AchieveUnite believes in the power of partnerships. We believe a successful partnership should be greater than the sum of its parts. In the tech industry, it is very common for partnerships to develop to help increase mutual value. However, as we look towards this Valentine’s Day the union we want to focus on is the merger.

Over the years there have been many famous technology mergers and acquisitions – more recently: Adobe and Marketo; Apple and Beats; Salesforce and MuleSoft and Microsoft and Nokia. Each of these mergers seemed like a match made in heaven but some have been more valuable than others. During this blog series, we hope to provide some thoughts and ideas for those who find themselves traversing this complex relationship.

Mergers start at the top. Executives, strategists and analysts may start by exploring the idea of a new vision, then court the possibility of a future with another company and make a proposal to their Executive Board. There are various reasons for merging – perhaps there is obvious synergy – two companies who realize they have complementary strengths and weaknesses and by combining become stronger. Another reason is to eliminate competition. Merging or acquiring a competitor can increase market share – an appealing strategy.

Whatever the reason, as well as potential value there are many pitfalls and rather than creating a strong alliance, a merger can be an expensive mistake. Like most relationships, the success or failure of a merger often comes down to good communication. 70-90% of Mergers and Acquisitions fail according to collated research and a Harvard Business Review report.

Here are some success considerations:

Due Diligence – Initial due diligence prior to a merger will begin to understand the implications from a business perspective. This is normally a highly confidential process but inevitably the ‘news’ will leak. At this stage business stakeholders aren’t always thinking about effective communication and can be caught out. It is important to have a communication strategy that can respond to unplanned enquiries from the media, employees, customers and partners.

The Objectives – The moment a merger is announced it will cause stress and anxiety. Clearly articulating the objectives of this new union and ensuring the messaging is aligned across both companies will help reduce angst and instead create excitement among employees, customers and partners. Doing this right can prevent incalculable negativity developing.

Pre-Planning – This is one of the most important stages of the merger process. During this stage companies should over communicate.  After the announcement and before the union has been finalized there will be a fair amount of time for the ‘rot’ to set in. Competitors will approach customers and talented employees may start interviewing. It is quite common for senior executives to be focused on the merger and forget to manage day to day business.

The communication with customers and partners is an incredibly important part of the future success of the combined companies.

  • It is during this time that a company should communicate regularly and as openly as possible using as many communicating mediums as possible.
  • A transition team will have been set up and should work closely with the communications team to help manage the concerns and expectations within their area of the business.
  • Senior staff and members of the transition team should also ‘listen’ to feedback from employees. This will help identify flight risks and will identify challenges they may not have thought about.

 The New World – Finally the merger will happen. This will affect multiple groups – there will be internal stakeholders i.e. staff and their families and external stakeholders – customers, partners, investors. Each group will require their own information, clarity and guidance. There needs to be a robust communication plan that should include multiple touch points to share the messages and provide information to help minimize the impact on day to day business.

Moving Forward – Depending upon the size of the merger changes can last months, even a few years and have far reaching consequences. Communication remains essential. Large companies are likely to have long standing and complex relationships and processes with their staff and their external ecosystem.

Please join our next article in this series as we discuss the best (and worst) practices of combining companies partner ecosystems. Contact us today to find out more!