Acknowledge the Obvious

Quick Summary: Management needs to address employees as soon as any M/A discussions begin.


At the first hint of an M/A transaction, the rumor mill will begin and increase without bound unless management openly acknowledges the thoughts on employee’s minds.  Even with open dialogue, the rumors will not stop.  However, their impacts can be reduced.  The first step is to quickly acknowledge the fear and uncertainty that everyone will feel. 

As discussed in previous articles in this chapter, even the hint of some type of an M/A transaction will send shockwaves throughout the organization.  The senior management response of “No comment” is devastating to employees.  People will imagine the worst.  Management may feel justified with the notion that “We will tell them when we have definitive answers” or “Upon advice from our legal counsel, we cannot comment” or some similar convenient rationalizations.  None of these responses, although probably accurate, will satisfy anyone and, most likely, do far more long-lasting damage than remaining silent and ignoring any cries for information.  An obviously far better approach is to address the situation head-on with a live or a taped video presentation that can be shared with the entire organization.  As described in the article, 7.3030403, “M/A FAQs for Employees,” a written document given to all employees is an excellent second step to stem the tide of negativity that will surely occur if proactive measures are not taken at the very beginning of the M/A transaction discussions.  Below are several specific points that senior management, preferably the CEO or the Board Chairmen, should cover in a live or video presentation.  The presentation certainly does not have to be of studio quality.  In fact, there is only one fundamental requirement: projected honesty.  The material is easy.  It consists of what employees want to hear.  The subjects that should be covered are included in a short, talking points format for the presenter. They are listed in the order in which they should be covered. 

  • Even though our discussions are very preliminary, and there is a likelihood that no transaction will occur, we understand that these activities will be a major distraction for everyone.
  • We know that you want details, uncertainty is always unsettling, we will provide you with as much relevant information as we can, when we can.
  • We are sure that you understand that the situation is very fluid; decisions and even the overall direction may be changing if an agreement is reached.
  • If some type of transaction does occur, the aftermath will be different for some of you.  It is easy to expect the worst but seldom does the worst ever happen.
  • We understand that no matter we say, the unknown is painful, and you will be an awkward position as others, especially your loved ones, ask questions that you cannot answer; bare with us.
  • We know that you probably think that management knows far more than we are willing to share with you.  That is true, but what we know is that we have not reached any final decisions.  There is no sense in sharing rough, transient information that would probably raise more questions than it would answer.
  • It is to be expected that you will think about your own self-interest before that of the company, your fellow employees, our customers, or our business partners.  This is a natural and logical reaction, but be very careful not to let those feelings impact your job or your interactions with others. 
  • Don’t be surprised if team dynamics and mood changes occur.  We are all humans and will begin to consciously or unconsciously take steps to protect ourselves.  Many people may begin to become risk-averse; afraid to make a mistake.
  • In fact, just the opposite should occur. We should continue with business as usual with each of us doing what we do that has lead to our previous success.  We must all focus on winning instead of being fixated on not losing.
  • We know that rumors will continue to circulate – faster than anyone can keep up with.  Virtually all of them will project “gloom and doom” decisions, changes, or events.  Think about the news in general.  Do you ever hear on TV, “It was a great day in the city today, details at 11.”  The media has a saying, “If it bleeds, it leads.”  Rumors are the same way.  Keep that in mind when you hear the next rumor.
  • All of you are familiar with our Seven Business Principles.  The first three are: Stay in Business, Treat All Individuals with Dignity and Respect, and Provide an Acceptable Return to All of Our Investors.  As a reminder, our employees are the first and most important group of investors.  These three statements are the guiding principles that are first and foremost in our minds as we consider this opportunity.  When you hear the gloom and doom rumors, keep those three principles in mind.
  • We will continue sharing information with you as we can.  Please continue to support us through these activities and think the best, not the worst, and encourage everyone else to do the same.

None of the statements listed above will provide any new information to employees.  What they will do, however, is demonstrate to the employees that management is aware of these issues and the impacts that any discussions will have on employees.  That knowledge will go a long way in reestablishing the trusting relationship that was strained with the first hint of a transaction.

Article Number : 7.030303   

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