What is the Organizational Cost of the words used by Leaders during a Merger and Acquisition (M&A) announcement to employees?

On the day of a significant announcement just a few overly optimistic, albeit well-intentioned, words can lead to enormous organizational costs such as decrease of employees’ engagement, loss of expertise, impacts to customers or to the brand, not reaching the expected synergies, etc.

This article aims to answer the question ‘Why the words used at the announcement are so significant’ and, to raise awareness among anyone involved in a M&A process, or even an employee experiencing it.

Imagine being an employee arriving at the office one morning, unaware of what awaits. Suddenly, there’s a meeting on the agenda with a major announcement: the company they work for has been sold! The words used at that moment are so significant that they become a form of promise from the new employer, the acquiring company. The words chosen by the current employer are just as critical too, offering their own form of promise that influences how employees navigate the transition.

Now, envision being one of the executives participating in the announcement. How can you create a climate of trust, maintain employee engagement, and be both inspiring and transparent? The question is also how transparent can you be?

These leaders should be as transparent as possible, but also short and crisp considering the capability of the employees to process all information communicated at that moment will quickly be limited by their emotions.

Based on my 20 years of experience in Organisational Development, including numerous mergers and acquisitions, here is my recommended approach for delivering the announcement:

• Be well-prepared: Familiarize yourself thoroughly with the prepared material to explain it naturally and with confidence.

• Be authentic: Don’t hesitate to say, “It’s too early to confirm this” or “I don’t know.” Reassure employees that it’s normal not to have all the answers at this stage.

• Be transparent: Acknowledge that changes are inevitable. Some will occur in the coming months, while others may take years—this is a natural part of the process.

• Be empathic: Put yourself in their shoes and imagine how they feel. They are understandably stressed by the unknown—this is human and fair!

• Be self-aware: Your non-verbal cues and tone of voice matter as much as the content of your message. Remember, you are their first point of contact with the new employer.

Employees want to understand the rationale behind the acquisition without it being sugar-coated or presented as universally beneficial. They know they’re not the reason for the transaction, and honesty will go a long way in earning their trust.

Then, here are my advice for the weeks following the announcement.

The attitude to be adopted towards the employees from the acquired company:

• Empathy and understanding: It is normal for them to experience a range of emotions, including confusion, sadness, anger, or joy, excitement, and curiosity.

• Support and promote collaboration: create exchanges opportunities between employees from both companies; this is the best way to learn and experience the new culture. More travel will be necessary; in-person meetings become a must!

• Equip employees of the acquiring company: often forgotten, these employees also need information as they might be in contact with the new employees very soon. After the announcement, share with them information about products/services, employees’ number and location, etc. Also, clarify what changes they should expect for them.    

• Assess the talents: A ‘form’ of talent review should happen much sooner than expected to develop a retention plan for key personnel, but also to identify change agents and high-potential employees to give them an opportunity to participate in the change.

And lastly, here are my advice for the employees in the acquired company:

• Be open, receptive, and realistic – things will change, but change can be positive, and it’s essential to give a real chance to the new employer. Bringing challenges and resistance would not help anyone!

• Engage in your introspection, question your mindset, and avoid being overwhelmed by what you cannot control. Learn to be patient and to put your energy at what you can control.

• Be open to others, create connections with new colleagues and learn about the new company.

In conclusion, the weight of the words used during such significant announcements is crucial and will resonate for years, as it was received as the employer promise!

The preparation is critical for all leaders involved in the announcement and the following days. Take the required time to prepare them and seek for external guidance to get neutral perspective and learn from other experiences.