Mergers and acquisitions are major steps for any business owner. They can completely revamp how your business operates, provide an appropriate and optimal exit for you as the owner, and will generally have a massive impact on the company going forward, with or without you.
As such, you should always have a bulletproof plan before you start pursuing M&A options. Having a plan will help increase the chance of you pulling off a successful deal that works out for everyone, keep the process on track, and of course, help you avoid some of the extremely costly and headache-inducing problems that are common for those new to the M&A process.
Today, we’re going to walk you through the steps you need to follow to make an M&A communication plan.
Let’s get started!
What is a Communications Plan?
Your communications plan is separate from your actual M&A integration plan, but it directly impacts your M&A strategy and how smoothly it goes over for everyone involved.
Your communications plan is the plan you set in place to guide how you discuss the merger or acquisition and the anchor points that will keep discussions on track. This prevents the M&A strategy from being derailed by miscommunication, scaring your employees and jeopardizing the transaction, or creating unfavorable conditions by miscommunicating key points.
Having a solid communications plan in place is key to ensuring the merger or acquisition goes according to plan without communication challenges creating conflict or unnecessary difficulties.
Steps to Follow for an Effective Communications Plan
We can separate the basic construction of an effective communications plan into five key steps. Each step is a bit more detailed than it appears at face value, but we’ll dive into more specific details later.
1: Determine the Goal of Your Plan
First, you need to ask yourself why you’re making the plan in the first place. A communications plan can be necessary for a number of reasons.
You might be trying to guide the public’s reaction, guide how the media responds to the situation, or guide communications with the people directly involved in the transaction. You might even need to limit employee knowledge or create a “narrative” that prevents them from taking it the wrong way.
Oftentimes, it’s actually necessary to consider several or all of these goals in your communications plan and create separate “mini plans” for each goal.
Everyone’s goal will be different depending on the situation, how they approach business, and what they’re comfortable with. It’s up to you to take this early planning period seriously to determine what YOU want at the end of the process.
We recommend brainstorming every detail possible and jotting down notes to help guide the rest of the process in the same direction as your goals.
2: Identify Your Audience and Create an Audience Map
This step will help you approach different aspects of your communication plan appropriately. As we mentioned earlier, there will be different targets that require a different approach. You won’t want to use the same communication plan you’re using with the buyer in the transaction to discuss the matter with the media or customers.
Start by looking at your company’s operations and determining everyone that will need to be communicated with. Is it necessary for you to communicate with the media, or can you keep things dark as a smaller business that doesn’t generate much media attention? Do you want to let your employees know relatively early but need to frame the conversation in a positive manner that doesn’t scare them off, or do you want them to stay in the dark until the last minute?
Subsequent steps will deal with the specifics of handling communications with big players in the transaction, but you do need to have a good idea of who you’ll be communicating with and how every audience will need to be handled.
3: Identify Communication Trigger Points and Methods of Communication
Not everyone you’ll be communicating with throughout this process needs to be communicated with right away. This is a crucial point when it comes to communicating with customers, employees, and suppliers. We’ll mention more about this later, but telling everyone right away is often a bad idea that can be costly in the long run.
As such, you need to create trigger points that will cue your need to engage with groups that aren’t directly involved with the transaction.
For example, you might not want to inform your employees until the deal is in the final stages and all the information the buyer needs has been provided. A contract signing or an event a few weeks before the deal is finalized and completed might be an optimal trigger for you to start communicating with employees. Again, that’s a personal decision with pros and cons. This is just an example.
You’ll want a trigger point for every person that will be communicated with. Customers, employees, suppliers, and even the buyer or new partner. Although, you typically will “trigger” that last conversation immediately once you’ve prepared yourself to find a buyer or partner.
By having trigger points that you stick to, you’ll be able to keep yourself on track, keep the cat from getting out of the bag too soon, and maintain control of the transaction without outside factors creating external conflicts and issues.
Having trigger points determined isn’t all you have to worry about, though. You should also take this time to consider HOW you will communicate.
Will you inform employees via a simple email, or are you small enough to warrant personally engaging with each employee yourself? Maybe you’ll want to pass the information down through management staff and have them inform entry-level employees of the changes that are to come.
Will you have an assistant or representative handle suppliers, or will you do it personally? Who will be talking directly to the buyer most of the time? Every decision has pros and cons. So, think it through.
4: Construct the Narrative
At first glance, building your communications around a “narrative” sounds fairly insidious. However, when making an M&A communication plan, you should realize it’s perfectly ethical and necessary, and here’s why.
Throughout the transaction process, you will be having many conversations with the other party. You need an anchor that keeps those conversations on track and describes the main goal. That would be your narrative.
