CONNECTIONS

An Edelman perspective on making meaningful employee

connections that deepen engagement, build trust
and accelerate business performance

A MATCH MADE TO LAST

Like marriage, mergers need good communication to beat the odds
Tamara Snyder, Senior Vice President, Employee Engagement
Jeff Zilka, Executive Vice President & General Manager, Financial Communications
Roughly half of all marriages end before death do us part, and experts will tell you it takes effort to keep a
long-term relationship alive. Yet as hard as marriage between two people may be, the corporate equivalent
mergers and acquisitions (M&A) is even tougher: Various sources say anywhere between 60 90 percent of all
integrations fail to add shareholder value. In other words, mergers fail more often than marriages.
Despite these sobering statistics, corporate M&A, like marriage, is here to stay: Globally, merger activity in 2015 is
on track to top a record $4.58 trillion in value. Like partners undergoing prenuptial counseling to prepare
themselves for life together, acquirers can increase the likelihood of merger success by addressing the
compelling, and sometimes opposing, needs of their diverse audiences, from employees and the financial
community to customers, suppliers, elected officials, local communities and regulators.

The Many Stages of Corporate Marriage

Similar to personal relationships, the union of two
companies unfolds over several stages, each of which
presents unique employee engagement and financial
communication challenges:
Pre-Announcement: As both parties negotiate a deal,
they are setting expectations for what life together
might be like. Is the merger about growth, to tap
revenue or market opportunities? Or is it about cost
savings, which poses additional communications
challenges? Both parties also benefit by understanding
each others corporate culture and communications
style. If they can agree on price, as well as other
business and cultural concerns (sometimes including
the new companys name) they have a deal!
Announcement: Much like an engagement, the two
companies then communicate their intent to join
forces and explain their reasons for doing so. From Wall
Streets perspective, in an all-cash transaction the onus
is on the acquirer to explain why this merger is a good
deal for its shareholders.
In an all-stock deal, both parties must explain why
getting hitched is likely better than each company
continuing to go it alone. The acquirer will need to
outline its high-level plan for integrating its merger
partner.

Initially there will be more questions than answers,

and employees may express a wide range of
reactions to the news, especially if its a surprise. And
employees at the acquiring company may perceive
the news very differently than those being acquired.
Pre-close: Its during the period following the
announcement that the myriad legal, regulatory,
financial and other concerns are worked out, often
including combined companys management and
structure. Speculation and rumors increase the risks of
distraction, business disruption and turnover prewedding jitters, if you will. Its important to let
employees know that the transaction is on track,
even if theyre not hearing much about it.
Day 1 100: The first few months two companies are
legally one, although true integration has only just
begun: think of the wedding and honeymoon
period. Much like a wedding, organizations often
stage Day 1 celebrations to rally employees
enthusiasm, unveil new branding and introduce the
combined companys leadership team.
Integration: Imagine a long-term relationship after
the newness has worn off. This is often the most
challenging phase that can take years to complete.
Operations, systems and processes become more
integrated, but employees may continue to identify
with their legacy organization for quite some time.

2015 Edelman

The Hard Work of Staying Together

To mitigate these concerns:

Like marriage, the real work begins after two parties

are legally joined. Its in the integration phase that
mergers begin to work, setting the stage for creating
value for all stakeholders, or begin to fall apart.

Be as clear as possible about the scope of change

expected. Where there are market opportunities for
the combined business, point them out. If reductions
are anticipated, give specific numbers as soon as
youre able.

Note if changes are confined to specific locations,

business units or employee populations. Some
pockets of the workforce will experience greater
change than others think field sales with customer
overlap, backend support functions with increasing
workload so target those groups for early and
frequent engagement.

Conversely, very little may change for the average

employee until long after the transaction closes, so
manage expectations about what will and wont
look different on Day 1.

Just as importantly, articulate what should not

change. Every company has unique characteristics
that are core to its success and worth preserving.
Talk about the distinct behaviors, cultural behaviors,
leadership philosophies and fundamental values
that will endure despite change, and make sure
leaders model and reinforce such attributes.

Integration can fail for a whole host of reasons, from

lack of strategic fit to competitive dynamics. While
communication cant fix operational issues, many
common challenges - such as concerns over job
insecurity, resistance to change, fear of the
unknown, torn loyalties, culture clashes can be
mitigated through open dialogue and effective
information-sharing.
Here are five employee communication strategies to
establish a strong foundation for successful
integration:

