If you have been part of selling a business in the past, you understand the delicacy of good communication and keeping the news confidential until the time is right. Mishandling communication can lead to a host of problems: valued employees might leave, morale could plummet, and the company’s operations might suffer, not to mention potential damage to your reputation and financial stability. What you share, when you share it, and even how you share the sale of your company is exceedingly important. Let’s look at some best practices for communication so that you can head off any pitfalls and make it a win-win situation for everyone.
Craft a Clear Communication Strategy
First and foremost, you need a solid plan for sharing the news of the sale of the business. This means coordinating with the new owner(s) to agree on what will be shared, how, and when. By working together, you’ll craft a unified front and be able to think through essential things such as whether some employees need to be told before others and how you’ll address inevitable questions and concerns. A proactive approach lets you control the narrative, preempting rumors, and misinformation from spreading.
Prioritize Transparency
Honesty truly is the best policy. Share as much as you can about the sale, the reasons behind it, and the implications for the company and its employees. Be ready to address common questions such as identity and background of the new owners, job security, changes in pay or benefits, or changes in leadership, strategy, or operations. It’s natural for your team to worry about these things and it’s best to be proactive and address these topics directly. If you don’t have all the answers, admit it, and commit to keeping everyone updated as more information becomes available. Give employees the opportunity to ask questions and express their concerns. This could be in the form of Q&A sessions, town hall meetings, or direct conversations with employees or managers.
Inform Key Players First
Deciding who to inform first is a strategic decision based on the organization’s structure, culture, and the specifics of the sale. Typically, senior management should know before the wider team because they’ll play a crucial role in managing the transition and maintaining unity. Any employees that are involved in the due diligence process or those in critical operational roles may also need early notification to ensure retention. However, it’s imperative that these early confidantes understand the importance of confidentiality until the official announcement, and you may want to ask them to sign a non-disclosure agreement.
Time Your Announcement Wisely
The ideal time to inform employees is when the sale is definite, such as signing an Asset (or Stock) Purchase Agreement. Announcing the sale before it’s finalized can create uncertainty and unnecessary stress if the deal falls through. There may also be contracts or legal obligations that dictate when you can announce the sale so be sure to check those first. You’ll also want to choose the timing of your announcement carefully to minimize disruption and anxiety. It’s a good idea to avoid periods of high stress or right before weekends or holidays. You want to balance giving people appropriate margin to process but not too much time to think about something without being available to address questions or concerns that may arise. Overall, your timing should be tailored to your company’s unique culture and operational rhythms to ensure the message is received as positively as possible.
Provide Reassurance and Support
Remember, being on the receiving end of this news can be daunting. Your goal should be to alleviate fears and maintain trust. The tone and how you communicate changes are important. It’s generally a good idea to introduce employees to the new owner in conjunction with the announcement so imaginations don’t run wild. You and the new owners (if you are announcing it together) should be prepared to assure employees of minimal changes in operations or personnel. Explain that their jobs, benefits, and work environment are a priority. If possible, offer incentives to stay, such as retention bonuses or other benefits. Even after the initial announcement, ongoing communication to let employees know of key dates, external communications, and transition plans are imperative. At a minimum, weekly updates until the transition of ownership is complete will help the employees to feel knowledgeable, important, and valued. Consider also offering a confidential way for employees to ask questions and express any concerns they may be feeling about the transition.
Final Thoughts
While it may feel like a lot to prepare for announcing the sale of your business to employees, how you treat this step in the process is pivotal. You should approach sharing the news with care, sensitivity, and think through what you would want to experience if you were on the receiving end of this news. While every situation is different, the goal should always be to minimize uncertainty and maintain trust among employees. Transparency, empathy, and professionalism are the essential components of effective communication during times of change. By handling the process with thoughtfulness and consideration, you’ll minimize any negative effects of such a significant change and reduce the chances of employees leaving, setting the company and its new owner up for continued success in the future.
