For M&A to catalyze sustainable business opportunities, its primary aim should be to propel employees, customers, and organizations toward enduring success. However, to transform an M&A deal from a mere business transaction into a strategic accelerator, it is essential to keep sight of the value M&A unlocks for stakeholders and to communicate that effectively. From an M&A deal’s early days in the Board room to the communications professionals who plan, implement, and monitor the effectiveness of your strategy, communication can serve as a guiding principle for your organization, helping to keep you on target towards success.
Research shows that inadequate communication has a significant impact on M&A processes, with some studies indicating that 70-90% of M&A deals face significant integration challenges – or even fail – due to communication issues. (HBR, 2020; Business.com, 2023) A failed deal does not necessarily mean it did not close; rather, it falls short of delivering the outcomes expected by stakeholders despite everyone signing on the bottom line. (Business.com, 2023) Looking at this phenomenon, a recent Statista study conducted among M&A practitioners worldwide reported that 34 % of M&A deals fail due to poorly articulated strategies or unclear deal objectives; a figure that can be directly linked to the quality of – and effort behind – communicating the change and future direction of involved parties (Statista, 2021).
This article will explore the important role that effective communication plays in every M&A deal, and why making it a priority can help your organization get the most out of these transactions. We will examine the value of both internal and external communication strategies, and of involving the right stakeholders at the right time. We will also show you how communication can be a tool to help clarify your vision, align expectations, and overcome the challenges that M&A presents.
“This article will explore the important role that effective communication plays in every M&A deal, and why making it a priority can help your organization get the most out of these transactions.”
Five Principles to Master Successful M&A Communication
1. Define a winning narrative that brings people onboard
You need a winning narrative that resonates in your stakeholders’ hearts and minds and persuades them that this is a logical next step for everyone’s benefit. This narrative will loop in employees, lawyers, the press, your ownership structure, and potential counterparties before officially announcing the M&A deal. It’s similarly important to have your fallback story in place in case your deal does not go through. After all, this is still an early stage of the process, which comes with many uncertainties until the very end.
2. Involve the right stakeholders at the right time
M&A processes are usually kept highly confidential, with only very limited internal and external stakeholders involved. This can present a challenge for someone tasked with strategic communication, which requires information from various individuals to be effective. Therefore, it is vital to humanize this process by involving the right stakeholders at the right time. If you are not prepared for the staggered involvement of stakeholders, you will quickly discover a significant scope creep, as more insights, input, and approvals are required fairly early in the process. Remember to proceed carefully at this stage, mindful of the risks associated with sharing sensitive information, especially ahead of an official announcement.
3. Create common ground to keep the beat
After your M&A deal is officially announced, it’s time to get an overview of your organization’s internal landscape and external market. Creating common ground and shared purpose between the two parties is an excellent way to use communication as a tool to unify stakeholders while keeping everyone informed. It is also a valuable asset for avoiding rumors, easing uncertainties, and adopting a proactive stance amidst potential market volatility – or even competitors hoping to throw a wrench into the proceedings. Make sure to monitor both your internal and external communications closely and adapt your strategy to reflect the changing market conditions where needed.
4. Take control of the external story and leave no room for interpretations
The day your deal is signed marks a key moment in your M&A journey and represents a significant milestone that has the power to reshape your organization’s external image. Harnessing this opportunity through strategic communication means the chance to tell the story of a dynamic company on an exciting path, unburdened by the constraints of pending negotiations now that the deal is finally settled. Don’t let this moment get lost in the administrative shuffle; prioritize your external communications and keep the spotlight on what lies ahead for your organization as you move into this new chapter.
5. Hear the people, empower your employees
Post-merger integration and change implementation take the focus now, aiming to create a secure haven for all stakeholders, from employees to investors and the public. Acknowledgment is key for your employees, so be sure to celebrate successes even as you assess areas that may need improvement. This acknowledgment doesn’t have to be confined to internal communication; it is also an opportunity to share achievements that made an impact beyond the organization. Just remember as you progress on your M&A journey that streamlined integration and adaptation are the true hallmarks of a successful deal.
The heartbeat of M&A: level of communication and engagement both internally and externally along the three phases of the process
M&A communication and engagement have a unique rhythm. They are like two intertwined strands of a rope, each with its own role and function while also depending on each other. They mirror the pulse of the M&A process in a way that resembles an EKG chart, with periods of low activity followed by bursts of high intensity at the key moments. This image captures M&A’s dynamic nature, where communication and engagement set the tempo for every strategic step.
