Is the firm opening a Los Angeles office, one young copywriter wonders aloud. “I’d love to move to LA. Get myself a convertible.” No one knows for sure what is happening to their New York advertising agency, Sterling Cooper. But something surely is afoot as the partners remain huddled in the executive conference room.
It turns out the firm is being acquired by a larger London ad agency, and all bets are off. “There’s definitely going to be some redundancies,” says a secretary. Everyone is panicked. Is their job “redundant?”
An account manager lowers his voice conspiratorially: “Regime change is always tricky. You want to stay neutral. Loyalists are always hung and you don’t want to get caught in the fall-out.”
Another adds, “They don’t care about us. We’re just a bunch of salaries on a ledger. They’ll draw a line and get rid of everything below it.”
The traffic manager whines, “I like this company the way it is.”
Sound familiar? Is it real life? No, but it may as well be. It’s a scene from the final episode of the second season of “Mad Men,” an original dramatic series on cable TV, from AMC. Placed in the early 1960s, it no doubt accurately reflects the fear that is felt among employees in an acquired firm.
For dramatic effect, while the news of the merger is sifting through the Sterling Cooper organization, there is a very real fear overhanging the world due to the October 1962 Cuban missile crisis, which mirrors and exacerbates the angst of those in the firm and their uncertainties of the coming merger.
This isn’t 1962 and times do change, but not in the realm of mergers and acquisitions and their effect on the people at ground level – the ones who aren’t reaping the profits that owners and partners do.
Mergers and acquisitions foment uncertainty, dislocation, fear – and worse. Much of that - the natural human reaction to radical change - cannot be avoided. Changes that such events bring also spawn questions that cannot be answered right away. And when questions can’t be answered promptly, the rumor mill takes over.
What can be managed, on the other hand, are people’s expectations, and insights into how decisions affecting their lives will be made, and when, as well as communicating why some questions will remain open for a time.
In today’s business world, much of the value of an acquired firm resides in its people. The acquiring company buys brand names, patents, manufacturing facilities, equipment and the like, to be sure. But without the people, it is an empty shell. So it is incumbent on the senior managers to do all within their power to reassure the people and reinforce the company's core values so that the talent won’t make a beeline for the door the day the sale closes.
At base, effective, relevant and timely communications will go far in achieving the core business purpose of the merger, which is to preserve and enhance the value of the acquired company by building trust and credibility among the new employees.
Often, the danger lies in the early days before much is known and few of the big questions can be answered. The acquiring firm will often communicate reassuring words that “nothing (or little) will change” and that people should just keep doing what they’ve always done.
But as the deal shakes out and the questions begin to find answers, the early general communications may be inadvertently contradicted. It can’t be helped. Much is discovered in the early “honeymoon” phase that hadn’t been anticipated, necessitating unplanned changes in plans.
Change is like that. The key is to approach the employees and managers of the acquired firm with honesty and reassurance.
The key messages stay simple, direct and honest:
It turns out the firm is being acquired by a larger London ad agency, and all bets are off. “There’s definitely going to be some redundancies,” says a secretary. Everyone is panicked. Is their job “redundant?”
An account manager lowers his voice conspiratorially: “Regime change is always tricky. You want to stay neutral. Loyalists are always hung and you don’t want to get caught in the fall-out.”
Another adds, “They don’t care about us. We’re just a bunch of salaries on a ledger. They’ll draw a line and get rid of everything below it.”
The traffic manager whines, “I like this company the way it is.”
Sound familiar? Is it real life? No, but it may as well be. It’s a scene from the final episode of the second season of “Mad Men,” an original dramatic series on cable TV, from AMC. Placed in the early 1960s, it no doubt accurately reflects the fear that is felt among employees in an acquired firm.
For dramatic effect, while the news of the merger is sifting through the Sterling Cooper organization, there is a very real fear overhanging the world due to the October 1962 Cuban missile crisis, which mirrors and exacerbates the angst of those in the firm and their uncertainties of the coming merger.
This isn’t 1962 and times do change, but not in the realm of mergers and acquisitions and their effect on the people at ground level – the ones who aren’t reaping the profits that owners and partners do.
Mergers and acquisitions foment uncertainty, dislocation, fear – and worse. Much of that - the natural human reaction to radical change - cannot be avoided. Changes that such events bring also spawn questions that cannot be answered right away. And when questions can’t be answered promptly, the rumor mill takes over.
What can be managed, on the other hand, are people’s expectations, and insights into how decisions affecting their lives will be made, and when, as well as communicating why some questions will remain open for a time.
In today’s business world, much of the value of an acquired firm resides in its people. The acquiring company buys brand names, patents, manufacturing facilities, equipment and the like, to be sure. But without the people, it is an empty shell. So it is incumbent on the senior managers to do all within their power to reassure the people and reinforce the company's core values so that the talent won’t make a beeline for the door the day the sale closes.
At base, effective, relevant and timely communications will go far in achieving the core business purpose of the merger, which is to preserve and enhance the value of the acquired company by building trust and credibility among the new employees.
Often, the danger lies in the early days before much is known and few of the big questions can be answered. The acquiring firm will often communicate reassuring words that “nothing (or little) will change” and that people should just keep doing what they’ve always done.
But as the deal shakes out and the questions begin to find answers, the early general communications may be inadvertently contradicted. It can’t be helped. Much is discovered in the early “honeymoon” phase that hadn’t been anticipated, necessitating unplanned changes in plans.
Change is like that. The key is to approach the employees and managers of the acquired firm with honesty and reassurance.
The key messages stay simple, direct and honest:
- We acquired your company because of the excellence it adds to ours. It would be unwise for us to do anything that diminishes or destroys that excellence.
- Please work with us as we get to know one another better, as we learn how we will operate together going forward.
- Help us discover your best practices and show us how they might benefit the new larger company.
- Please understand that there will be stumbles along the way. We will always try to minimize the mistakes and hope that you will be stick with us through the rough patches.
- By working together, by striving to achieve the best for our customers, our employees and our stockholders, we will all succeed together and the final product will be more than the sum of the two components.
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