29 Apr Successfully Communicating a Merger
Cultivating, negotiating, finalizing, and communicating a successful merger between two entrepreneurial companies is no small task. Many mergers fail to deliver expected value, and often that failure can be traced back to poor communication leading up to and during the announcement of the deal.
On April 5th at the Business Transitions Forum in Calgary, Incite’s President, Ted Kouri, sat down with Ryan Vestby for a fire side chat to discuss the recent January 2022 merger between Canadian-based CompuVision and US-based VC3. Ryan was the CEO and majority owner of CompuVision and is now the Chief Growth Officer for VC3, and Incite served as Communications Advisor to CompuVision on the merger.
Drawing from that conversation, here are 3 lessons that your organization should consider to effectively communicate a successful merger.
1. Tell the story of your deal from your stakeholders’ perspective
Too often, merger announcements focus extensively on the financial aspects of the deal. While important, these only matter to shareholders. Your customers, staff, and community partners do not care about what valuation formula was used or how the shareholders’ agreement is structured. They need to know how the deal will impact them and what benefits they can expect to see as a result. “We know that when companies can’t communicate a clear and compelling narrative to their stakeholders, excitement around the merger will quickly turn to skepticism or concern,” explains Ted.“ We put a lot of effort into distilling our deal narrative down to 3 or 4 key points,” says Ryan. “We then translated those into messages that would resonate for each of our key stakeholder groups…our people, our customers, our suppliers, and our community partners.” Speaking about a deal with your audience in mind ensures your messages will resonate.
2. Open and direct access to leadership is critical
Change is hard. People are often concerned when they first learn of a merger. They want to hear directly from leadership, and it is important to create a safe environment where their questions can be answered and shared transparently across your organization. “One of the best formats we used were AMA’s (Ask Me Anything) sessions,” says Ryan. “Staff could submit questions anonymously and every two weeks Sandy Reeser (VC3’s CEO) and I would host a townhall and answer them. We will keep doing this for as long as there are questions being asked.” Open communication matters. “It is also important not to overly hype the merger,” outlines Ted. “Give factual, honest assessments and share a mix of excitement for the opportunity with detail about what challenges are likely to be expected. Try to be more of a reporter sharing an accurate account of the deal than a PR person spinning the deal as only sunshine and rainbows.”
3. Equip your team with the tools and messages to communicate with your stakeholders
Even with a clear narrative and a strong leadership communication presence, most of the questions from customers and employees won’t go to senior leadership. Customers will ask their account manager for details and front-line staff will talk to their supervisor informally in the field or in the lunchroom. Ask yourself, are these team members equipped for this?
“We recommend clients prepare FAQs lists for their entire team and create specific tools to help staff communicate with internal and external stakeholders,” comments Ted. The other piece is training. Effective communication may come naturally to senior leadership, but others in the organization may not have to do this type of engagement regularly. “We made sure to run sessions with our team prior to announcing the deal publicly,” explains Ryan. “Both on the messaging and questions to expect, but also time spent walking them through communication best practices like active listening, the importance of nonverbal communication, and how to put themselves in the shoes of those asking the questions.” Preparing your people in advance helps ensure the deal rollout goes smoothly.
One plus one can equal three, but it is by no means guaranteed. The work that goes into negotiating and finalizing a merger needs to be supported with a stakeholder focused communications strategy, direct leadership involvement in speaking to all facets of the deal, and proactive training and support for your team to ensure they can respond effectively to internal and external stakeholders.