In her recent article in Forbes, Hilary Kramer, chief investment officer for A&G Capital Research, references a study from Thomson Reuters and Freeman Consulting Services that concludes “the global market for M&A will surge 36 percent in 2011 to over $3 trillion.”
But there’s an interesting flipside to this. More than 60 percent of all mergers fail to achieve their financial goals, and 20 percent of them actually reduce the value of the merged company, according to Fast Company blogger Paul Glover.
The numbers raise an important question. If you’re pursuing a deal, what must you do differently to be successful?
The importance of a good communications strategy is becoming more widely recognized within M&A communities. By integrating communications strategy development, alongside transaction strategy, into the earliest stages of planning, companies can positively impact their M&A transactions.
The following five communications considerations are important during the preparation for and execution of any M&A strategy.
- Know that everyone’s looking out for No. 1. Your different audiences – employees, customers, suppliers, the community – all care about the same thing: how a deal will affect them in particular. So take a page from the consumer playbook. Create an emotional connection between your company and your constituents by making your message quick and relevant. Answer the question, “What’s in it for me?”
- Spell your narratives out in advance. It’s easy for companies to wait until they have all the details before they consider how to communicate them. But you know your story, or the vast majority of it, when you first start planning an acquisition. Work out most of your messaging in advance and fill in the details as you have them.
- Extend your communications strategy beyond the transaction. Don’t just provide details about the deal. Instead, share your vision for the future. Use the opportunity to passionately express the opportunities the deal presents, because that is what your audience really wants and needs to hear.
- Open two-way communications channels. Be as open as you possibly can with your audience, but remember that, while you can never over-communicate, you can over- inform. Make sure you open two-way channels of interaction to give your audience the means of providing feedback. This helps ensure you are giving them the information they care most about.
- Tell your own story. Because if you don’t, your competitors will be more than happy to tell their version of it for you. Use the press wisely for getting the word out. But remember, the media’s agenda is to provide the news, not necessarily to broadcast your key message points. Take advantage of other methods of generating your own content. Your company website, social media and outbound e-marketing are all great tools for getting your story to your audience quickly.
In a climate where M&A activity is on the rise, giving your communications strategy as much emphasis as your transaction strategy will accelerate your success. M&A transactions provide perfect opportunities for telling the story of your company, your core values and your vision for the future. Use them to your best advantage to help your business thrive.