is, give you examples of what to avoid and share some case studies.

Integration lifecycle

Drawing a geometric representation, the integration lifecycle is a ray made up of a sequence of line segments with a given starting point – the due diligence performance – and that extends to the consolidation of the new business, spanning integration planning, announcement, Day 1 and integration implementation. These connected line segments represent a roadmap to help communicators:

  • Determine what needs to be communicated to whom, by whom, when, how and why
  • Plan well in advance
  • Communicate things at the “right time” and refrain from going too fast too soon or too slow too late
  • Set clear communications objectives for each stage of the Integration Cycle.
    • Broadly speaking, Day 1 – or “launch Day” – is a vertical line that separates two major phases:
      • Pre-Day 1 or transition from “old” to “new”, i.e. from the combing organisations to the new entity
      • Post-Day 1 or post-M&A integration execution

Pre-Day 1 phase is aimed at setting the M&A in context, explaining why it is needed, how it is going to impact both the organisation and its workforce.

This phase is about “selling the business case” for the M&A, creating an understanding of what it implies and articulating the new business direction. It is also the phase where you need to build emotional buy-in to change, listen to employees, address concerns and questions.

The shift from rational buy-in to emotional engagement corresponds to the shift from an information and fact-driven approach of the early days,  to a more emotion-driven and benefit-oriented communication.

Post-Day 1 phase has a different focus in terms of objectives and is targeted at educating employees on the new brand (not only the visual identity!), what it stands for, its values and desired behaviors; addressing those behaviors that are no longer aligned with the “new” culture; embedding new ways of working; providing employees with the tools and training needed to do things differently; consolidating change into business as usual.

Misaligned communications

There are various things that can go wrong with misaligned communications:

  • Failing to communicate how the M&A is going to affect the positions of individuals
  • Keeping uncertainty prolonged as a consequence of late communication about redundancies, team/department restructuring, appointments to different roles or creation of new positions
  • Neglecting to communicate early in the process what employees are supposed to do, know and feel about the new organisation.
  • Not finding the lines of continuity between the legacy firms and the new business. There are bridges between “old” and “new” and they must be communicated clearly to employees. This is particularly true at the cultural level. What elements of the previous culture are part of the “new” culture? What is the best of our culture we are bringing along with us on our journey?
  • Forgetting to highlight connections between cultures. What do the cultures of the organisations coming together have in common? What are the shared values, attitudes, behaviors, beliefs, practices and so on? If people don’t see such culture similarities, M&A integrations and consolidations become very hard to reach; instead, they turn into painful processes and toxic environments characterized by antagonism – we vs. you – silos and nostalgia for the good old  times
  • Failing to acknowledge differences. In an M&A, the principle that “one size fits all” does not apply. Failing to recognize, openly and distinctly, the differences between the partner organisations and how some of these differences could turn into a strength or even a competitive advantage are counterproductive. It makes the integration process difficult to manage, with one party trying to impose its solutions on the other(s); it becomes a source of friction and misconceptions; it creates wrong perceptions and conflicts among employees from the different legacy companies. A smooth integration requires an education process – not to be left to the last minute – to help the combining partners understand each other and where they are coming from, assess what differences represent an obstacle to the integration, which ones should not be part of the new course and which are to be leveraged internally and externally. There are key differences that can’t be neglected and poor communication (and education) about them makes the job of the integration workstreams quite challenging, both in terms of tasks to be completed and relationships among its members.

Case Studies of employee communications in M&A

Case Study 1 – During one acquisition in the tech sector, leadership was visible only at the time of the announcement and then missed the opportunity to communicate the wider strategic framework and direction for the time ahead as well as informing employees of future opportunities.

As a consequence, communications became immediately very technical, centered on HR policies, procedures, and systems. The result was stark: a disengaged workforce, low morale, and the best talent left the organisation due to the uncertainty created by poor communication and the lack of clarity about the future.

Case Study 2 – In a set of acquisitions in the telecoms sector, the process of defining what the acquiring organisation stood for, and its culture, were communicated at the end of the acquisition process which had taken a number of years.

While the exercise was done very thoroughly and supported by deep research, it happened late in the acquisition cycle so the first part of the integration implementation was more a collection of companies, systems, and processes.

The process was necessary and proved to be very successful as, up until that point, the amalgamated business was very fragmented; employees didn’t identify with the new acquiring entity and generally referred to themselves in relation to their legacy organization.

Although this was not ideal, a benefit of doing the process at the end of the acquisition cycle was that the organisation could pick the best elements of the acquired entities and jettison the worst, and because the process was felt to be inclusive and collaborative it had the effect of creating greater buy-in and cohesion in the new, restructured, organisation.

In Part 3 of Employee Communications in M&A, I explore the four enablers of Employee Engagement

Gianluca Bregoli, first published this article with the employee communications company, Poppulo. 

Gianluca Bregoli