There are all kinds of cliches that can be used for this, and they’re expected. Whether you focus the conversation on how the transaction will expand their brand family, how well your business meshes with their brand, or something else, you need that core anchor point.
This will likely differ when speaking to employees, the media, suppliers, or customers. For example, you want to frame the change as a lucrative opportunity for your suppliers because the new leadership has more need for their product than you do, and for employees, you likely would want to frame it as a smooth transition with everything staying the same.
It all comes down to the goal we mentioned earlier, but having a narrative in mind to guide your conversations gives you a huge leg up on the inevitable questions and issues that will arise.
5: Plan Your Channels of Communication Well
Finally, you need to plan your communication channels down to the last detail. Communications get muddied when you “wing it”. You need to know exactly which channels you’ll be using for each of the contacts you’ll be communicating with.
For example, if you choose the email route to keep employees informed, you’ll want the work-related emails of every employee for both companies involved in the transaction. At least, in the case of a merger where both sets of employees are affected.
You’ll also want to familiarize those employees with the person and email address reaching out to them to ensure they know who is contacting them and why. It doesn’t help if your attempts to communicate end up in a spam folder or unread.
For speaking to the other business owner or investor, you’ll largely want to ensure the same person is speaking to them each time. This ensures that conversations maintain consistency.
When you just send a random representative each time, or you have several people involved spontaneously, people forget key talking points, stray from the narrative being used to anchor the conversation, and generally make mistakes.
You’ll need to determine the channel needed for each person being communicated with and stick to it.
Strategic Tips for Your M&A Communication Plan
The points we’ve mentioned so far are general steps you need to formulate your plan. However, there is a variety of other key points you need to consider while forming an M&A communication plan around each step.
1: Maintaining Employee Confidence
This is absolutely crucial. Employees, especially at the lower rungs of the corporate ladder, tend to get scared when M&A processes begin. Because mergers and acquisitions often imply layoffs of lower-level employees or even the full team, it’s fair that your loyal employees have those concerns. It is a part of many M&A processes, even if that’s not the intention with your current situation. However, that anxiety might be catastrophic.
Throughout the transaction, you’ll be sharing statistics that boost the other party’s confidence in the transaction, allowing you to get more money. If the other party’s confidence waivers, they can offer less to make up for the issues they perceive, or they might back out entirely.
Employees that become anxious regarding the sale might start underperforming or looking for new jobs to maintain stability in their own lives. When that happens, the stats you’re sharing with the other party will typically be less impressive.
Most business owners handle this by incorporating a non-disclosure plan into the employee aspect of their communication plans. This usually means that the employees won’t know until the deal is already worked out and finalized, but they will be informed before it takes place to maintain ethical employee treatment.
The same goes for suppliers, the media, and customers. You usually want the M&A process to be under wraps for as long as possible. It’s also a smart idea to conduct research and find M&A advisory services that’ll help you ease through this process.
2: Get Regular Feedback
Feedback is absolutely necessary while you’re communicating, regardless of which party it is you’re speaking to. Getting and listening to your feedback is crucial to ensure you can adjust your talking points as needed.
For example, you might notice that the other party isn’t responding to the narrative you crafted, or they might have feedback describing what it is they’re actually interested in. If you don’t accept that feedback, you can derail the deal or create conflict.
If employees give you feedback, and you can’t put their worries at ease, you can easily lose employees at a pivotal moment and lose value in the transaction.
Even suppliers can have ideas or feedback to offer regarding how their post-deal relationship should look with the new leadership, and in some cases, you might be able to use that as leverage and value.
While you don’t want to let everyone in on the deal too early, it is pivotal that you listen to feedback once your trigger event for that group occurs.
3: Be Prepared to Diffuse Conflict
M&A is like one big debate room. Everyone involved is going to have their own goals and motivations, and as such, the conflict will likely arise in various ways. You want your communication plan to include predicted responses from everyone involved and plans for dealing with those responses.
This will make you better equipped to handle anything from a miscommunication triggering a negative response from the buyer, star employees walking off the job due to unnecessary worries, and more. Anticipate areas where conflict will arise, and work resolutions into your plan to deal with them.
Get Help with Your M&A Communication Plan
We’ve outlined the basics of how to make an M&A communication plan, but an M&A transaction is far more complicated in practice.
Depending on your specific situation, the number of variables you have to deal with can be overwhelming.
Luckily, we’re here to help. We specialize in helping middle-market businesses handle every step of the M&A process, including the transaction itself, preparation strategies, and even post-sale support to help you make the most of your life’s largest earning event.
Contact us today for help with your M&A communications plan, and get the assistance you need!