If your PR or digital marketing agency is considering an acquisition, you likely know how crucial it is to incorporate careful, strategic planning and collaboration across both entities to ensure a smooth transition and happy, motivated employees.
Effectively communicating the changes throughout the process — both internally and externally — is also important, if not vital. Unfortunately, in cases where communications were handled poorly during an acquisition, management ends up with dissatisfied employees, skeptical clients, and a baffling brand message, among other issues. These effects can create long-term—sometimes permanent—damage.
Whether your acquisition experience is a seamless one depends on numerous factors surrounding company culture, chemistry and collaboration, as well as the blending of best practices of each firm.
Dave Imre, CEO of NYC/LA/Baltimore digital marketing agency imre, knew what he was doing when his agency acquired Los Angeles-based, boutique PR firm, JMPR, last October. I had the pleasure of working with both agencies to help consummate the deal.
Imre’s operations previously comprised of the imre Health brand alongside its consumer practice, and top brand clients including PepsiCo, Dickies, AstraZeneca, T. Rowe Price, Under Armour Inc. and John Deere. JMPR is known for specializing in the luxury, lifestyle and transportation industries, and works with numerous Fortune 500 companies including Infiniti, Airstream and Bugatti.
According to Dave, the acquisition process has progressed rather seamlessly since planning and negotiations began almost a year ago. As part of the deal, imre has added JMPR’s staff of 13 to its West Coast operations, doubling the size of the firm’s L.A. office. Imre’s total staff size is now 150 across the combined company.
From a staff and client retention standpoint, Dave said the acquisition has been a positive experience. He attributes the success thus far to numerous crucial factors, including strategic planning. “This meant gaming out every possible scenario ahead of time, and learning as much as possible about the people we were going to inherit ahead of time,” he said.
For those executives considering an agency acquisition, he recommends:
Get all leaders involved
Change can be difficult for employees, and it’s important to understand that they’ll need time and support to adapt to the new “normal.” For a change as significant as an acquisition, all senior executives in each firm should be active, communicative participants before, during and after the process. Senior management must commit to roll up their sleeves and engage with staff members at all levels to keep operations seamless, especially during the transitional period.
“We didn’t want to leave anything to chance during the [acquisition] process,” he said. “We were extremely high-touch with our employees, especially post-sale. In fact, on day one, our two partners and five other senior leaders were on-site in L.A. to welcome new employees and to show them our serious commitment … the goal throughout the process has been to show our dedication to our employees personally.”
Make communication and culture top priorities
The importance of integrating two different cultures can sometimes be overlooked during an acquisition. However, nuances must be considered early on to avoid hindering morale. For instance, imre invested ample time carefully evaluating any potential cultural differences between the two agencies to mitigate potential challenges and circumvent any surprises. Dave said this approach helps avoid hurling new employees into an unfamiliar environment.
“We were very honest from the start, and we outlined the anticipated changes to allay any fears. We also communicated that new systems would be put in place, new career path opportunities, but there also would be plenty of training to eliminate any surprises.”
Dave stressed the importance of laying out the groundwork and addressing employee concerns immediately, including keeping communication lines open about the state and security of jobs, roles and responsibilities, growth plans and more. With this approach, he noted, not a single employee skips a beat after a deal is completed.
imre’s management team intentionally “hand-held” each employee along the way, from helping individuals decide on benefit and healthcare options to providing one-on-one counseling for those interested in personal growth and development opportunities.
Focus on your client retention strategy
In general, many clients are supportive of acquisitions, provided that an organization is open and honest about the motivation behind the sale. They also want to be assured that they’ll continue to receive the same level of service they’ve come to expect.
In imre’s case, management dedicated time to communicate the reasoning behind the new direction to all clients. “This has been key to keeping everyone engaged and informed both on JMPR’s side and on our side,” he said.
Just prior to announcing the acquisition publicly, Dave said both agencies personally called top clients on each side to clearly spell out the benefits to them of the deal. Also, within four weeks post-sale, these same clients received in-person, follow-up meetings. “We attribute our client retention rates to this constant, clear communication,” he said.
The bottom line
The process of successfully acquiring or merging companies can take months or even years, and depends, in part, on aspects like culture and size. And both organizations will no doubt experience change as a result. Yet it’s an outstanding opportunity to innovate and open doors.
The takeaway here is to continuously keep communication lines open and keep updating employees, letting them know their place and how they can help make the acquisition process more seamless.
Dave stressed that if both the buyer and seller are fully committed to transparency and constant communication to all stakeholders from the start, the integration period can be a genuine growth opportunity.
“Be sure you talk the talk and walk the walk,” he said. “Your employees and clients will be looking at everything you do to make sure you keep your word throughout the process.”
Art Stevens is managing partner of The Stevens Group, comprised of consultants to the PR agency profession and focusing on mergers, acquisitions and management consulting.