merger headlines recently have all focused on Yahoo’s share value, the
impact on M&A in Silicon Valley and whether anyone can ever beat Google.
One aspect of mergers routinely gets overlooked in these articles:
The importance of marketing to the employees of each firm.
the strategic fit of the companies being merged or the technical
talents of the employees, mergers create a potentially fatal mash-up of
corporate cultures. It’s critical that merging companies prepare
their employees for the transition. Well-planned internal
communications and “marketing” of the merger’s benefits and
opportunities can make the transition easier and more productive. A
good internal marketing campaign can create a slingshot effect –
motivating employees and fostering collaboration with their new
colleagues. Poor communication leads to distrust, misplaced feelings
of superiority/inferiority and slow and ineffective integration.
experienced several mergers (from both sides) during my career. From a
portfolio perspective, these mergers have all been very sound. As is
often the case, the benefits were less than expected. The challenges
in each merger resulted from the interactions among the employees of
the merged firms. Merging organizations often fail to clearly
communicate the benefits, vision and new business structures and
processes. Few efforts are made to integrate the business teams and
corporate cultures. The resulting information gap leads to confusion
about hierarchy, responsibility and rules of engagement.From a
marketer’s perspective, a few simple communication strategies can
enhance the merger process and improve the results of the merged
These may seem like HR activities, but the marketing organization
has a vital role to play in positioning the merger to employees,
developing collateral materials and events, and establishing brand
rules. Without clear internal communication and “marketing” the merger
to employees, firms risk higher costs, lower revenue and employee
dissatisfaction or defection.
Much will be made about the financial and
market challenges for Microsoft and Yahoo as they ponder the viability
of a life together. The nuts and bolts of making the merger work are
likely to be ignored by the press, though. It will be critical for the
two companies to manage the internal “marketing” of the merger to their
employees. Only with enthusiastic, motivated workers will the merged
company maximize the potential of the new enterprise.