When there’s M&A activity in the air, which I predict there will be in late 2009 in big numbers, it is inevitable that it will also create uncertainty if not downright panic among employees. We will witness competition among them to be best positioned on the ‘value to the company’ scale for when the crunch comes and change singles out the weakest and the best. Recruiters will receive many enquiries. Promotion plans will be temporarily shelved. The inevitability of duplicated roles will cause restless nights. Mortgages, car repayments and school fees spring to mind. Family holidays move off the radar. Commercial real estate agents venture a call.
The concept that people are crucial to the success of M&As and ultimate brand value has not exactly been respected and managed too well in the last few years. And there are plenty of examples I can quote for you. I believe this will now change in these stressed times, as companies wrestle with the pressing need for greater efficiency and ‘bang for buck’ from expert consultants.
Most employees on average will be subject to two or three mergers or acquisitions in their working lifetime, and as a result will experience the emotional ups and downs of uncertainty, stress, lethargy, extreme camaraderie, isolation and many others. Although the popular press and the more prominent business consultancies will tell you that M&A processes have been cleaned up a lot of late, it has not been my experience, and certainly not at medium-size enterprise level.
There are cases where employees first hear about an M&A affecting their company by reading about it in the press. Timing and open communication therefore are very important.
The much quoted statistics of rampant M&A failure caused by greed and the inability to manage brands can be so easily repeated in this ‘mid-recession era’ we find ourselves in. These statistics will continue however, unless the companies involved and their respective advisers make a more determined effort to understand how brands work and the role they play in M&A success.
Employer brands in particular have been misunderstood and ignored in too many cases. I would like to think that company advisers in particular now recognise the important roles employer branding and communication play and the necessary investment in time, effort and dollars to make it work and help protect the deal and make a better company.
Remember this – people make M&As work and it is people who make better companies.
Who do you want to protect most in an M&A – customers, investors, employees or suppliers?
I’d recommend you start on the inside, because the inside affects everything on the outside. Once you have the inside fixed there’s a much better chance of success with your external audiences.
Human capital risks therefore are the most important... but they can be the most difficult to manage, particularly when emotions are high, when change happens, when retrenchments begin, job roles change and new working conditions are inevitable. Trying to integrate two cultures is one of the hardest jobs and will inevitably lead to natural attrition regardless of how well the process is handled. The more you invest in employer branding, the less likely this will be the case.
If you are faced with organising or managing an imminent M&A, I strongly recommend you read about our employer branding workshops – February in Sydney and March in Singapore.
So where does this leave the branding consultant? It sounds like he/she, apart from being able to advise on M&A corporate branding issues and related communications, has to also be an employer branding consultant. Now I wonder where you can find one of those in the Sydney, Singapore or Mumbai area?
Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Australia, United Kingdom and India, and joint founder of BrandSynergy in Singapore.
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