Change is a constant, and COVID-19 has radically changed our way of life and the way we do business. The last few months have dynamically portrayed the most basic principles of business management in a living, breathing representation of Darwin’s survival of the fittest.
Some companies have pivoted into new business models; e-commerce, virtual engagement, delivery service or subscription boxes to name a few. Others have, sadly, gone under as the pressure of maintaining overheads has combined with a nosedive in consumer confidence and spending.
There are some business owners who have managed to leverage the value of their businesses into an acquisition or buyout of the company they built, in some cases from the ground up.
Even in a global pandemic, figuring out how to sell your company can act as a golden ticket out.
But what about your employees? What about workers who have driven the business forward and whose fates have now been put into the hands of new management?
In ethical terms, what does that business owner owe their employees in terms of that transition ahead of the change in company ownership?
What should they tell them and when? Every sale is unique, with its own advantages, obstacles, pros and cons, so how does a company prepare their team for a change in company ownership?
Communication Is Key
In any office or workplace, the rumor mill works all day, every day and never takes a break.
Regardless of how quiet it’s kept, a pending business sale is never a secret.
The longer leadership goes without addressing the elephant in the room, the more uncertainty builds, and the more people begin to look for other options. This can actually hurt an acquisition deal, since key employees may be a factor in the deal.
By bringing these high-value employees on board early in the process, enthusiasm for the deal can be determined, and if necessary, incentives to make staying more attractive can be offered. At the same time, keeping communication regular and transparent will help you keep the rumor and untruths at bay.
Who to Tell, What and When?
When to inform staff of a pending merger or sale can be a difficult decision.
Tell them too early and confidence can falter if the deal falls through. The staff now knows the company is being actively considered for sale or acquisition, which can also lead to a mass exodus of employees who are trying to hedge their bets in case the acquiring owners decide to cut staff, reduce payroll or replace them with handpicked alternates.
Tell them too late, and suddenly the entire arrangement can be interpreted as being a clandestine, backroom deal done without regard for the repercussions to the workers who will be caught in the middle and might suffer as a result. Morale suffers, suspicion mounts and exits occur, hurting productivity and possibly affecting the deal. Your staff represent part of the value of the business, so if there is a sudden departure of talent it could affect buyer perception of the viability of the business.
Once the ink is dry on the deal, immediately put out a statement that not only discusses the details of the change in company ownership, but also the reasons why it was done. Discuss in frank terms, as much as is feasible, about how this transition will affect each department, and/or position with the company.
This degree of candor will go a long way in addressing and allaying employee concerns and building confidence about their future with the organization.
Making the Announcement
Once the office has been officially informed, follow up with a meeting for all staff, or at the very least all leadership. Detail how the deal began, how it proceeded, and how a final agreement was reached. This is the time to present a compelling vision for what the future of the company might be and how it will positively impact each team member. For now, remaining focused on the big picture will help outline the benefits employees will enjoy once the transition goes through.
Explain What Will Happen and When
Workers will want to know exactly when the possession of the company will change hands, and current management will end. This plays back into building employee confidence by demonstrating an orderly transition, and by reassuring them that there are no nasty surprises waiting for them once the smoke clears.
Communicate the expected timeline, and express enthusiasm for the deal and confidence in the new owner and management.
Introduce the New Team
Introduction of the new owner and their executive team should be done as soon as possible, and before their goals and intentions for the future of the organization are broached since employee perception of the new owner will play heavily into how those plans are received.
Change is difficult and terrifying, and hearing the intentions of a faceless organization will only add to that fear.
Let workers become familiar with the new owners before the bold new direction for the company is announced.
Update Team Members Regularly
Transition will take time to implement.
Maintain transparency throughout the process by keeping employees in the loop with regular updates and progress reports.
Maintain consistency in the messages by always returning back to the ongoing narrative of benefits the transition will bring and how the transition will help move the company into the future.
Optimism at this stage is paramount, we want to build enthusiasm and anticipation for what is happening.
Give employees the opportunity to voice their opinions and concerns.
Start Early, Go Slowly
An ownership transition is an exhausting undertaking for all parties involved. Along with planning, organization, problem solving, and communication, patience is absolutely essential for the process to move ahead in an orderly fashion.
That’s why it’s so important for the process to start early, and progress incrementally.
A period of adjustment by staff will be needed, as they reconcile themselves with this massive change in their working environment.
It should be understood that even when all these steps are followed, obstacles and roadblocks will still occur. Not every employee will be on board with the changes, but by maintaining an open channel of communication early in the process, we can manage to execute an ownership change without a massive disruption in worker productivity and morale.