Mergers and corporate marriages are booming as the credit crunch bites. But don’t get so distracted with soothing company unions that you neglect the staff, whose confidence and sense of involvement in the move are vital:

Never before have so many organisations merged so quickly. There’s The Royal Bank of Scotland with ABNAmro (before they were unceremoniously majority acquired by the British government), Lloyds TSB with HBOS and JP Morgan with Bear Sterns, just to name a few.

Desperate times call for desperate measures, but for the thousands of staff caught up in the changes of ownership, the story goes much deeper than the headlines on the financial pages. Uncertainty, rumour and fear of change – and potential job losses of course – are disruptive and can quickly damage morale. Disaffection can spread with alarming speed if people feel neglected or disregarded by busy bosses, who can be under huge pressure from the demands of mergers and takeovers. At times like these, it can be impossible for managers to communicate and consult properly with all the different audiences. But once the deal is done the big test arises, because organisations that don’t get their communication right after the merger will find their marriages have little hope.

Lisa Bondesio, director of strategic communication consultancy Greentarget, says “communication people have to be at the table right from the beginning” when it comes to mergers. Putting out the right message well is key – within the business as much as externally.

“Right now markets are volatile and there’s uncertainty. You don’t want people panicking because they are misinformed, as this can obviously have a very real impact on the business,” she says.

In all these deals, says Bondesio, “you need the strategic skill and ability to create social capital, and create meaning both internally and externally. Corporate communication people must stay calm and move rapidly to identify priorities for action and make sure messaging is clear.”
Organisations are complex structures – even more when they unite. This means a simple, one-size-fits­all message is unlikely to get across to all stakeholders.

“If two large companies come together, it’s likely there will be four generations in the workforce. And communications that work for twentysomethings may not work for 40-year-olds. It’s about segmenting and making sure one message doesn’t try to be all things to all people. Cultural mapping, and identifying behaviours in the organisation, has to be a key component of an integrated merger communication plan,” Bondesio says.

Cutting edge

While snap mergers between the world’s top financial institutions fill the news pages, other companies are still merging the traditional, more considered way, and are using some neat corporate communication tools to combine the cultures and brands of two distinct entities.

One business leading the way is the world’s largest steel company, ArcelorMittal. The firm was created in 2006 when the conservative European Arcelor merged with India’s aggressive Mittal Steel Company.

Straight after the merger, ArcelorMittall brought in communication consultancy Vanksen to help its campaign. The firm is at the cutting edge of electronic communication trends, and harnesses TV, radio and viral marketing to deliver its messages.

Vanksen suggested the company use web TV as a key communication channel with all stakeholders during the merger. “We came up with the idea of using web TV – internet video – because it allows you to reach far at very little cost,” says Troy Bankhead, Vanksen’s former head of marketing.

ArcelorMittal is a global business and language differences could have been a problem. To ensure messages were received as widely as possible, Vanksen also used a new technology called dotSUB, a “wiki” type browser-based tool which allows affordable subtitling into and from any language on video content streamed through the web.

The most exciting aspect of the programme, says Bankhead, “was turning the corporate communication paradigm on its head. We wanted to base each episode on the hottest topics on everyone’s mind.”

The first focused on addressing employee fears about job losses, something that’s not often addressed so honestly and openly at a corporation undergoing a merger. “We had people on the show saying they were afraid for their jobs, which was a strong message. We put all the water cooler conversations out in the open; we never tried to gloss over the concerns of staff, in any medium,” Bankhead says.

This included an open letter from Lakshmi Mittal, the founder of Mittal Steel, acknowledging that mistakes would be made in the merger and explaining that management was trying its best to assuage staff concerns. “It was a new way of communicating,” says Bankhead. “Companies are used to acting as though they have everything under control, but people just don’t buy that anymore, which is why this campaign was so successful.” 

A lot of interactivity between staff, management and the communication team was also encouraged. “We allowed people to rate each episode and encouraged a lot of non-moderated content on the company website about employee concerns, to the point where Lakshmi Mittal responded personally, for example, to a query from an employee in one of the Canadian offices. It really was a revolutionary way to handle a delicate time,” Bankhead says.

Amazing impact

Executive vice president of communication at ArcelorMittal, Stefan Schwarz, agrees the web TV project was a success. “With more than 1.5 million unique visitors over the course of the first season, we were absolutely amazed by its impact. Of course, our primary focus has been the internal audience, and from this point of view, the results have been outstanding.”

“But it’s more than the number of visitors to the site. As a corporate communicator, it’s very rare to receive emails from IT analysts in Brazil asking for more information, or a Polish worker connecting from home because he heard of it from his manager.”

The web TV campaign was so successful that it was even mentioned in an analyst’s report as one of the positive reasons for the success of the merger. “This was of course very flattering,” says Schwarz, but “what made me proudest was the fact that we were allowed to do this. If you look at the tone of the first season, the openness and directness of the web TV, it was a very bold move. Showing employees stating their fears and anxieties, having our cameras in the highest level meetings, the availability of our group management board – and all this in the context of a very tough merger environment – all these factors led to the success of the show. But it also meant season two had to live up to the first series, which put a lot of pressure on us.”

Schwarz says the most challenging aspect of the program was logistics. “We would issue a new episode every two weeks, with a trailer four days before each episode. ArcelorMittal spans the globe, with more then 320,000 employees in 60 countries, and our aim was to show this diversity. It meant a lot of traveling, preparing and researching. But we wanted to keep a genuine, honest tone, so we tried to go with the flow.”

“Sometimes we’d go into a place with an idea for an episode and come back with a totally different topic, which meant adapting and editing. It was important to keep the pace and I’m happy to say we always stuck to our deadlines. What was interesting was how much we, as a communication team, benefited from it. Our internal communications team was learning so much that we were able to feed external comms with a lot of ideas.”

“Effectively, it became an internal and external communication tool, in some ways redefining the traditional limits of internal and external communication,” Schwarz says. Now ArcelorMittal is developing the third series of the show.

Ultimately, good merger communication is about being as honest as possible, communicating facts as soon as you can and consulting important stakeholders. This doesn’t change – no matter whether a merger happens suddenly or is long in the planning. Organisations at the centre of the financial crisis must remember this, or they will suffer more pain than they need to hoiking themselves back on their feet. Communicate or perish, that’s the message.