Here’s how to reap the benefits
Try as we might, we’re not going to forgot 2020 in a hurry. And as industries get to grip with new ways to exist, it’s likely we’re going to see a large upsurge in mergers and acquisitions (M&A).
That’s not necessarily a bad thing. The benefits of M&A include reducing your competition, increasing your product or service offering, moving into new geographies and fast-tracking growth. Done well it can create tangible benefits for all of your stakeholders.
So what are the pitfalls?
Usually the technical aspects of the deal: financing, tax, legal considerations and intellectual property rights take centre stage. Many M&A deals fail to consider – or at least place enough value on – the people involved. This is a mistake. Ultimately it’s the decisions and actions of employees, as well as customers and other stakeholder groups, that determine whether a deal is successful or not.
Don’t fail to plan
Without well thought-out, well-executed communications, employees can feel that that they’ve no control and no voice in the changes — the acquisition is something that is ‘happening to them’.
Communication is key. Making it clear why the change is happening, how it affects employees and how they’ll benefit will help to lower anxiety and increase buy-in. Communications need to be honest, as building up trust between new employer and employees is essential for future growth.
An informal culture of ‘this is how we do things round here’ develops in all companies. Successful change management recognizes this and develops communications and tools to support employees towards understanding and accepting ‘the new norm’.
…and your customers
It’s not just employees who need careful management. Existing customers may not be keen to switch allegiance to a new brand or owner. Could concerns about higher prices, lower levels of customer service and a loss of relationships lead to customers voting with their feet?
Avoiding this is critical. Consistent customer communications that are aligned with internal communications will help to make sure the deal is fully understood and supported. Communication should not just focus on big changes, it should also provide reassurance that the aspects they liked will remain the same, for example, personalized customer service or fast response rates.
What’s in a name?
As we’ve said name changes are a common part of a M&A, but brand also plays a big part in a company’s value. Before you decide to change your company name, it’s worth considering how the brand is perceived by the marketplace. Customer loyalty is not just tied up in the rational benefits, logos, taglines and branding often hold emotional associations which can drive fierce loyalty.
Before changing a brand, look at its heritage and the loyalty it commands. You may still decide to make a change, but managing the process carefully means you won’t lose trust and value.
Don’t fail to plan
As the saying goes, those who fail to plan, plan to fail. Too many M&A deals fail to realize their potential value because they did not take the key people – inside and outside – the organization on the journey with them.