February 15, 2013
Once two companies have done the dance and determined that they are right for one another, the negotiations process moves forward down a long, and sometimes winding road until it is time to announce the transaction.
Whether it’s a merger, acquisition or a significant strategic partnership, a major transaction is sure to raise questions among a broad range of stakeholders.
Employees worry about possible redundancies and their own job security. Customers wonder how the deal will affect product quality, selection or service. Vendors and suppliers start to ask what they can do to make sure that they maintain their preferred status. Investors want to know what the transaction means to them. Regulators, in many cases including the Securities Exchange Commission, have their own interest in what the companies involved have to say, when they say it and how they say it.
For these reasons and quite a few more, major transactions require that these companies have a solid communications plan in place.
While each transaction has its own defining characteristics, there are some consistent practices that make planning to announce a transaction go smoothly.
The purpose of communications when announcing a major transaction is to convey the information clearly and thoroughly to a broad number of audiences in a timely fashion. The goal is to provide a certain level of credible reassurance to everyone who the transaction may affect. And in cases where reassurance would not be possible, then the communications priority should be to manage expectations responsibly.
One of the first priorities in planning to announce the deal is make sure there is proper coordination between the two parties involved in the transaction. Everyone must have a clear understanding of the timing and protocols of communication as soon as possible. Once you achieve this, it is possible for the individual companies to prioritize the major targets for communications.
Naturally, in a major transaction, many stakeholders are highly important: institutional and individual investors, customers, vendors, employees, unions, retirees, banks and lenders, industry analysts — among others. Some of these groups, such as employees, are subdivided into salaried, hourly and by geographic location. Make sure to parse these audiences as narrowly as possible if there is the need to customize communications.
Since most major transactions take time to negotiate and eventually close, there is usually ample time to lay the groundwork for an effective communications plan. This will give you the chance to consider and target the interests and concerns of each audience in advance. The systematic process for doing this most effectively is called message mapping.
When properly executed, message mapping addresses the questions or concerns — the self-interest — of each stakeholder as part of the larger plan.
Message mapping starts by identifying key stakeholders and then their major concerns or questions. Typically, a list of these audiences and their corresponding concerns are organized on a table chart or spread sheet.
Once you have indicated the major audiences and their concerns, and developed drafts of the key messages addressing those concerns, it is important to gather data and background information to support those messages.
In addition, you must finalize in advance the timing and delivery systems for all communications. You don’t want employees, customers or valuable business partners to learn of a major transaction from the media. Since you don’t have control over how the media will present that news on television, in newspapers or on the Internet, you want to make sure that you deliver your message soon after the deal is closed.
Depending on the nature of the transaction, the complexity of the information, the diversity of targeted audiences and the geographic challenges, deliverables will vary not only in nature but also in sophistication.
The following is a basic list of tactical tools most likely to drive communications around a major transaction announcement:
With some transactions, you may have the time and resources to conduct advance research to gauge concerns and attitudes among key audiences. If you do, then make sure that you conduct follow-up research as well.
Following the transaction as the post-announcement process unfolds, the company will have the opportunity for both formal and informal debriefings and evaluation. It is best to start thinking of how this might take shape before making the announcement.