December 25, 2017 Views

Change is in the Air – Communicating Through Change

Communicating during uncertainty or structural realignment requires a close and experienced eye from professionals well used to periods of change, says Richard Barton

Investment banks are often seen as corporate trailblazers but in today’s markets they are having a tough time and taking the knife to costs, the effect of which in Asia is creating a surge of bankers and asset managers back on the street, literally.

Headline-grabbing redundancy news from bulge bracket i-banks in recent weeks highlights this stark reality. So with scores of talent now looking for their next ‘big opportunity’, hopefully at least the Fintech start-ups stand to gain, at least until the banking sector improves.

Of course it’s not new that companies need to get through tough times and re-engineer existing organizational structures. But how does an organization prepare to communicate with its stakeholders and how do they manage to protect their brand while doing so? After all, livelihoods, high-flying careers and keeping a happy investor base are at stake.

Having helped implement many change programmes with companies across APAC, ranging from global MNCs to SMEs in need of advice around pre and post-merger situations, recessionary cycles and financial crises, we know that experience is critical when it comes to communicating through change. In fact, having senior communications advisors in place at the earliest stage can make the difference between a smooth transition or an ugly outcome that could do irreparable damage to a company’s stock price.

While some financial institutions have it sewn up when it comes keeping their ex-employees “in-line” with financial “loyalty rewards” that extend far beyond the employment contract and pink slip, corporate change can create more serious short-term challenges. Recognising that every situation is different, overcoming these challenges always comes back to the basic principles of clear, concise and consistent communications – whatever and wherever the channel of delivery.

Additionally, many firms – and especially the smaller ones – may not have a permanent team of communications experts to help them manage through the issue, be it business unit closures and divestments, employee cutbacks and job outsourcing, or widescale corporate reorganisation exercises, to name a few.

But as long as there is business to be done, there will always be change, so these basics might, at the very least, be helpful to consider in this choppy and unpredictable market environment:

– Get your communications experts involved early on in the process.
– If there is a management consultancy involved in the ‘right-sizing’ process, they should include a strong
communications element in the plan and ensure it includes a media component.
– Ensure the messages are clear – relevant managers should be able to walk around the office with a one pager
(not a booklet!) of simple messages that tell the story
– Decide on the “go live” date even if the process needs to be staged across multiple stakeholder groups with
different messages and meeting times. Internal announcements should always be considered public.
– Put your best external spokesperson forward – ensure that person is media trained and ready to get the
message across in a way that is, most importantly, human.
– Line managers are the best internal deliverers of bad news – anyone else would not be sincere.
– Align all communications tools and publicly accessible information to reflect the changes.
– Think about how the story will fit into the bigger picture for the business going forward.

Naturally, the process of change can trigger external interest and you need to know what and what not to say when media, investors and other stakeholders call. Amongst our own client base, Newgate reinforces the importance of the communications function being part of the change process at the strategic level so it can be integrated from the start and throughout the business plan.

That said, we still see last minute, panicked calls and kneejerk reactions from ill-prepared management and spokespeople when something goes wrong. To support a pressured stock price or assuage investor unease in times of trouble, management have no option but to appear totally in control of the situation – and at the very least to have a clear plan of how to get to a position of control.

Newgate Communications is a full service agency specialising in corporate and financial communications, often helping companies manage their communications through difficult and contentious situations.

Richard Barton

Managing Partner, Greater China

(852) 3758 2680

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Change is in the Air – Communicating Through Change

June 17, 2016 Views

Unlocking M&A Success

Effective Communications is a critical component in ensuring post-merger integration is a success!

After the global financial crisis many in the West were writing with anticipation about the expected wave of investment from companies across Asia. The argument quite rightly went that these companies were ideally placed to take advantage of weak western markets to grow and diversify their asset and investment base, in the face of stagnant domestic markets and the need to acquire skills and technology that would otherwise take years to emulate.

At that time though, many Asian corporations complained that they were not understood by Western stakeholders, who in turn complained that Asian companies did not take the time to understand how it works “over there”.

The reality was that while the markets favoured and sometimes craved investment from overseas companies, other issues, including transparency and perception, posed significant challenges to their success. Recent history shows that these communication issues were as influential on the outcome of deals in the past few years as any of the legal or financial aspects.

Although Asian corporations have now successfully completed a multitude of major overseas deals, and have learned a lot about managing their reputations, reports show that the issue has not fully gone away. Many situations have revealed a second and potentially more damaging communications-related weakness, namely the difficulties experienced in successfully implementing post-merger integration strategies. And this is precisely where the true value of an acquisition should be generated.

Like the deal itself, post merger integration has its hard and soft issues. New sales strategies, production synergies, channel development and the reduction of duplicate costs are all fine on paper, but mastery of the communications, cultural and social issues that impact the efficacy of these exercises is critical. Misalignment doesn’t just prevent the benefits from being unlocked; it will negatively impact the entire business.

Employees want certainty, especially in their prospects, reporting lines, roles, salaries and benefits. To unlock fully the potential benefits of an acquisition companies need to retain and attract proven management. But in the absence of a well thought out and coordinated approach, talent will remain skeptical.

Engage employees always

Real employee engagement is a vital component to achieving success. Companies should use research as a tool to find out what employees really think. Only then can they effectively promote the objectives of the new company, explain the responsibilities and roles of those who have to deliver the merger benefits, and demonstrate why supporting the deal is in everyone’s interest.

The need for this level of awareness of the issues is as critical with external stakeholders as it is internally. Wherever the deal, foreign investment attracts scrutiny. Whether engaging with management, unions, politicians, media or regulators, acquirers should be prepared to argue the soft as well as the hard values of their deal. Acquirers will be judged not only on their products or services, but also as corporate citizens and employers. Poor preparation risks failure.

Timing is not always on the side of an acquirer, but ideally a positioning campaign with stakeholders would take place prior to any investment. Here companies should research how they are perceived and identify stakeholder concerns.

Having understood the issues, they should agree the positioning messages required to close the gaps between current external perceptions and the desired positioning. As the process unfolds the company will benefit from further research to measure the success of its campaign, enabling changes to be made as necessary.

Prior to a deal, senior spokespeople should be trained, in order to effectively sell the financial, management, strategic and growth aspects of the deal, as well as how value is to be created and shared.

With ever-increasing regulatory approvals required around the world, investments can often take several months to complete. Any communications campaign must therefore be well paced if it is not to run out of steam and news flow that reinforces the desired outcome must be carefully managed.

Companies must also accept that media styles and practices are not consistent globally. The media team should comprise internal staff who fully understand their business, alongside external advisors who fully understand the rules and nuanced customs in their local market, as well as the media and other stakeholders with whom they will engage.

Doubt or ignorance about an acquirer often leads by default to negative perceptions. Engaging stakeholders with a structured programme removes the inevitable question marks and helps foreign buyers build a much stronger base on which to build a positive reputation locally and globally. After all, they may well want to do further deals.

Richard Barton

Managing Partner, Greater China

(852) 3758 2680

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Unlocking M&A Success