News of a Merger or acquisition certainly has the ability to shake up a company's workforce. Questions about layoffs, restructuring, and even shutting the company down will inevitably race through the minds of employees.
So when CDW, a provider of brand-name tech products and services for business, government, and education, announced it would no longer be a publicly held company and was being acquired by Madison Dearborn Partners (MDP) and Providence Equity Partners for $7.3 billion, it relied heavily on an internal communications plan to quell those fears and answer those questions. Gary Ross, GM of corporate communications, says an effective internal communications effort is vital for a company going through a merger or acquisition.
"Communications is essential in any kind of M&A situation because by their very nature the news can come out all at once and be very jarring," Ross says. "And you have one chance to make it right and if you're prepared and have a thoughtfully prepared program, you can turn a situation full of uncertainty and doubt into a positive."
Ross says because a number of employees were also stockholders in the company, they could not learn about the sale until it was announced to the media.
As such, Ross says the guiding objective for him and the members of his team handling both internal and external announcements was to make sure it could keep their coworkers focused once the news was released. Making sure the company's customers and vendor partners maintained confidence in it was also a significant part of the plan.
"This was a piece of news that really [could] throw people for a loop," Ross says. "We understood there would be that kind of reaction and wanted to communicate that the company was not going to be carved up and sold off. We also had that negative image of buyouts to try to overcome."
In order to keep coworkers - the term used for employees within CDW - focused, Ross sought to construct a communications plan with a number of key messages that would answer most, if not all of their questions. Those messages included: explaining both that the firms were making a major investment in CDW to support its growth, and how coworkers would benefit from it; that meetings were held between management and the firms about growth strategy; who the equity firms were; and how the whole thing came about and what the next steps were.
Mark Gambill, VP of marketing, says the communications department played the role of gatekeeper with regards to the messaging the company wanted to convey.
"They kept challenging what we had, so we kept editing and re-editing," he notes. "They bring to the table that third set of eyes that is so critical. By eyes I also mean ears and minds because [the messaging] is basically answering peoples' questions that come to their mind in an emotional way. And that emotion [can] override what the words say on the page or what's said in an interview."
Ross says customizing the messaging to the various audiences, which included coworkers, management, customer-facing coworkers, and vendor-partners was key. "We had to cover all the audiences and give them information that was relevant to them," he explains, "so it felt as if they were being communicated to as personally as possible."
The announcement was made on the Tuesday after Memorial Day. Ross worked through the holiday weekend with Mike Hatcliffe, MD of Ogilvy PR Worldwide's Chicago office, on finalizing the communications plan. The announcement was made internally via e-mail and a recorded voicemail from CEO John Edwardson. Executives held town hall-style meetings with their individual departments the next day, and there was a live conference call with Edwardson and executives from MDP during which coworkers were allowed to ask questions.
FAQs were also posted on CDW's Intranet site, Coworkernet, and "special talking points and Q&As were provided to managers for discussions with employees." Ross says. The sales force also received a Q&A document for customer questions. CDW also sent a release to its vendor partners.
Keeping coworkers focused and maintaining customer confidence were two of Ross' main goals. And based on CDW's daily sales figures for the Thursday following the announcement, he succeeded.
"Thursday turned out to be one of the top five sales days in the history of the company," Ross says. "The communications played a big part in that because the company didn't shut down. We were not a workforce that was totally distracted by this news. The communications allowed people to look, take time, and listen to what management was saying. They understood it and turned around and got back to work."
At a glance
President/CEO: John Edwardson
Headquarters: Vernon Hills, IL
Revenues and Latest Earnings: 2006 net sales - $6.8 billion
Competitors: Dell, Insight, PC Connection
PR/Marketing Budget: Undisclosed
Key Trade Titles: Information Week, CIO magazine, BusinessWeek, Fast Company
Gary Ross, GM of corporate comms; Beth Dempsey, senior internal communications specialist; Clark Walter, senior PR consultant
Marketing Services Agencies:
PR agencies: Ogilvy PR Worldwide
Ad agency: JWT