By Marc Hausman, President & CEO, Strategic Communications Group, Inc. (Published Feb. 9, 2004)

When significant organic revenue growth is difficult to achieve, many companies turn to a merger and acquisition (M&A) growth strategy.

When this occurs, companies must have in place both internal and external communications to make M&A plans clear and compelling to investors, bankers, customers, partners, employees, press and analysts.

What you say, and when you say it, are crucial factors for ensuring the success of M&A activities and how quickly a growth plan can be implemented. The key is to have a dedicated communications strategy in place to facilitate that process.

Following are five steps to consider as a company embarks upon an M&A communications program.

Gain Third Party Credibility

Third party credibility is crucial. It's less persuasive to prospective audiences to hear strategy coming directly from the company than to have it relayed by respected industry influencers. Positive comments from the press, analysts, association executives and other industry observers provide validation of M&A activities. Gaining credibility through these channels creates a compelling sense of momentum, and fosters an environment in which companies can more quickly and easily accomplish corporate goals.

A basic mistake in external communications is to presume that responsibility ends when an article is published, an interview is conducted or an analyst report is released. To the contrary, that's when efforts to influence the market must be redoubled.

Make it a habit to repropose press and analyst attention and coverage by proactively pushing information to key stakeholders, perhaps in an e-mail newsletter with Web links and article summaries for key media placements. Put third-party credibility to work for the company, and always provide context as to why this coverage is important to the audiences it seeks to influence.

Context is Key

Nobody loves a playground bully. And nobody really loves a leveraged buyout artist, either. Make sure an M&A strategy, no matter how aggressive, is put in the proper market context through effective message development. That way the acquisition desired is well received by both the acquisition target and those in the marketplace that may influence the outcome of that deal.

Communicate to the market that the merger sought improves, not detracts from, the overall business climate and that it will provide better, not less, customer choice. Getting a merger right, especially the first one, can make the second and third acquisitions easier when things are put in the right context.

Brand Counts

In the heat of a business deal is no time to have an identity crisis. To the contrary, reinforce the company's brand even more strongly than in ordinary times because the very process of M&A can lead to brand dilution. Awareness of the M&A strategy must counterbalance, not eclipse, a company's brand identity and value proposition.

Consistently communicate and reinforce to key stakeholders the company's value proposition and the strength of its culture. Enhancing brand valuation should be part of the M&A strategy.

Network, Network, Network

Lean on professional relationships - service providers should not only be on board, but supporting the company through the process.

While burdens of due diligence and negotiations are part of the M&A process, it is still important to network and maintain visibility in the market at industry functions. Doing so will identify M&A opportunities, while at the same time contribute to the company's brand awareness among peers and influencers.

Look to the company's network of service providers to tap into their relationships to help uncover M&A opportunities. For example, if a company is merely focusing on placing articles and writing press releases, it won't reach the full potential of its communications outreach. Most service provider partners have a network to tap into to make it easier to meet those business goals.

Keep Communication Channels Open

Don't neglect internal communications.

If an M&A strategy is an integral part of the company's growth plans, consult the people whose lives might be affected the most. With the exception of the board or financing partner, this does not involve asking for permission to acquire a competitor; it means simply keeping them in the loop and clear on corporate strategy.

As with any form of business communications, stay ahead of the story. Frame the news, craft the message and control its distribution. By being proactive and not reactive it is more likely the company will gain support and avoid a communications catastrophe.

The most important thing to convey to internal audiences as part of proactive communications is honesty. Even if the impending acquisition will mean changes in staff count, or reworking of departments, be open about the effect this event will have on company operations. Employees realize that restructuring and consolidation are often part of the M&A process.

Once key employees and other stakeholders are on board, make sure everyone is singing from the same page. Everyone must understand and be able to consistently articulate a company's key messages so that all audiences get the same message. Keep in mind, however, that in formal external communications, it's essential to name official company spokespeople, and have any inquiries from the media or analysts directed to these representatives.

Mergers are a lot like marriages. It takes clear, open and honest communications and a consistent message to ensure success.

Marc Hausman is president and CEO of Strategic Communications Group, Inc. (Strategic), a public relations agency that provides integrated communications and business development services to help its clients increase sales, profitability, and corporate and product valuation. Contact Marc at mhausman@gotostrategic.com.