A brief case study on fair disclosure to employees

When do you tell employees about an impending acquisition?

An important aspect of good employee communications is fair disclosure. Here's an example that illustrates how the lack of communication had significant negative repercussions.

"Rumors were out there that the company I worked for was planning to expand, but employees were not given any information about the plans. In fact, employees felt they were being "strategically" kept in the dark.

"When the company did go ahead with an acquisition, the COO decided to let a newspaper scoop the official announcement. Employees found out about the deal in the morning paper.

What was the result?

"Employees, and even managers, were angry that nobody had been upfront with them.

"Adding insult to injury, it came out that the communications staff had prepared a communications plan in advance that included recommendations for an internal announcement followed by a media conference, but this was put aside by the COO for unknown reasons.

"Not only was it baffling for everyone to try to understand why we were kept in the dark, we were all mystified as to why the most effective communication tool the company had - the employees who had direct, daily contact with customers - was disempowered.

"It was a long uphill battle to get the company back on track."

Sandra comments:

Although it is ideal to keep employees informed about company plans whenever possible, in a merger/acquisition or purchase there may be confidentiality and security issues that prevent the company from disclosing to the employees in advance.

But there is no excuse for a company to advise the media before the employees.

The only time it's acceptable for employees to find out what's happening by reading or hearing about it in the media is when there is sudden crisis that no one could have predicted.

The best practice is to make an internal announcement followed by a media release (exactly what this company's communication staff had recommended).

If disclosure is an issue and It it's not possible to let employees know in advance, you can make the employee announcement just as the media release is going out on the wire.

Not only does this approach show respect for the employees, it can save your public reputation as well. If employees are approached by clients, media, or the public, they will know what to say – because they've already been informed and advised. That's not only fair disclosure, it's effective communications.

Comment on this case study.

Sandra Thornton has had a special interest in employee communications for more than 10 years. Contact Sandra with questions or comments.

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