Mastering the Art of Effective Communication for Deal Success
The glue that holds and drives successful post-transaction goals & integration
The burning platform Everyone in Business & HR leadership is said to harp on how ‘effective communication’ is critical to deal success. This comes up consistently in M&A research studies done by various reputable M&A advisory firms. A study done by Aon across more than 150 companies also underscores ‘deal communication’ as one of the top five reasons for deal success (as illustrated below).
Let’s examine a few vital insights based on our extensive experience and research:
- Transaction-led situations, such as M&A, have fundamentally different business goals and metrics to define success.
- These goals, and the ensuing outcomes we want to drive, will very often differ according to function, geography, or business divisions, as each may be impacted differently.
- We need to hardwire the communication strategy, plan and implementation (tools & support) to the integration strategy, business goals and, if applicable, a staggered integration plan across either geographies or functions.
- Once we have set out in detail the applicability and implications of the above to the particular deal situation, we then recommend and establish some guiding principles on communication that have proven to be very effective in consistently driving successful deal outcomes. A few guidelines that we have found to be universal across sectors, deal sizes, and geographies are outlined here:
- Communicate what certainties you can or communicate a plan to get clarity on other aspects, but communicate clearly and quickly.
- Endeavour to strongly link/tailor communication strategy and implementation to:
- the overall integration plan and objectives
- each legacy entity’s needs
- specific integrating functional needs
- View the problem and outcomes from the employee’s viewpoint and prioritise accordingly.
- Use different modes of communication i.e., emails, banners/posters, intranets, town halls, manager meetings, and face-to-face meetings, as appropriate for the message.
- Strongly ‘brand’ the communication initiative to improve recall, credibility, and effectiveness.
- Business should lead this initiative from planning to implementation with HR supporting it (and not the other way around).
Unpacking the problem
Driving ‘effective communication’ may sound simple, but in reality can be fairly complex, if you do not understand the exact contours of the problem as applied to your organisational and deal context.
We surfaced an ‘effective communication’ issue in an integration project a client was running across more than 15 countries in the Asia Pacific region. The communication plan created by the company failed to deliver a clear employee value proposition with respect to what changes employees should expect once they were on-boarded in the new company. There was also no communication created for Day11 for the acquired employees. Not knowing what to expect would have caused employees’ anxiety as well as entropy in the system. Smart clients realise this can be a big issue and make efforts to ensure that Day 1 is not disruptive, thus retaining employee productivity and ensuring that value-preserving, short-term goals are not impacted negatively.
Hence, the key is to have the right framework to unpack the problem and then to prioritise initiatives that will drive maximum impact. It is then critical to craft and execute the right steps to realise success factors and derail risks.
A key insight we have gained from running more than 1,000 transactions over the past few years is that the right sequencing of prioritised elements should be communicated, and the way those elements are communicated, is sometimes more important than having the best communication strategy, plans and teams. We have shared below a very simple, intuitive, yet incredibly powerful framework called the ‘M&A Needs Hierarchy Prioritisation Matrix.’
Let’s examine this ‘Needs Hierarchy’ in a bit more detail. After a merger, acquisition, joint venture or divestiture takes place, an employee needs clarity on those existential and motivational aspects that foster excitement and strongly align merger goals with the picture of an exciting future. These are as follows:
- The first and most important thing in the mind of the employee is: Does he/she have a job or not?
- If yes, their 2nd need is to get clarity on what will be his/her going-forward role, title, and who will be his/ her reporting manager.
- The 3rd rung on the hierarchy revolves around going-forward rewards, i.e., pay, benefits and work location.
- The next level of concern will be about future career prospects and comfort within a new organisational culture, which can lead to either excitement or friction.
- The final need will be their understanding, credibility, and personal alignment to the customer and the firm’s goals as a result of the merger, which will fundamentally drive some of the needs discussed above.
