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All together now: why employee engagement is critical throughout the change process.

The revolutionary shift in communications technology over the past two decades--as well as the democratization of who controls it--contains critical lessons for companies whose leaders have yet to recognize and embrace the new realities of social media. Social media have upended the traditional balance of power in shaping public perception, not just about public, political events, but also about companies both public and private that have long hidden behind press releases and spokespeople. Now, employees have the power to control the flow of critical information--making engaged, loyal and discreet employees all the more important, especially in times of transition.

The success of any merger--and statistics indicate that most fail to fulfill their promise--depends, in large part, on employee engagement, because employees are the ones who ultimately translate theory into really. As such, an authentic spirit of engagement must be integral to a company's culture before an M&A transaction.

Imagine how quickly sensitive M&A-related information might travel if propagated via social media by a single nervous, careless or disgruntled employee. For those without golden parachutes (which usually includes more than 99 percent of a company's workforce), a lot of questions arise about their future: Am I going to lose my job? If not, who's going to be my new boss? Is my organization getting split up, and when? How are my responsibilities changing? Is our company culture going to be damaged or even disappear? Experience has shown us time and again that mistrust and misinformation (usually due to a lack of regular, open and honest exchange of information between management and employees) is exponentially more likely in periods of dramatic change.

The birth of the naked company

Consider the following recent examples, which clearly illustrate the perils of disengaged employees in today's social media environment.

In March, a disillusioned Goldman Sachs banker named Greg Smith resigned from the company and published a scathing op-ed piece in The New York Times that decried the changes in culture he'd witnessed in his 12 years with the company. "I can honestly say that the environment is as toxic and destructive as I have ever seen it," he wrote, exposing from the inside what he described as a culture of greed at the company. He went on to write that this culture was established at the very top level of the company, and that Goldman bankers often derogatorily referred to clients as "muppets" and often put the bank's own profits ahead of client interests. Within hours, the scathing article went viral, and Goldman struggled to contain the damage. Analysts estimate that, all told, Smith's 1,271-word essay ended up costing Goldman Sachs more than US$2 billion in lost stock value.

[ILLUSTRATION OMITTED]

The firestorm Smith ignited came only a day after a former senior Google engineer named James Whittaker blogged that the company had abandoned its democratic spirit of innovation in a vain, top-down pursuit of its competitor, Facebook. "The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus," he wrote. An article in The New York Times referred to Whittaker's post (which appeared on a Microsoft blog) as part of a larger set of criticisms about Google's privacy policies.

Examples like these show how a few disengaged employees can have a corporation spending millions to polish its public image. In this new world, what we're witnessing is nothing less than the birth of what I call the "naked company"--enterprises that no longer have the power to hide their dirty laundry, but must instead listen to and engage employees or else watch that laundry hung out for public review and backlash.

How leaders can build engagement

Company leaders need to ask themselves: How do we engage, inform and motivate more effectively? What tone do we set? How well do we listen to employees? And how well do we translate employee concerns or ideas into action? If survey data are any indication, asking such questions is far easier than coming up with the answers. In fact, according to one study, 75 percent of leaders have no engagement plan or strategy, even though 90 percent of them say engagement has an impact on business success.

So how can companies increase engagement? How can they harness the power of all their people instead of doing damage control after the horse of information is already out of the digital barn?

The most effective corporate leaders today welcome the contributions of all employees, no matter what their tide--not just occasionally, but regularly. They recognize the humanity and individuality of their employees, knowing that acknowledging and celebrating people in all their dimensions builds trust and engagement. In practical terms, this means:

* Demonstrating consistent humility. Consider the example of Sir Richard Branson, who has even appeared naked in his commercials. If a billionaire knight has nothing to hide, can't we all become a little more comfortable with the risk of humility?

* Being more transparent about company processes and performance. Consider taking a look at the insights of successful entrepreneur Ari Weinzweig in Zingerman's Guide to Great Leading, Part 1: A Lapsed Anarchist's Approach to Building a Great Business. Weinzweig credits what he calls open book management--involving employees in the company's profit and loss reports and in weekly cost, revenue and training goals--with growing his delicatessen from a two-person shop in 1982 to nine businesses employing 575 people and generating US$40 million in annual revenue. And his team members agree. One line cook says that not knowing the score is like being on a sports team but not having access to the playbook.

* Letting go of control, with a new emphasis on setting clear, realistic goals without micromanaging how people achieve them. Consider the Southwest Airlines flight attendant David Holmes, who turned the mandatory preflight safety announcement into a rap, earning plaudits from his passengers and fame on YouTube.

The past decade has been one of unprecedented M&A activity, yet the results have been less than impressive. Now that employees have the world at their fingertips, what might change? Transparency may increase and, over time, will make companies stronger, empower all stakeholders with more information, and produce flatter, more energized, more effective organizations.

It's a brave new world out there, and for those leaders and companies that engage employees as true and full partners in the enterprise ahead, the old barricades to success are falling fast.

top 5 communication mistakes made during m&a's

1. Being too busy to have a plan. It's easy to resort to firefighting mode when things get crazy, as they do in a merger or acquisition. However, failing to have a solid, strategic approach to keeping leaders and employees connected can be fatal.

2. Trying to go it alone. Many communicators try to manage the additional workload of an M&A themselves, on top of their day job. They fail to pull in the specialized skills needed to seamlessly manage the unique intricacies of this massive change. Many also forget that they--just like other employees--are going through personal change too. This can result in skewed thinking, biased decisions and fatigue. Bringing in fresh, outside perspectives and objective, experienced partners is key.

3. Going off the air. In times of uncertainty, it's easy to hold off on communicating until all the facts are known. But going silent with employees is one of the worst things to do. In the absence of information, employees fill in the gaps with speculation and rumors while productivity takes a nosedive.

4. Ignoring the manager. During times of change, employees look to their managers for cues. If managers are not engaged or prepared to lead employees through the integration, productivity and engagement plummet.

5. Not playing well with others. During stressful times, fighting can break out between communication, HR and other functions. There is often little dialogue between these groups in the acquiring and target companies. Communication grows unaligned, and as a result, employees become confused and misguided.

--B.F.S.

by Barbara Fagan-Smith, ABC

Barbara Fagan-Smith, ABC, is CEO of ROI Communication. She's based in San Francisco.
COPYRIGHT 2012 International Association of Business Communicators
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Title Annotation:COMMUNICATING THROUGH M&A
Author:Fagan-Smith, Barbara
Publication:Communication World
Geographic Code:1USA
Date:Jul 1, 2012
Words:1359
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