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What’s Your Story? – Win the battle by providing a story

by on February 27, 2014

StoryMergers can be won or lost before any real integration work ever begins.

As soon as the deal is announced, the battle begins for people’s minds.  Win that one, and you’re well on your way to victory.  Lose that fight, and your merger is far more likely to wind up in the failure statistics.

Provide a Story

Everyone needs a story.  As explained by Dr. Deborah Pruitt in Group Alchemy, the Six Elements of Highly Successful Collaboration, stories are how we make sense of what happens around us.  This means that there are always many different stories operating in any group at any time.

As the CEO you must give everyone a believable story from the outset, something they can get behind, including possible problems and issues.  If you don’t employees will make their own stories and it’s not generally a good view of the company or the deal. At the least, there will be uncertainty and that stops momentum, and that exacerbates any issue.

Set Expectations

You should move swiftly and purposefully to set the proper expectations.  As CEO, part of your job is to promote the deal but not to the point of defending it.  It’s a fine line because if you pump people up too much you cross the line into the dangerous zone.  Lean a little too far either way and the job gets harder than it has to be.

First announcements from the CEO puts a heavy emphasis on the merger’s appealing aspects.  This is always the sales job, with the maximum amount of positive spin. The risk is over-promising.

Be Believable

To be good at this you’ve got to be believable.  Without that you can’t carry much influence.  And to be believable it’s best to report both the favorable and the not-so-favorable sides of the merger story – people will put more faith in what you say because it sounds less like propaganda.

In M&A, almost anything a CEO and its team says can and will be used against them.  This is not a matter of saying less, it’s about picking your works carefully. Like a raw nerve, people will react to the slightest hint or innuendo, reading far more into your statements than you intend.

Don’t Over Promise

Definitely don’t say promises you can’t keep.  Some classic ones are:

  • “There will be no layoffs, reductions in force, terminations, and so forth.” Seriously?  Every merger is a financial proposition justified by either cost reductions or revenue enhancements. [see my post on this, Cost-Cutting vs. Revenue Growth; The Deal Determines the Process]  Quite often, either case calls for streamlining, reassigning, downsizing, optimizing – if not in the aggregate, at least in pockets of the organization.
  • “This is a win-win situation.”  Somewhere people will feel like they’ve lost, and they’ll say you reneged.
  • “We plan to complete the integration by the end of next quarter.” Be careful here, because most mergers take about twice as long as expected.  Miss one milestone and the critics will howl.
  • “We plan to continue business as usual.” If this were true, why merge?  A merger is a supreme case of business as unusual.

Transition Phase

The message that needs to come across in the story you put forth is that the merger integration period is a transitional phase.  Yes, there will be uncertainty, more work, and some changes, but the company WILL move beyond these issues.

Without this proper framing employees will confuse the issue, presuming that the pain of merging is what life will be like after the merger is complete.  Help them understand the fact that this, too, shall pass.  

Finally, do not make the mistake of trying to keep people happy during this tumultuous time.  For the most part, that’s unrealistic.  Far better for you to get them mentally prepared for the hard work and emotional strain that lie ahead.

p.s.

If you’re wondering how you build a company that you can sell for a premium in a few years, contact me to discuss the Valuation Amplification Process.

I also invite you to download the white paper and learn the 5 step process on How to Quickly Increase Your Valuation: a Proven 5 Step Process.  http://www.therevenuegroup.net/free-offer.html

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From → Integration, M&A, Strategy

2 Comments
  1. Margaret Levy permalink

    Good advice. These are universal truths for any kind of merger, re-organization, down-sizing, right-sizing, or generally managing through change.

  2. Spot on, Mike, and of course the steps after the close are critical. The best follow-on to ensure a successful merger I’ve seen up close was Cisco’s 1999 acquisition of Monterrey Networks. The rhythmic flow of good news every 3-4 weeks for a year resulted in a low single-digit turnover during the first 12 months. The planning that went into it was obvious.

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