This approach is powerful because it views the problem and the sense of urgency from the eyes of the employee. The critical thing to bear in mind is that when it comes to communication success, the receivers’ (in this case, the employees’) views and priorities are paramount. The organisation’s communication plan and content should reflect these. Otherwise, even the best-laid communication plan will fail. Most clients tend to completely miss this and then wonder why, despite following a structured process, their communication initiatives failed.
The structure of the right communication solution
Now let’s look at some fundamental steps that will allow you to unpack and address this problem in an adequately detailed way. This exercise will allow you resolve the issues and risks that would derail the success of your communication initiative.
- Understand the success factors and needs from businesses, functions & employees. Focus on the business’s and function’s integration strategy, goals and challenges.
- Embed these into a communication strategy and plan while clearly articulating how that solves the issues and mitigates identiﬁed risks.
- Design robust communication plan, collateral and tools as needed, keeping the above risks and outcomes front and centre.
- Execute the implementation plan in close partnership with business & employees, while making business front end with employees.
After following these steps and applying the frameworks outlined above, we now need to get ‘into the weeds’ of the planning and come up with the right detailed communication plan to answer these detailed questions shown in Figure 4 below.
These guidelines, solution structure and action steps, applied in conjunction with the following framework, will yield a simple, detailed, and very effective communication plan. Such plans are much easier to roll out, monitor, and measure for success using HR and business metrics.
In conclusion, Mastering the Art of Effective Communication for Deal Success will typically be complex, but is not rocket science. It can be done successfully with wellthought-out planning and execution, as many of our M&A-seasoned and sophisticated clients have proven.
Case Study 1
The deal was unprecedented and unique in many ways from their business goal and employee perspectives. Realising the deal value required some hard decisions and rapid implementation to be undertaken.
A number of issues revolved around the lack of a shared understanding of how a communication strategy should be created and how such a strategy should be communicated, e.g., leadership vs. HR-led, mailers vs. face-to-face meetings, etc.
Communication was going to be key to ensure that integration would be smooth and deal goals of business output, productivity, and workforce rationalisation would be met. A structured and transparent communication plan was thus formulated with clear timelines for the employees.
Value and impact
Potential complications due to lack of sufficient or clear communication with employees, which could have jeopardised the deal and integration goals, were avoided.
Case Study 2
In a large 20,000-employee-integration exercise recently, we helped surface a significant gap between what management thought and acted on to drive a smooth integration, when compared to what the employees’ concerns and uncertainties were about the integration. Failure to close this gap would have led to significant employee dissonance.
Catching this early, we created a prioritisation matrix, checklist of FAQ’s and a manager’s handbook. Certain key questions were answered to drive alignment and emphasise the view of the ‘employee as a stakeholder’:
- What are the goals of the deal? What do we intend to achieve from this deal?
- How will a destination organisation structure be created for my business unit/vertical?
- What role can I play to make this merger successful?
- How will my grade be determined in the new entity?
- How do I address the insecurity building up among mid- to senior-level staff. What is the proposition I make to the employees?
Value and impact
This approach helped to bridge the gap and resulted in a course correction, which led to significantly smoother employee integration.
Case Study 3
During a merger, a large technology client faced difficulties in managing the people and operational risks related to the merger.
A structured communication and on-boarding plan was designed and implemented that included multiple prongs, such as:
- Shared drives
- own hall meetings: Local Townhall meetings conducted by in-country Business and HR Leaders, who advised employees on what aspects would or would not change post transition.
- HR Command Center: A one-stop shop set up from Day 1 to Day 14 to answer any employee queries posted via email and helpline in real-time, thus expediting all employee-requested clarifications.
Value and impact
The merger was completed without any misses. The Day 1 transition was smooth for all 14 countries in the Asia Pacific region.
SVP & Partner, Regional MD Asia Pacific, Middle East & Africa Aon Strategic Advisors & Transaction Solutions
Aon Strategic Advisors & Transaction Solutions