The mammoth M&A task can only be overcome if those affected become participants. This requires intensive communication. hkp.com came together with hkp//// group Partner Dr. Christine Abel for a discussion on the topic.

Ms Abel, the M&A issue is high up on your agenda strategically. What are the key elements here?
Christine Abel:
Awareness that a merger is not simply a matter of business, technological and legal concerns, but also the human issues. Staff as well as investors, customers and other business partners must be convinced of any deal, too. While all noticeable issues are literally cashed in on with the help of due diligence up to the point of signing, afterwards it is a question of presenting the deal as a shared success – the participants often being the prior negotiation partners, or at least a larger group of these.

How can the necessary persuasive efforts be achieved?
Christine Abel:
With intensive and target group-specific communication. Mergers are often initially a cause for uncertainty among staff and other shareholders. Each affected individual asks themselves two questions: What will the new company look like? And what does that mean for me? Companies must answer both questions are soon and as clearly as possible.

Facts, facts, facts – and always with the stakeholders in mind?
Christine Abel:
Factual information on a deal is actually very important. This information should however be linked up in such a way as to create a vivid story that convinces with its rationale and rouses emotion. It is a question of demonstrating the rationale behind a transaction and winning over stakeholders.

The reasons are often simply a matter of synergies.
Christine Abel:
However, synergy stands not just for efficiency, i.e reduced outlay. Synergy also means achieving added value through a pooling of resources. The full story should therefore explain why a merger or comparable transaction is necessary, what the business model and the strategy of the new company will look like – and the associated added value for staff, customers and investors or society.

Will all stakeholders be able to identify with such a wideranging story?
Christine Abel:
Stories like this give an overall picture; they demonstrate to all those affected the benefit of contributing to this and playing a part. Staff and other groups should however also be addressed with respect to their specific interests and the information that they require.

What does that mean for communication with staff?
Christine Abel:
What is crucial is that the top people capable of leading the new company to success are appointed early on. These employees should not only be offered attractive monetary retention packages, but also made aware of the role they will assume in future and what opportunities they will have.

Success is more than just a top-level affair …
Christine Abel:
Absolutely, that has been forgotten in many transactions. The communications team must make clear to all staff what the future structure, the corresponding jobs, the new salary system, the career landscape and the relevant HR programs, for example, will look like. Executives and experts in strategically relevant roles in particular must recognize a positive future situation for themselves in order for them to be able to set an authentic example.

But nothing can be communicated until plans are in place. When, in your opinion, should HR be involved in the relevant planning processes?
Christine Abel:
HR should address and incorporate all staffing-relevant issues early on. Incidentally: a merger will see the coming together of two HR departments. The new HR department must develop a new business model for itself too. Communications should take place within the HR department to create identity. And HR should make this clear to customers in order to convey a profile.

All in all, transactions like corporate mergers or spin offs are complex processes. How can the M&A team tell whether processes are going in the right direction?
Christine Abel:
Pulse Surveys have a proven effect here. These are a means of regularly identifying which measures are effective and what the mood is. Companies can immediately see where they could be providing better information and guidance and where there is a need for motivation. The M&A process, its monitoring and ongoing communication belong together.

How can the bigger picture be conveyed with this communicative diversity?
Christine Abel:
This is primarily the responsibility of the new company’s CEO. He or she must be positioned in relation to the overall story, communicate it convincingly and truly embody it. S/he represents the merged company, its strategy, values and culture. What he or she says and how they do so impacts on the success of a merger. One thing is clear, specifically where the CEO is concerned: communication is key, it isn’t sugar-coating, it’s a management instrument.

 

Thank you very much for your time Ms. Abel!