This Measurement Life:
Chapter Six in the Continuing Adventures of
Marketing Martha and Bottomline Bob

Mergers Are Murder,
Except when you have measures of success

by Katharine Delahaye Paine

When we last left Martha and Bob, Bob was escaping the floods in Dresden and the flood of accountants back at headquarters, while Martha was fielding questions from a hostile press and escorting Chairman Charly around Europe. Two weeks later, Martha and Bob had finished unpacking, done their laundry and were trying to decide if they’d recovered from jetlag as they filed into the boardroom for a surprise executive meeting.

Martha was betting that the announcement would be that Charly was pregnant; Bob as usual was worrying about the numbers. He knew the auditors hadn’t found anything, but the investigation wasn’t over yet. Needless to say, neither of them was at all prepared for Charly’s opening line.

“We have agreed in principle to be acquired by Megabox Corporation. The announcement will take place as soon as the due diligence is complete which should be in a couple of weeks. Martha, you need to put a communications plan in place. Bob, whatever their accountants need, get it to them fast. Any questions?”

Too stunned to be coherent, Martha simply asked, “Why?”

“Megabox has billions in assets, but lacks a presence in our marketplace. They could try to build a brand in this space, but it would take years. It’s faster to simply acquire us,” Charly explained.

“Yeah, but why would we sell?" asked Bob. "Sales are good, revenues are strong."

“We estimate that by combining our two organizations we can effect a 20% savings in operating expenses and a lift to our bottom line of at least 10%.” Charly explained.

“Uh, huh,” said Martha, as she started planning the announcement. “We pre-brief the Globe, the Journal, CNBC—the usual suspects. What’s our key message?”

“What I just told you. We’re increasing shareholder value,” Charly said, with growing impatience.

“What does that mean to the employees?” Martha wanted to know.

“We tell them that this is the way it is, there will be some consolidation, but market pressures demand an aggressive response.”

“Right, and when the media immediately call their inside sources and get the real story, what will our employees say is the reason?”

“We tell them not to talk to the press,” Charly snapped back.

“Right,” said Martha, “That’s like telling my mother not to call my cell phone. Sooner or later, around a dinner table, or on the sidelines of a soccer game, they’ll talk. And what you’re really saying is that in order to make the stockholders richer and increase your bonus, you’re selling out and laying off hundreds of loyal employees who have been here for years. Trust me, by the time the word hits the media, it will sound even worse,” Martha said.

“Hogwash,” said Charly.

Martha knew this was an argument she wasn’t going to win just yet, so she left and hit the Internet. She pulled up all the stories of comparable mergers both in their industry and elsewhere and began analyzing them. She called a couple of friends who had recently gone through a merger and listened to their tales of woe. And she took it all home to Bob.

“Look, it’s going to be okay. There’s lots more opportunity, and since Megabox is buying us for our brand name, they’ll be sure to keep marketing intact,” Bob offered.

“Yeah, right, and we’ll have peace in the Middle East next week, too. You know perfectly well that most of the overlap is in accounting and marketing and it will eventually get down to us or them,” Martha grumbled. “But that’s the last thing on my list to worry about. Right now, I’ve got to worry about this launch plan. Charly doesn’t get it. She thinks we can just tell the employees what we want to tell them and they’ll listen and go quietly. It never happens that way. The only way to ensure that our messages get out consistently is by tailoring them to each audience. See, I’ve studied all these other mergers and its always that way. “

There was no cheering her up, and no distracting her (as much as he might want to), Bob peered over his shoulder and caught sight of a nifty little chart. “What’s that?” he said, suddenly curious.

“That’s a comparison of the MajorCarCompanies merger and the Goodman/Acme acquisitions. I pulled the Chrysler data off Factiva, and Barbara Benchmarx used to work for Goodman, so she gave me some of her old data. Barbara said that they pre-briefed all the employees in small groups, sent out emails and started a Web site to make sure that all their questions were answered. The amazing thing is that even when the layoffs happened, the employees that were quoted said things like ‘We know that they tried their best, but we understand what had to be done for the company to survive,’” Martha gushed.

“But they can’t know everything in advance, it would be all over the press,” retorted Bob.

“I’m just saying that if we put our efforts into getting the employees to understand rather than just the media and Wall Street, in the long term our employees will be happier and if they’re happier, our customers will be happier. Besides, look at these numbers,” Martha said, knowing that she had to stop talking and start pointing at charts soon or she’d lose the argument.

“See, only 2% of the coverage of the MCC merger contained any of their key messages, and about 20% said exactly what they didn’t want to say. But at Goodman Acme, 15% of the coverage positioned the merger exactly the way they wanted it positioned. So there.”

“So what?” said Bob. "What do you want me to do with this info?”

“So, we take this to Charly and the board tomorrow. We convince them to craft specific messages for the employees and then take their time to make sure they really are being heard. We need to listen as well as talk at them, and we need to demonstrate that we really do care about their welfare,” Martha said

“How do we do that?” harrumphed Bob.

“How about severance packages, and local aid to those communities most affected? How about asking the employees what might make the transition easier on them?”

“Tell me again why I need to do this?” asked Bob, more skeptically than ever.

“Because if we don’t, the negative messages will dominate, the employees will grumble loudly in the press and to our customers, our reputation will suffer, customers will flee and the alleged gains from this merger will evaporate,” Martha explained. “Think you can convince Charly?”

“Why me?” grumbled Bob, “You’re the image maven.”

“Right. And that’s exactly why I need you to do this. She’ll expect me to say this, but if it comes from you, she’ll listen.”

“But you’re the one who did the research,” Bob responded.

“And you can certainly tell her that, but she’ll listen to you because you’re the numbers guy.”

“Oh, all right, but only if you’ll promise me not to talk about it again until tomorrow morning,” said Bob, sliding his hand suggestively up Martha’s leg.

“Deal,” said Martha, sealing their pact with a kiss.

The next morning, Bob went into Charly's office, armed with charts and graphs and got Charly to listen to the arguments enough so that when Martha presented her plan a few days later, it passed the board with flying colors. $10 million in retraining costs to affected communities, a generous severance program, and a great deal of Charly’s time was committed to making it work.

Martha and Bob were toasting their success (although they both knew it was Martha’s research that was behind the victory).

“Now can we just go back to planning our next vacation,” whined Bob. The clock was striking midnight and Martha still wasn’t even remotely interested in anything but whatever she was doing on her laptop. “I married you, not a laptop.”

“Shhh, I’ll only be a minute. Now I’m making sure that our marketing department remains intact…"

Until next time...