My big fat M&A

In the rush to grow revenue and capture market share, government contractors must match their size, capabilities and talent with customer requirements. This often presents the need to buy missing assets or develop them internally.As the consolidation of many contracts into mega-task-order procurements increases, contractors need all the relevant capabilities and talent in-house to win prime contracts.Mergers and acquisitions are increasing in the government marketplace for the same reasons. Companies buy others to gain security-cleared talent, niche skills, technical innovation, access to new government customers and the competitive edge necessary to compete for highly sought-after contracts. Acquisitions can improve market position and allow a company to tap into a larger pool of talent.For the most part, companies buy one another for human assets and contracts so they can better serve customers and build revenue. But acquisitions present significant risk and create chaos and uncertainty for the employees and customers of both companies.One of the most powerful yet often overlooked tools for maximizing the value of a merger is a robust strategic communications program geared toward all stakeholders. From the initial announcement of the pending merger through the closing of the deal, ongoing communication is critical to maintaining loyalty, motivating employees to stay focused on their jobs and promoting positive perceptions of the acquisition among all key audiences. A strong communications plan helps maintain credibility and ensure successful execution of the master integration plan.Time and again, potentially successful mergers fail and the acquiring company ends ups with empty desks, old computers and soon-to-be-ended contracts. Mergers often fail because the companies did not properly communicate the benefits and rationale for them. It is important to brand the merger and communicate what the new brand means to all key audiences.The following are some common communication pitfalls that can have negative consequences for the acquiring company during that critical period. Bill Hoover, president and chief executive officer of American Systems, is highly regarded as a change-management agent. Shortly after taking the helm at American Systems in 2005, he quickly launched an integration strategy for several of the company's previous acquisitions that had been operating with disparate brands and cultures."We realized that we needed to minimize the fear factor associated with these acquisitions," Hoover said. "And what people fear most is the unknown. So we developed a comprehensive communications plan centered on transparency and visibility."As part of the plan, Hoover visited each affected office location to present the company's strategy. He also met one-on-one with local leaders and everyone most affected by the integration."These communications were open and honest," he said. "Both the good and the bad news was communicated personally and directly, and more importantly, each individual who was negatively impacted was treated fairly and consistently."He delivered the message face-to-face and answered questions. Combined with other frequent communications via other media, American Systems kept the information flowing freely and kept its employee-retention rates from slipping.Getting the positive merger story out to all key audiences takes strategy and tactical planning."Many mergers and acquisitions never reach their expected potential because of cultural differences between the business entities coming together," said Ray Bjorklund, senior vice president and chief knowledge officer at market intelligence firm FedSources. "Thoroughly communicating the M&A strategy to each stakeholder is a necessary early step in realizing the merger's expected potential and achieving enhanced competitive advantage."To implement a strong communications program, you must: Although communication is often an afterthought to the legal and financial details of a merger, it can be the linchpin to the merged company's success. Evolving your merger communications strategy before and after closing the deal can alleviate chaos and uncertainty and set the stage for a successful integration.