12 Ways to Nail your M&A Communications Strategy

If you follow the M&A space, you’re well aware that the numbers for 2023 were not great. Nearly every market saw historic lows in both volume and deal size, which experts attribute to economic instability, high interest rates, and anti-trust scrutiny. For those organizations that rode high on the 2021 M&A wave, this year was lackluster – some may even describe it as disappointing. Despite decline in the space, some experts are predicting a brighter future.

"The view looking forward out of the windshield is very different from the scene looking at the rearview mirror. It’s very consistent with historical trends where after a boom year like 2021, it takes about two years for the market to bottom out, settle and find its footing - and we are seeing that," said Naveen Nataraj, co-head of U.S. Investment Banking at Evercore Inc.

If history repeats itself, we can all expect an uptick in M&A activity next year. This is welcome news for anyone in the corporate sphere, but it also begs the question for any business leader: Are you prepared? If you ask Loki Equity, the answer is that you’re probably not. Loki estimates that anywhere from 50%-90% of acquisitions fail to achieve their intended value. Granted, this scale is vast, but the bottom line is that regardless of your size (large enterprise or small or medium business), your odds of success aren’t high.

So how then will you ensure you’re not one of the tragic M&A tales? For starters, an air tight communications strategy. In this article, I'll share my top 12 tips to nail your M&A communications strategy.?

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Tip 1: Know your audience.

Ask most communications professionals what the first step of a communications strategy is and they’ll tell you it’s the message (Spoiler Alert: this will be the topic for Day 2). I’m here to say that the message is actually not the first step in M&A communications, and here’s why…

The single-most important piece to any successful campaign is the people it impacts. It’s simple math, really. You cannot drive awareness, acceptance, or action if you don’t know who you’re talking to. If you find yourself managing an acquisition, I challenge you to start with identifying and understanding your audience. And, I’m not just talking about employees and customers. Look at the audiences on the periphery – analysts, investors, partners, prospects, and even change ambassadors.

By starting with audience identification, two things happen. The first is that you can create messaging that is specific to individual audiences. You’ll begin to see the subtle nuances between each audience and you’ll more successfully refine your messaging to what matters most to that specific audience. The second thing that will happen is that you will naturally begin to default every decision going forward to the people that those decisions impact. If you hear nothing else I have to share over these next 12 days, please hear this: you will never fail with a people-first approach.

Tip 2: Get the story right -- the first time.

Getting your messaging right in any M&A strategy is absolutely imperative because you get one shot at it. Your message should be repeated over and over again throughout the entire lifecycle of a campaign. Consistency and repetition drive trust and credibility. If you don’t get the message right the first time, and you change the message down the road, it creates confusion and distrust among all stakeholders. Once you lose trust, you’ve killed the ROI of M&A.

When I develop messaging for M&A activity, I ask three questions that help me develop an end-to-end storyline that is credible:

1.?????? Why are we doing this right now?

2.?????? How does doing this build on our history?

3.?????? How will doing this build a better future?

Tip 3: Create an air-tight Day 0 plan.

Day 0 represents the day you publicly announce either an intent of purchase or the close of a transaction. Despite zero meaning nothing, in this instance, zero is everything, so getting an air-tight plan in place is key.

Like most communications professionals, I avoid spreadsheets like the plague. But not on Day 0. Your Day 0 spreadsheet allows you to create a chronological timeline of what is happening, who’s saying what, and where they’re saying it, minute by minute. Getting the chronology correct (and ensuring key stakeholders get on board) ensures that you own the narrative and helps you avoid any legal or public missteps.

Similar to messaging development, ensure that all key stakeholders are aware of the timeline and understand their role in executing it. Diligence in your announcement timeline will determine if your announcement day ends in success or if it completely crashes and burns.

Tip 4: Send in the troops.

Love it or hate it, we live in a remote world. But when it comes to M&A, you cannot rely on your computer to serve as your only channel of communication. Absolutely nothing will be more impactful or more meaningful than in-person presence and communication.

As part of your Day 0 strategy, consider whether on-ground support is also necessary. Do you need to send leaders to various office locations to answer questions on site? Is there a client in the midst of a large deal who needs reassurance?

Don’t overlook the power of presence.

Tip 5: Cadenced communication is king.

You survived Day 0, so now what? I would argue what comes next is the hardest part of M&A activity. While there’s so much work to be done leading up to a transaction, it’s the period of time after the transaction is complete that I find hardest. It’s the time when you start to integrate technologies, cultures, goals – and all of these huge transformations require consistent and cadenced communications.

Often you will see major dips in retention following an acquisition, and much of this is driven by a fear from employees about what’s happening. Repetitive and consistent communication to all audiences enables you to keep the conversation alive and to develop a long-term dialogue about the progress of your integration strategy. The more transparency you have about your progress, the more likely your audiences will feel a part of the story and your long-term success.

Tip 6: Focus on the middle.

Up until this point, most of the communications work in a merger or acquisition has come from the top. But once your cadence of communications has been set, it’s time to switch focus toward middle management. When I say middle management, I’m referring to the range of leaders between VPs and Managers. Middle management historically is one of the most powerful populations because they carry the responsibility of taking information from the highest level and casting it down. Middle management is where employees turn to for guidance and to ask the tough questions. Middle management ensures its teams are aligning their work with the overarching business priorities.

