Sponsored: M&A Communications – Good, Bad & Ignored

When your press release announces an M&A transaction, then the media, your competitors and basically everybody should know about it.

Except they don’t.

In one M&A scenario a few years ago, my team worked on internal and external communications so that the growth team and partners could roll out news in a phased and timely way. Each partner was teed up with consistent messaging to communicate with their clients and referral sources. As you might guess, not everyone did this.

Months after the deal was inked, the MP found out that the acquired firm still had clients who knew nothing about the M&A transaction or that their key contact would soon retire. This is a bad look.

And why didn’t some of the partners follow through? Probably for several reasons:

• Rigid focus on billable work
• Fear over upsetting clients
• No incentive to follow through
• Unspoken resentments
• Lack of foresight about CX

Did they care about their clients? Of course. But change is hard. There can be hidden emotions and resistance to moving forward even as the deal nears completion. With that reality in mind, here are the good, bad and ignored aspects of M&A communication to help you keep people informed and moving forward with more trust in the process.

The Good

Growth professionals know why M&A communications are important. You want to sustain a positive internal culture for integration. You need to maintain open client relationships through the transition. And you don’t want competitors to sow doubt about your service promises, ownership changes, exits, culture or future team structure.

Look at the pre-close communications plan in terms of audiences and need-to-know timing. Consider each of the following audiences, roughly ranked here in order of need-to-know.

Communication is typically restricted to essential leaders during initial exploration and before a Letter of Intent. This includes the top governing/ownership group of both firms for a traditional M&A deal as well as external advisors. If private equity is involved, then you will include external broker/PE leads in discussions. As the deal moves into due diligence, then operational leaders such as the COO, CFO and compliance leaders (HR, IT, risk management) are brought into functional meetings.

Moving through this list, you will see that the growth team is often listed in the middle of the need-to-know ranking. However, a CGO, CMO and/or your strategic marketing leaders should be brought in much earlier. This can happen even before due diligence is complete or select partners/key employees are informed. Why? Because communications skills will be critical to deal with any conflicts of interest, anticipated questions and timely answers to key audiences. The growth team offers strategy for relationships and timing.

The Bad

What happens when growth strategists are brought in toward the end of a transaction? It’s bad when the only role these professionals play in M&A is to create an internal email for the team and a press release, leaving other communications up to operations or partners. Late to the deal table, the growth team has no way to share intelligence about key prospects, clients or relational conflicts.

For example, partners at either firm may be on an equity partner track which is potentially disrupted by a merger or acquisition. Anticipating what the deal means to their future at the firm can mean the difference between keeping them on board and losing them. Leaving this communication up to the managing partner may be ok in a smaller firm, but mid-sized and larger firms have too many competing responsibilities to confront the emotional pushback of this scenario. The growth team can prepare thoughtful messaging and sufficient detail about what’s next, with help from the operations and compliance team. “I don’t know” or “Be patient” are bad answers.

The Ignored

You don’t know what you don’t know. Communication details can get lost or lose context as messaging is reviewed by multiple stakeholders. The growth team is quality control to make sure that messaging is on brand, consistent across all audiences and channels, and updated if any players or details change.

Another issue that is often ignored is emotional resonance. In a people-centered business, your audiences want to feel safe and reassured through a big change such as M&A. Each person will have different needs, which is why some communications will land better coming from the relationship partner or go-to contact than from the marketing team. Growth strategists and leaders must truly collaborate to confidently inform audiences at the right time.

Which brings us back to the story at the beginning of this article. We have witnessed partners and key employees who agree on the outside to the changes happening through M&A, but inside they may have different emotions. They may feel cheated, checked out, overwhelmed or even numb. This is one reason why integration can be such a painful and costly enterprise once the ink dries.

As strategic growth professionals, your role may change, too, and that can be challenging when trying to direct or support transaction communications. One solution is to engage outside consultants to support your important work. Most importantly, tell leaders why your role early in the dealmaking process is critical for future integration as well as team and client retention. As they focus on the financials, you are focused on the people.

Don’t be ignored. You can represent yourself and the growth team as essential to communication prior to closing but also long after the deal is done. To get started, here is a two-page checklist for M&A communications. It can help you have conversations with leadership long before a deal is in play.

Dawn Wagenaar is a brand strategist and principal of Ingenuity Marketing Group, LLC, St. Paul, MN, offering more than 20 years of accounting marketing consulting and growth leader insights. [email protected]