Handling the Announcement of an Acquisition

Mergers and acquisitions are stressful events for pretty much all involved. By the time a deal closes, the management team on both sides is often quite exhausted. But, ironically, this coincides with one of the times when everyone now wants your attention: the press, your channel partners, your customers and, perhaps most importantly, your current and new staff. Plus it is also a time when the management team is most expected to be totally coordinated and aligned. It is quite a challenge!

I find that good planning and preparation is essential, particularly for the day of announcement. Pulling together a task force that represents executive management, sales, marketing, HR and finance/IT is important to ensure that all the angles are covered. And having (or being) a strong coordinator will not only "get the job done", but (if done properly) it will pay dividends in terms of sorting out issues before they become a crisis.

At the announcement of the acquisition, everyone is wondering "how does this affect me?" I find the best way to prepare for that is to produce a detailed set of questions and answers, consolidated into an FAQ. Figuring out a way to consolidate all the questions and answers into one place will help improve consistency and reduce redundancy. But at the same time, it is usually important to tailor the FAQ for each audience. This can be a publishing challenge, unless care is taken to set up a good template and publishing workflow at the outset.

From an audience perspective, a matrix view helps. On one dimension, there are basically two groups: the acquiring side, and the side being acquired. Within those groups, it is helpful to segment the audiences according to: press, channel partners (resellers, OEMs, and others in the ecosystem), customers, staff.

Sensitivity in handling staff is key. For the acquired side, you will be making a very important first impression. It is my observation that the general order of needs for acquired staff is (most important first):

1. Clarity on what just happened
2. An explanation of why. This should not be too detailed. But it needs to be enough so if a friend or spouse asks them (having heard the news), they can formulate a good answer. Don't expect people to take this in, when the initial announcement is made verbally. Write it down so they can read it later.
3. Clarity on what it means for their job. Rather importantly, do they still have a job? What does it mean for their job tomorrow, next week, next month?
4. Clarity on the immediate process they are about to enter. For example, will they be asked to sign new paperwork? Are they expected to meet with new people?
5. Reassurance on benefits and policies. Many people, when told of an acquisition, immediately seem to get anxious about their benefits. How will they be paid? How is their medical or dental coverage affected? Should they keep their doctor's appointment tomorrow? And so on. The initial announcement is not the time to get into details. But it is important to acknowledge that management recognizes how important this is to the employee, and that proper plans are in place to answer such questions.
6. Reassurance that their new management cares about them, and is going to be a good steward for their business.
7. Clarity on what they should do as soon as the announcement meeting is over. Specifically, how should they expect the rest of the day to go? How should they respond to questions from outside (channel, press, etc.).

Item number six on the above list has the most important long term ramifications, and is perhaps the most open to interpretation on how to do it. From my perspective, here are some things to consider:

1. Be well prepared, and invest the time and effort to make sure the announcement is delivered as professionally as possible. This sounds obvious. But if the M&A process has been draining and challenging (as it typically is), it can take a conscious decision to get everyone up to being their best.
2. Be respectful of the management team of the acquired company. Have them as an integral part of the announcement. Even in cases where the leader of the acquired company is not part of the acquisition, give them the opportunity to celebrate their leadership and exit on a high note. The staff will be watching carefully to see how the management team (which they know and trust) is treated by the new management.
3. Be genuinely excited and authentically and articulately communicate that excitement.
4. Be open, accessible and respectful. The hours immediately following the announcement are key. It is often a difficult task to be accessible when press, customers and channel partners are trying to get your attention. So work together as a management team on a shift-like basis so that someone senior is visible and accessible pretty much all the time.

One challenge regarding accessibility is that the senior leaders of the acquiring company want to support their existing staff during the announcement, in addition to the acquired side. Almost inevitably the announcement needs to take place at two separate locations, and you can't be in both places at once. I recommend sending the most senior leader, HR leader and the executive likely to be most involved with the newly acquired team to the acquired location. Also, if at all possible, deliver the announcement with a video conference between both sites. Properly handled video conferencing is a great way to bring both sites together. But rehearsal and proper preparation is key, because A/V problems when trying to deliver such important news is highly distracting.

It might sound like overkill, but having a "day of announcement" plan that is thought through down to the minute is very useful. And (obviously, but not always done) make sure the plan is fully understood and supported by the key players for the day, on both sides.

Because of the "shock factor" involved with delivering the news of the announcement, the meeting itself should be brief. Likely between 15 and 25 minutes. The purpose of the announcement meeting is not to handle all questions and to communicate a lot of information. Instead it deliver the news and set the tone for the rest of the day.

The FAQs, therefore, are a key way to communicate the detail that will not be covered in the announcement meeting. But they also serve a secondary role. By putting yourself in the shoes of each of the audiences, you can predict most of the questions they have, and drive resolution on key matters in advance. This is a great way to ensure that the acquiring company is properly prepared for the acquisition.

That said, it is important to reinforce that it is OK to say "I don't know", when that's really the case. Acquisitions often do come with a good deal of uncertainty. Combined product strategies may not be completely thought through. Organizational changes may need to be figured out post-closing. And so on. An honest "don't know" or "that's something we still need to figure out" is often much more appreciated than avoidance or bluster.

If all this sounds like a lot of upfront investment to make the announcement a success, it is. But I can say with confidence that the rewards of "getting it right" are immense.