The Microsoft-Yahoo 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.
Regardless of 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.
I have 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 companies.
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.