Successful M&A communications strategies promote a separate workstream focused just on the middle. This workstream may result in its own cadenced communication that equips managers with the knowledge and resources they need to share integration information on behalf of the company, and address queries from team members about an integration’s progress.

Don’t ever discredit the critical role middle management plays in M&A activity. If you equip this population with the correct resources and empower it to guide teams through a transaction, you will create one of (if not THE) most effective M&A ambassadors for your strategy.

Tip 7: Invest in education.

More often than not, M&A activity is a good thing. Unfortunately, excitement is not always the sentiment that’s felt by employees when the news breaks. Instead, the sentiment is fear. Fear for job security, organizational restructures, and product longevity. More unfortunate is that fear can be all-encompassing and can slow down or even derail ROI from M&A.

However, fear is often the result of the unknown – but it can be combatted through education. The more information someone has, the less they are fearful of what’s to come. In my own experiences, I’ve seen companies invest heavily in sales education during an integration to ensure teams in the field know how to sell more available products and services. What I’ve also seen in my experience is that few companies invest in educating teams that aren’t in the field.

Keep in mind that every employee is a representative of your brand. Failure to educate all your employees about the acquiring and acquired companies, their history, their values, and their products and services is a missed opportunity. It’s true what they say: knowledge is power. By empowering all employees with knowledge, you will see sentiment shift from fear to excitement.

Tip 8: Conversation creates culture.

As communication professionals, much of the work we do comes in a written format. I would be out of a job if I said that written communication doesn’t matter – it does, but it’s not everything. Written communication is often limited in its ability to drive culture. It’s through verbal communications, and conversations, that a culture really takes shape.

In the midst of an integration, we often revert to written communications. In large part, it keeps organizations safe legally (no one may slip up and share confidential information), and it’s simply less time consuming (and with an integration, time is a luxury). However, if you only rely on written communications, you will limit culture development.

Within the first few months of an acquisition, it’s important that teams begin to find opportunities to connect face-to-face. I know many of us enjoy the new normal of remote working, but taking the time to connect in-person is invaluable in creating culture, learning about our colleagues, and better understanding the different perspectives of the two companies that are now becoming one.

Tip 9:? Avoid the IMO communication bubble.

At the beginning of a formal integration, an Integration Management Office (IMO) is often established, which serves as a tiger team of functional representatives that oversee the integration actions for individual departments. The IMO team assumes the responsibility of leading their departments to take the required actions necessary to integrate people, products, services, data, IT, etc. The team is often moving quickly while operating as a single unit, which creates a natural bubble of information sharing. Unfortunately, this makes it challenging for information sharing outside of this team.

We all know by now that transparency is the single most important driver for trust. With that being said, people want to see and hear about the integration progress. They want to know what’s been happening to ensure the integration is delivering on its previously stated goals, and they want to be reassured that the M&A transaction was money well spent.

Leverage your existing cadenced communication plan to share progress specifics – and be honest about progress that has been successful or fallen short of the intended goal. Keep in mind that this information is not just valuable to employees, but it’s also important to those populations on the periphery, such as business partners, customers, and even analysts.

Tip 10: Provide clarity on reorganizations.

During a merger or acquisition, organizational change is inevitable. Reorganizations are tough -- there are so many uncertainties and questions employees have, and often, not enough answers.

As you announce a reorganization, be intentional in explaining why the restructure is necessary; how the new structure supports the operational goals of the business; and how individuals fit within the new structure. If certain employees are on a set promotional path or tenure track, provide specific communication to them about how their path is or isn't impacted by the new reorganization.

Bonus points for making all organizational charts available online to employees so it’s clear how teams are structured and how teams work together.?

Tip 11: Pulse-check performance.

You’re a few months into your integration. Your cadenced communications are flowing; managers are championing your messages with employees; teams are successfully operating in their new organizational structure; and now you’re ready to declare victory. But before you can crown yourself victorious, you have to be sure that what you’re doing is working. It’s time to pulse check your audience.

When it comes to employees, surveys are the simplest way to assess whether the communications strategy and tactics you’ve taken have achieved the intended goals. Surveys can offer the ability to measure success both quantitatively and qualitatively so that you can adjust your go-forward strategy to address specific topics of concern for individual audiences.

While I discuss pulse-checking as one of our final steps, organizations should feel comfortable surveying employees periodically throughout an integration. The more you survey, the better you are able to identify change over time and quickly pivot to address emerging issues. ?

Tip 12:? Integrations take a long, long time.

One thing that remains true for every integration, regardless of size, is that they take time – and I mean a long, long time. Integrations require changes in perception. They require new go-to-market approaches that in turn require hours upon hours of education and training. They require new market awareness and adoption. They require shared vision and values. None of these things happen in a matter of days, and they don’t happen in a matter of months. They happen over the course of years.

If you’re an organization that plays in the M&A space, it’s easy to shift focus from one integration to another. But integrations don’t end just because another company has been acquired. Communications is a key component to ensure integrations don’t die on the vine and that information flows until the point in which an organization can truly declare victory.

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“12 Days to Nail your M&A Communications Strategy” was written and developed by Emily Wheeler, Founder of Wheelhouse Consulting. If your organization is looking to nail its M&A strategy, Wheelhouse can help. Contact us at [email protected] for your free two-hour consultation.