A clear integrated communication plan is key to a successful merger or acquisition (M&A). Understanding integration communication, and keeping all internal communication channel selections streamlined and secure, can help the deal go smoothly and lead to better integration between companies as executives and teams from both organizations learn to work together. At any point in the deal, if information is leaked due to lack of strategic communication tools or employees leave because they don’t have faith in the deal, the entire M&A opportunity could fall through.
There are several ways to protect against miscommunication and communication leaks as you go through the multiple phases of integration communication. Identifying key stakeholders and setting up a clear governance process can help ensure consistent messaging, encourage stakeholder engagement and employee engagement, and ensure confidentiality of documents. Implementing a virtual data room (VDR) can help keep those documents secure, show a path of revisions and changes, and enable interested parties to access documents — without the use of additional plug-ins or software downloads — on a need-to-know basis.
The Integration Communication Timeline
The first step to successful M&A integration communication is to establish a timeline for the release of information, data and materials to ensure a smooth transaction and sound corporate communication strategy. During the due-diligence process, access to secure information should be strictly limited. Primary integrated marketing communication tasks involve controlling leaks and organizing the dissemination of information. Once the announcement is made, you’ll want to be able to set the stage for a smooth collaboration.
Before close integration, the next step involves planning and building a day-to-day communications system for key stakeholders and employees. The language in all communications should be shifting so you’re thinking of both organizations as a team, rather than maintaining an “us vs. them” mentality.
Finally, on Day 1 of the transaction, it’s time to celebrate. But the work isn’t done. Now it’s time to get down to the nitty-gritty of corporate communication strategy plans for the future, including making leadership announcements, implementing workforce changes, and solidifying your new mission, vision and culture as a bigger, stronger organization.
Establishing Your Integration Communication Governance Process
Your integration communication timeline is crucial. Equally important are the people who will guide the integration communication process. Early in the game, you’ll want to establish a communications team and a strategic communication process. The permission controls in an integrated marketing communication channel like a VDR enable you to grant or deny access to documents to individuals — and even after those files have been opened, you can still revoke access at any time.
As you establish your integration communication team, you’ll want to appoint several leaders, along with a steering committee that will establish and approve messaging. Your integration leader will review and approve all materials, whereas your communications leader will manage the team in charge of crafting the messaging and executing your overall communications plan. The communications leader will also put together the team that ultimately creates the content to announce the merger or acquisition.
Once you have this group of individuals appointed, you can use your VDR to create teams and workspaces so they can share information securely with relevant parties, edit documents and prepare communications for dissemination.
Critical Elements of Integration Communication
Gould & Partners, an M&A advisory firm, outlines the five key elements of effective integration communication, without which your M&A deal can fall apart:
Frequency. It is critical to stay in touch with all stakeholders, including company leaders and employees on both sides. Frequent communications can head off rumors before they begin.
Security. Of course, frequent internal communication doesn’t mean every individual should be privy to every detail. Maintaining security of financial information, due-diligence documents and other elements of the deal is equally important. A VDR helps keep documents secure but easily accessible to those who need to access information quickly. Digital rights management features offered by CapLinked ensure that company leaders and those involved in the deal have complete control over how a document is used, edited, copied or printed.
Honesty. Maintaining trust during an M&A deal is critical to a smooth transaction. The steering committee should help ensure that all communications are truthful and phrased to help build trust.
Transparency. Likewise, parties involved in the M&A should never feel as if important details are being left out — either by accident or on purpose. Using integrated communication tools such as a VDR helps ensure transparency since interested parties can view the files they need. All files and modifications can be tracked with time and date, so leaders understand what is being viewed or edited and the timeline on which it’s happening. Tracking capabilities can ensure that key documents don’t fall through the cracks, and help show that both sides are being transparent in their communications.
Efficiency. Time is of the essence during an M&A deal. Having an efficient process to upload, download, share and edit files can build trust on both sides.
The Dangers of Disorganized Communications
Disorganized communications can have many negative effects on M&A deals. If employees do not feel that management is being honest and transparent, it can damage company morale and make the acquisition process more stressful. It can even lead to a loss of key talent that made both companies so valuable in the first place.
Information leaks to the media can create a public-relations crisis, which can damage public perception of the companies, hurt stock prices and possibly even kill the deal.
Failure rates for M&A deals fall between 70% and 90%. The deal may close, but the merger of the two companies may fail to deliver the results expected by company leaders and shareholders, Business.com reports. By entering the M&A deal with strong, solid, truthful and organized communications, companies can improve their chance of a profitable merger.
The Importance of a VDR Throughout the Integration Communication Process
Many of the challenges of integration communication stem from not having the right tools to streamline communications, keep information secure and prevent leaks to employees or to the general public. As Benjamin Franklin said, “Three may keep a secret, if two of them are dead.”
However, the importance of confidentiality in M&A deals should not be underestimated. Digital rights management within your VDR makes it easy to track who has access to company secrets — and to revoke that access at any time. Being able to track documents, edit without the need for third-party software and plug-ins, and even collaborate in real time can make the integration communication plan for your M&A transaction go smoothly.
Dawn Allcot is a full-time freelance writer and content marketing expert specializing in technology, business and finance.
Sources
McKinsey.com — Communications in mergers: The glue that holds everything together
Gould & Partners — Mergers & Acquisitions: The Importance of Effective Communications
Business.com — How to Handle Internal Communications During a Merger
