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From the moment that it is publicly announced, navigating through a merger and/or acquisition can be a stressful experience for an organization and its teams — but it does not have to be.
According to KPMG, last year was a record year for mergers and acquisitions, and numbers are poised to climb higher in the year ahead. Deal makers around the world announced $5.1 trillion worth of M&A transactions in 2021, which was up from $3.8 trillion in 2020 and the highest level since 2015.
Having been part of the acquisitions that the H&H Group executed in the past two years to bolster its growing Pet Nutrition & Care Division, and both founding and selling a majority of the pet food brand I and Love and You, I know that these complex milestones in business have meant incredible moments for a company’s growth and have brought together some of the greatest leadership teams. Mergers are strategic opportunities that often bring about expansion and innovation, but with the excitement of the transformation can also come apprehension surrounding the changes.
While mergers have advantages like reducing the cost of operations, increasing market share and expanding the business, they can also come with risks such as creating gaps in the chain of communication or introducing the threat of unemployment or restructuring. Employees may feel anxiety and uncertainty, and to mitigate these fears, your internal communication plan should be multi-tiered, clear and intentional. Information that is shared with your teams should add clarity, not confusion. Knowing how to navigate your teams through the complexities of this business venture can increase your chances of having a successful merger. Here are three things I suggest for a successful transition:
1. Show empathy
To lead a successful merger, your leadership team must acknowledge the impact that it will have on employees. There may be feelings of insecurity, anxiety or excitement at all levels, and acknowledging the various feelings of your teams during this time and allowing for those emotions to be high as employees take time to accept the changes is important. While it is common to see voluntary turnover during this time, I have seen open communication and empathy mean the difference between failure and success.
As Joey Pomerenke points out in an Entrepreneur piece, “The companies that will last are those that make the effort to understand their employees, investors and customers, and give back to those who support them.”
2. Build excitement through community
Not all emotions around mergers and acquisitions will be negative. Taking the time to communicate with your teams about what the organization’s vision and strategies are and what lies ahead for them in a way that generates excitement and innovation (and not dread) can be the key to keeping positive momentum. When Zesty Paws was acquired by H&H Group, it was a pivotal moment in the brand’s evolution and a testament to the amazing work each member of the team had been doing prior to the transition.
As we began the process of aligning on roles, functions and responsibilities, we continued to build excitement for the team by creating opportunities for collaboration, both in person and remotely, and we set up an open feedback loop. Quantum Workplace also suggests setting up team-building activities outside of the office to encourage collaboration, community and problem-solving. By inviting your teams to come together, you can create a sense of community and trust during a time that may feel a little uncertain.
3. Honesty is the best policy
When you are crafting your internal and external communications around announcing the merger or acquisition, it is important to clearly and confidently (to the best of your ability) address how the merger will affect your employees. One of the most important ways to get your teams to trust the process is to be transparent throughout.
A few ways I have honored this transparency in the past were to host town halls, have in-person meetings or meet face-to-face with team members to listen to any concerns they may have and create feedback loops that fostered open communication. I have also found that sharing my personal experiences and stories with my teams has made all the difference in how we communicate throughout the transition. My teams know that even if I do not have all the answers for them at that moment, I will be honest and communicative when I do.
Mergers and acquisitions can certainly be a challenge, but I know success can be found on the other side if you anticipate and address these “organizational emotions” and approach the process with empathy, transparency and collaboration.