Managing expectations

We all know exactly what to expect from an acquisition, or do we? Actually, we will probably have as many views as to the impact of a new acquisition on our business as we have employees. Some will be optimistic, some pessimistic and others simply focused on what is likely to happen to themselves. You can be certain that, without extensive communication, most will have the wrong end of the stick and the outcome will be different from what they expected.

Inside the acquirer, this is going to create problems. Some will be disappointed, others will be dismayed, some will leave due to uncertainties and a few will be really pleased with the result. In the middle of all this, work will be disrupted, some will be stressed out and others will be maneuvering to take advantage of the changes.

Only with comprehensive briefings, updates and some personnel counseling will the acquirer get through this period without some loss of staff and disruption to ordinary business.

Now let us turn out attention to the vendor firm. If you think you have problems in the acquirer, it will be nothing like the level of stress and disruption in the vendor. They have an uncertain future. Some will lose their jobs, responsibilities and reporting lines are likely to change, remuneration packages and health benefits and vacation benefits may be up for review.

Some people will leave due to the level of uncertainty around their future. Current business levels will suffer as people focus on their own problems, take on the additional work of the due diligence process and spend time in discussions with their co-workers.

What we have is basically an expectation problem. Wherever there is an information gap, rumors and gossip will fill in the blanks, usually with inaccurate or highly biased information. The result will fuel the fire of uncertainties and create even greater levels of stress and disruption.

Smart acquirers and smart vendors know this is going to happen and work to put out the fires before they gain traction. It all comes down to communication and process. Staff in both companies, acquirer and vendor, will be concerned about their jobs and their futures and only by putting the time and effort into satisfying questions will the acquisition process be able to deal with this issue.

Perhaps the single biggest contribution to this problem is to set out very comprehensively the reasons why the acquisition is being undertaken and the manner in which the acquisition objectives will be achieved.

The next step is to show the impact on each organisation and the manner in which the post-acquisition business will be conducted. Since few acquisitions actually are fully merged into the buyer, many of the fears of loss of jobs or changes in responsibilities will go away.

Management needs to ensure that all impacted staff are briefed and have the opportunity to voice their concerns and have their questions answered, promptly. Lastly, there needs to be frequent communications about progress. The biggest danger will come from doing too little too late.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.