Successful M&A Requires Effective Communications - Saxum


Successful M&A Requires Effective Communications

An energy client of ours recently made an acquisition. As we developed the plan, messaging and tools to announce the deal, I was reminded of the critical importance of communications during these events.

As should occur, significant attention is given during any such transaction to ensure that the business aspects of the deal are right. For all the same reasons, great focus must be placed on communicating with all stakeholders. They need to hear the details of the transaction, the rationale behind it, and the impact on them. Overlooking or downplaying this important piece of the equation can lead to major headaches.

Consistent messaging ensures stakeholders hear the same details and rationale. Timely and transparent facts help manage speculation and set expectations. Clear and targeted statements define the impact to interested parties. And the role of communications becomes even more necessary once the deal is closed; this is when it’s critical for customers and employees to understand what’s happening and embrace change. Regular communications now will pay off later as employees work together to carry out business objectives.

Lack of communication during and after a deal comes at a cost:

  • Most importantly, safety could be at stake. Distracted employees are more likely to take shortcuts, putting lives and assets at risk.
  • Productivity could nosedive, as anxious and distracted employees are confused about today’s priorities and tomorrow’s direction. This leads to inordinate amounts of time speculating over the water cooler.
  • Key talent could walk, as employees quickly lose confidence in a management team that fails to clearly communicate a direction. Often, the best and brightest are the first to go.
  • Any internal culture clash could become an internal war, as employees without clear direction or understanding of the business objectives square off in meetings. See previous points about loss of people and productivity.
  • Market share could tumble, as competitors grab customers and employees. This exacerbates the loss in productivity and leads to additional loss of talent.
  • Investors could sell if they’re unclear on the company’s direction, rationale for the transaction, or upside to the company’s bottom line. A direct contradiction to the reason for the deal in the first place.
  • Community leaders could become less likely to support expansion if they don’t clearly see a direct connection with the greater good for their community members. This loss of confidence could threaten a company’s ‘license to operate.’

Companies that prepare in advance and implement an effective communication plan concurrent with the announcement of an M&A transaction can significantly improve customer focus, employee commitment and productivity, the speed at which decisions are made, and confidence in the direction of the integrated business.

By, Kristi DesJarlais, Senior Vice President and General Manager, Houston


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