1. Educate employees on what to expect.

Employees are bound to ask every question you can
imagine, from what will our company be called? to
will I still have a job? Many such questions will take
weeks, if not months, to answer.
One way to mitigate this frustrating reality is to clearly
outline a timeline of when key decisions will be made
and how employees will be kept informed. This limits
employees anxiety of starting every morning
wondering, is this the day?
Moreover, when asked an unanswerable question,
many leaders are deeply uncomfortable leaving it at
I dont know or I cant share that yet and fill in
the blanks with their own hypotheses.
This can lead to a swirl of inaccurate or conflicting
information that is fertile breeding ground for rumors.
Pointing to a definitive date helps temper such
speculation.
Its also important to put changes in perspective. In
the absence of tangible information, its natural for
employees to assume the worst or over-estimate the
magnitude of change.
Known in psychology circles as catastrophizing, its
a cognitive distortion that leads some employees to
assume everyones job is at risk, workloads will
quadruple, workplace culture will disintegrate and
nothing will ever be as good as it was before.
Yes, history is littered with examples of failed mergers
where these fears and worse came to fruition, but
the truth is likely less dramatic than such doomsday
scenarios. After all, very few companies would
choose to undertake integration if they knew it would
end in disaster.

2. Listen, learn, then adapt.

In times of change, the smallest details take on outsized
importance as employees look for clues about the
future. Word choices are scrutinized, and everyday
occurrences become symbolic.
Thus its critical to know what is on employees minds
and how they are reacting to communications. Only
by keeping a pulse on the organization can you
correct misinformation, address emerging questions
and adapt messaging accordingly.
One company stopped using the classic remember
that its business as usual in communications when
focus groups revealed that employees found the
phrase downright patronizing.
Similarly, another firm spinning off a line of business
referred to the transaction as a separation until it
learned many equated the term with employee
terminations.
Increasingly, companies are turning to mobile-friendly
feedback forums as a modern supplement to
employee focus groups. A host of smartphone-ready
tools are available, such as TinyPulse, DropThought,
and The Vision Lab, making it easier to engage
employees despite infrequent access to email or an
intranet (think frontline, manufacturing or otherwise
non-desk workers).

2015 Edelman

3. Get leadership out there.

Chances are, there are new faces on your
combined leadership team. Put management on the
road literally and figuratively:

Encourage leaders walk the halls, visit other

facilities, drop by staff meetings, eat lunch in the
cafeteria, lead town halls and volunteer with
employees for community service projects.

Consider developing a standard run-of-show that

allots time for such engagement activities any
time a leader makes a site visit.

Sometimes it helps to pair up a lesser-known

leader with a well-respected one, or have leaders
trade places for day the head of sales joining
the finance departments meeting and viceversa, for example.

Make management available for dialogue via

Ask Me Anything forums on your intranet, similar
to Reddits Q&A free-for-alls, or have them host
virtual (or real) office hours when leaders are
available for conversation.

Ask executives write their own biographies in the

first person and include personal anecdotes that
demonstrate their commitment to company
values.

In other words, humanize your leaders and use them

to facilitate dialogue.

4. Invite employees to co-create the future.

You dont have to let employees name the
combined company to impart a sense of shared
ownership in the organizationalthough at least
soliciting employee feedback on a new name,
brand or logo doesnt hurt. Find ways to help
employees feel emotionally invested and involved in
the companys identity and future.
For example, as part of a post-merger rebrand, one
organization launched a video contest to help build
pride in the new name. Employees received a
package with branded items bearing the new
company name and were encouraged to
photograph themselves with the props; one group
went above and beyond, physically arranging
themselves to spell out the companys name in
human-sized letters.

Combined company values are another great

opportunity
for
employee
involvement. Many
organizations allow employees to vote on the values
themselves; others help make intangible concepts
such as integrity or teamwork feel more personal than
a list on a bulletin board.
During a new values launch, one company created a
Buzzfeed-style which company value are you?
personality quiz. The exercise sparked robust dialogue
and storytelling across the company: Employees could
share their results with their social networks, join online
discussion groups based on their value of choice and
similarly get paired up with a matching leadership
mentor. Some leaders even opened their staff
meetings talking about their chosen value and what it
means to them in everyday situations.

5. Generate passion and pride.

Finally, look for opportunities to create a sense of
excitement and optimism. Day 1 is a natural occasion
for celebration. One firm injected a sense of drama
and intrigue in the weeks leading up to Day 1 by
revealing the companys new name one letter at a
time on the intranet, Wheel of Fortune game showstyle. Others stage events where employees illustrate
their passion for the new company in an animated GIF
photo booth, contribute artifacts to a time capsule
commemorating the legacies of two formerly separate
companies or complete a firm-wide day of community
service.
Beyond festivities, pledging a new philanthropic
commitment or initiative is a great way to unify onceseparate cultures through a shared purpose even
better if you let employees decide which cause to
support.
Successful integration requires dedication, patience
and a great deal of thoughtful planning. While
communications alone cant solve the many
operational challenges inherent in bringing two
companies together, engaging employees throughout
the process can help make the journey a smooth one.

About Us
Edelman Employee Engagement helps organizations
accelerate business performance, delivered by
highly engaged and trusted employees. For more
information, visit us at ee.edelman.com or follow us
on Twitter at @EdelmanEE.

2015 Edelman. For more information, contact us at employee.engagement@edelman.com.