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As a business owner who is responsible for employees, you try to toe the fine line between open communication and divulging too much information to your employees. Working in secrecy leads to employees being suspicious about what is going on behind closed doors. They begin to suspect that important decisions that could affect them are being made without their opinions being given proper recognition. You mean no harm by keeping your employees in the dark about the decisions you are making. It is important that all details about the decision you are making are firmly in place before communicating information that is not entirely correct.
Maintaining Secrecy Until the Deal is Done
One such situation where this is completely warranted is the selling of your business. Just because a buyer has committed to acquiring your business it does not meant that the sale will occur. There are numerous factors that go into the selling of a business. One disagreement about a certain point of the sale can lead to the deal being called off. Therefore, it would be unwise to communicate the selling of your business if you are not sure that it will occur. Once this information is known by your employees they will begin to assume that there must be an issue going on with the business. This affects their performance because they are under the belief that their jobs are at risk of being lost.
Their assumed fears of the worst occurring may not necessarily be warranted but their belief is that you would never put your business up for sale if everything was fine. The truth is you may just want to move on from your existing business to pursue another business opportunity. Selling your business will help you raise the capital you need and to focus solely on your new business. You do not need to immediately reveal this information to your employees because it could affect how they perform their duties. One of the worst things that could happen is reduced productivity and employee discontent as a result of knowing the business is about to be sold. This might easily scare a potential buyer away because of potential employee issues.
You are also putting your business at risk of losing customers and making your suppliers nervous if word spreads that the business is being put up for sale. Customers will wonder if the product quality and customer service will be affected by bringing on a new owner. Suppliers will wonder if they are going to lose the relationship with your business once the new owner comes on board or if your reason for trying to sell is the bad financial state of your business, leading them to even doubt your business’s ability to keep paying for their services. This is why it is very important that you initially keep everyone in the dark about what is going on behind closed doors before going public. People’s perception of the situation can be completely different from the actual reality. You will then spend too much time on trying to calm fears, instead of focusing on ensuring business goes on as usual so that the buyer remains intent on following through on the purchase.
Communicating the Sale to Employees
Once it has been verified that the sale will actually occur, you need to inform key people in your company about the pending transaction. These key people are other executives who will be responsible for ensuring the transition of ownership goes as smooth as possible. Your CFO may be needed to provide key details about your current financial performance and what can be expected in the future. The CMO may need to communicate the current marketing strategy and how it will impact future sales. These key people will need to communicate the specific strategies being used but these discussions do not need to be spread to your employees just yet. It needs to be strictly enforced that the conversations relating to the sale of the company remain confidential until the sale has been finalized. This confidentiality is crucial because any leaked information about the sale may affect the purchasing decision.
Once the sale has been confirmed, you will now need to inform your managers about the transition in ownership. If you are leaving the business for good once the sale has been made the new owner will want to ensure that the business is being run by a group of people who can handle day-to-day operations while leading the business towards growth. Once again, letting certain employees know about the sale of your business can eventually lead to the information leaking to your entire organization. This is why you need to hold out as long as you can before it is mandatory that the information relating to the sale is divulged to your whole business. You do not need for rumors to start spreading through your organization that leads to productivity being affected.
Now that all details of the sale have been finalized, you will need to inform your entire organization about what is about to occur. This announcement will need to be a collaboration between you and the new owner. Therefore, it is best that you both come up with a plan that can lead to the transition occurring as smooth as possible. This is especially true when any business changes will be made that are completely different from the current procedures in place.
Once employees are notified of a potential sale their minds will begin to focus on their immediate future. They will want to know if they still have a job and how their roles will be affected once the new owner takes over operations. You will need to anticipate these types of questions being asked and prepare answers for them. Providing ready answers shows that you are aware of your employee’s concerns and have taken the time to determine what type of issues will be most relevant to them. Having these answers prepared will also be helpful in ensuring that your managers provide answers that are consistent with yours. This helps to ensure that everyone is on the same page so that employees are not hearing completely different answers from different levels of leadership. If this was the case, they will believe that the company’s future may not be certain because consistent answers are not being provided.
Once again, you will need to inform your managers ahead of time before informing your employees. Doing so allows them to fully understand the transition process and come to terms with the news that they are hearing. It does not help to inform them at the same time as your employees because they will be stunned and unable to act as leaders who can be depended on to help communicate transition details with your employees.
After your managers have been informed, you will now need to inform your employees. They will have questions once they are notified, so it makes sense for the new business owner to be present when the sale of the business is being revealed. This allows for your employees to meet their new boss and ask him or her about what will occur under their leadership. This is the time for the new business owner to hear the opinions of his new employees so that they can understand how to make the transition process as smooth as possible.
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Transitioning to New Leadership
You will want to encourage the new business owner to create some camaraderie with the employees so that they can get to know him or her and their vision for the business under their leadership. It would be helpful if they bring in breakfast or lunch so that they can sit down with their new employees and pick each others’ brains about the future direction of the business. Encourage them to have one-on-one conversations with each employee (if it is a small organization) so that they can learn the different personalities that are within their new organization.
Honesty will also need to be used if there are job cuts that will be made. Inform the people who will be affected by the job cuts so that they can start preparing for their future elsewhere. You do not want them to completely check out from performing their job duties just because they will no longer be needed long-term. Offer a short-term retention business that keeps them engaged for the remainder of their duration with the company. Help these employees find jobs by allowing them the flexibility to go to job interviews and informing them about job openings that match their skills.
Preparing carefully and strategically for the sale of the business is the best advice that can be given. Determine the issues that will cause the most concern for your employees and plan as to how you will address these concerns with effective communication. Your employees will be anxious but you can ease these concerns by providing answers that help them understand how the transition will proceed . There may be challenges to address, such as jobs being lost, which can be difficult to announce. But, with a well-communicated plan of action, these challenges can be overcome to lead the future of the company in the right direction.
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