Geoff and Maggie Got It Right

Today, Geoff Livingston and Maggie Fox called off the acquisition of Livingston Communications by the Social Media Group. From what they said, they did the right thing and they got it right.

In the corporate world, I was involved in two mergers, in both instances serving as a support member on the executive transition teams. Besides the numbers, the primary concerns of any merger or acquisition are 1) communications leading up to the merger and then for a year or more following the merger, and 2) ensuring that a fit is possible between the companies cultures and its executives. If that fit cannot be accomplished through change management, the mergers will fail miserably.

Here are the issues that must be faced, responded to and carried out for a successful merger:

Communications

• Before the media announces a merger, the CEO's of both companies must present the story and the facts to their employees. This is best done by sending the CEO's on the road to personally address the issues, immediately following an employee announcement via all channels.
• The communications must be open and honest. First and foremost, they must address what this means to employees of both companies (i.e., layoffs, separation packages, changes in benefits, and changes in leadership).
• Every week and always before news breaks in the media, all employees must be updated.
• Monthly face-to-face management meetings must be held by department executives, immediately followed by manager meetings with their staffs.
• All questions must be answered as honestly as allowed by SEC regulations, if companies are public, and as known by the executives. Caveats must always be expressed, because what we say today may be changed tomorrow.
• Mergers can take a few months or a year or more. Merger communications must be regular not only leading up to the merger approval but for at least a year following the merger. This is in addition to the normal communications processes.
• Employees should never learn anything about the company from the media first, including Social Media outlets. Employees must hear everything first from leadership.

Culture

• A carefully constructed, launched and managed Change Management plan and process must be developed and ready to go on day one of the merger.
• Both cultures must be analyzed for fit. This analysis should include teams of employees in both companies meeting together to discuss their differences, their similarities and their challenges regarding working together as teams.
• The Change Management plan should include steps to address the analysis.
• Both Human Resources departments should work closely to ensure their criteria for layoffs, separation packages and new pay packages are in sync.
• Change Management should be supported by executives but run by change management teams, represented by employees and management at all levels working together. These teams should report directly to the CEO.

Finally, if during due diligence, it becomes apparent that either the numbers or the cultural fit won't work, it is time to bale. Many if not most of us who run a business, no matter the size, should have a goal and/or an exit strategy that includes an acquisition or a merger. We all can learn from Maggie and Geoff. If it's wrong, it likely cannot be fixed.