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Employee-centric communication: 3 strategies for articulating startup M&A benefits to staff

by | Jan 8, 2024 | Public Relations

As the global recognition of AI continues to soar, shedding its earlier perceptions as a mere “bubble” or passing trend, the considerable value of AI-driven startups becomes increasingly apparent. These startups are now at the forefront of technological advancements, showcasing remarkable capabilities to enhance efficiency, productivity, and profitability. In this landscape, AI-driven companies are not just thriving; they are becoming sought-after assets in the realm of mergers and acquisitions (M&A) across diverse industries.

This increasing value sets the stage for a dynamic era of mergers and acquisitions, during which the profound impact of AI could be a driving force. However, while the leadership of these startups may be intrigued by the prospect of M&A, the rest of their teams might have some reservations. 

Traditionally, M&As have been associated with smaller companies losing their identity and influence in major strategic decisions. What’s more, employees might assume that a merger means that the company couldn’t have been successful on its own. They also may have concerns about whether redundancy will mean that they will lose their jobs. Assuaging any concerns that employees might have requires effective communication strategies to transform team skepticism into optimism.

In light of this, here’s a guide for entrepreneurs in communicating upcoming or potential M&As to their teams effectively. By understanding the nuances of messaging, organizations can not only celebrate their achievements but also pave the way for a harmonious transition in the dynamic landscape of AI-driven startup M&A.

Make your team feel valued

When a large public company expresses interest in acquiring a startup, it’s a clear indicator that the startup and its dedicated team have excelled, a significant acknowledgment of the team’s hard work and contributions. To effectively convey this, your M&A messaging should emphasize the team’s achievements that attracted the acquiring company’s attention—whether it’s a groundbreaking product, reaching impressive sales milestones, or achieving remarkable results with a notably small team.

Focusing on the team’s accomplishments not only recognizes their efforts but also sets a positive tone for the entire messaging. This positivity is crucial in helping your team associate the M&A with their own success. By showcasing their valuable contributions, the messaging aims to dispel concerns and fears about the uncertainties often linked with M&A activities.

In today’s competitive landscape, concerns about job security are natural when M&A discussions arise. Address these concerns by clearly communicating that the acquiring company’s interest stems from recognizing the team’s proficiency. Emphasize that the acquiring company values the specific skills and hard work of the team, making it likely that their jobs are secure post-acquisition.

Encourage your team to view the acquiring company’s interest as not just a validation but also a precursor to additional rewards. By maintaining momentum and continuing to achieve objectives, employees position themselves for further growth and success within the new organizational structure. This forward-looking perspective can motivate the team and highlight the potential for continued success in the evolving landscape.

Stress how the acquiring company will add value

Now your team knows how they can help the acquiring company. But how can the acquiring company help your team? One key aspect of your messaging should be explaining how this particular acquiring company can increase your company’s value. 

For instance, does the acquiring company believe it can add more value to your primary product or service? Does the acquiring company have a plan for increasing your customer base or helping you appeal to an entirely new audience? Does the company provide additional resources? Is there a particular synergy between what the acquiring company provides and what your company brings to the table? 

This information will bolster support for your initial point about the acquiring company’s deep familiarity with and appreciation for your company’s work. You wouldn’t want your team to suspect that the acquiring company is out of touch with your industry or that the acquiring company merely intends to piggy-back off your company’s success.

This can also be your opportunity to reveal how the acquiring company intends to eliminate an ongoing obstacle (or two) to your success. Maybe there’s an aspect of your primary product or service that frequently warrants complaints from customers. Maybe you don’t have the money to hire the number of people your company needs to realize its full potential. Either way, your team must understand that the acquiring company has identified a specific area of your business where it can add more value and ultimately increase the rewards of your team’s hard work.

Highlight mutual values and goals

To further alleviate your team’s concerns about the acquiring company, concentrate on emphasizing shared values and goals. A strong alignment in these areas increases the likelihood of a smooth and mutually beneficial M&A. M&As are built on the foundation of finding common ground between two companies. In your messaging, clarify that beyond the acquiring company’s interest in capturing your company’s initial success, it’s the shared values and goals that propel the pursuit of an M&A.

Delve into why your company is comfortable with the prospect of being acquired by this specific entity. Consider the rapport between your leadership team and theirs, shared perspectives on the future of your industry, and alignment on core values since the inception of both companies. For instance, do the companies share an interest in environmental stewardship? Are both companies committed to giving back to their communities? Does each company donate a certain percentage of its profits to worthy causes? 

By highlighting these commonalities, you not only address concerns about potential loss of brand identity but also reinforce that the acquiring company values your work. Pursuing an M&A with your company wouldn’t align if there were issues with your brand identity. The acquiring company’s evident appreciation for your work and adherence to your brand identity likely played a pivotal role in your team’s journey thus far.

Final thoughts

The overarching theme of your M&A messaging to employees is turning the acquiring company from a faceless threat into a group of real people who are a lot like your team. You’re not welcoming in a bully to push your team around for their own benefit. You’re joining forces with an ally that sincerely believes both companies can amplify each other’s success. When your team is positioned to greet the acquiring company with open arms, you’re setting the stage for a long-lasting partnership that’s founded on respect, optimism, and understanding.

Paula Phelan
Paula Phelan, COO at Intelligent Relations, is an accomplished entrepreneur and visionary leader in the technology and public relations industries. With over three decades of experience, Paula has been at the forefront of introducing disruptive technologies and assisting numerous companies to successful exits.

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