It’s often the very best people that bail out when acquisitions are badly managed.
Corporate communication can save good employees and customers during the acquisition process if used wisely. The loss of key people and customers is extremely costly. The investments in team and resources to preempt these losses are quite modest in comparison.
Because it is a difficult topic with no single right answer, management often fears saying anything that might disturb the troops. When nothing is said & rumors become the key to information, employees ride the emotional roller coaster that drives those who can move on to consider other possibilities.
The key man of a manufacturing plant decided that he should have been in the loop & when he found out days before the closing, he moved to another plant not far away that had been chasing him for years. Without the key man, the 80 old owner lost the sale of & eventually his business.
Financial diligence is more straight-forward and often gets the most attention, leaving non- financial audits & corporate communication under-valued and often attended to as an after-thought.
Attention to this detail should be a primary concern for any acquiring entity, and finding the talent and resources to make sure it is addressed in a professional and balanced fashion can be one of the most important pieces of due diligence both pre and post-merger.
Have something to add?
Got a different point of view, want to play devil’s advocate, or just think we’re all wet? Post your experiences or examples
#1 by Marty Zess on December 30, 2011 - 4:12 pm
I agree that if the transition were to be handled with the most information being given out then the employee’s state of nervousness would be less. That’s not to say that all of the people would ride out the tough times but, the percentage of people that stay might be higher. Unfortunately, the lines of communication are usually handled like the nightly news cast, information that has been spun for you and not the truth whatever the news.
#2 by Jack Sims on December 30, 2011 - 4:28 pm
This is a tricky one, and having gone through this a few times I can tell you from experience that this is the time to put on the kid gloves. Go out of your way to think of the key people and how they will react to the whole process and what inconveniences they will have to suffer. These are the people who helped get you into this position, and you will not progress without them, so put out a lot of TLC and some Golden Handcuffs wouldn’t hurt.
#3 by Wayne Lion-Cachet on January 3, 2012 - 11:29 pm
I feel that to have the best chance of success when it comes to employess that have over the years been loyal, hardworking, and at times pissed off, is to move them out of being exactly that and make them have real ownership by making them share holders.
#4 by Lynne Talarico on January 5, 2012 - 10:50 pm
If there is a rumor of a layoff these days, employee’s now no matter if they are key or not will start looking for another job. This kind of a rumor in the work place is like a cancer. It disrupts all production. There is not way of keeping it a secret from anyone. Even the people who are very key feel disposable. Yes there are people who are slackers that most likely need to be let go but I have found that most people are hard workers and take pride in their work. Most people are key and not disposable. There is no way a company can have a layoff and not lose key people.