Ownership transition can be a stressful ordeal among staff, but employing simple techniques like communication can make the process smoother, says Duane Roggow, vice president of human resources at 1,800-person construction consulting firm Faithful+Gould (New York).
"I’ve been in three or four acquisitions and that many ownership transitions," Roggow says. With each transition, he says, employees have been subjected to pain and agony. This is primarily due to the fact that, no matter if it’s a merger, acquisition, or in-house transition, there’s going to be a change and employees are concerned, he says.
Employees then begin to wonder about job security and there’s a fear over whether or not the new leadership will be successful, Roggow says.
At the same time, he says, the headhunters hear about the transition. "Headhunter activity increases five-fold during an ownership transition," he says. "People are scared so they begin to listen to the headhunters."
However, Roggow says, there are steps firm leaders can take to stem employees’ fears.
Incorporate key members of the surviving firm. As much as possible, bring into the fold those key members of the surviving firm such as the department heads or marketing directors, Roggow says. This will be very helpful because, shortly after the transition, there will be new firm leaders running the organization.
Bring those people on board as soon as it’s legally and functionally possible and explain to them why this is happening, what went on, and considerations that need to take place, Roggow says. They need to know the facts and benefits of the transition.
Provide leadership and a vision. For the new leaders, Roggow says, they need to have a set vision and they need to provide leadership. "In any transition, it’s almost certain that [the old] leadership and vision will disappear. There are going to be changes." The new key people need to recognize that the employees that they are talking to are smart and know that there are going to be changes. "They need to put their own words on it and their own face on it." Again, Roggow says, this needs to be done as soon as possible to help employees with the transition. "You don’t want to scare people any more than they already are."
Celebrate the transition. Usually, there’s an official date for the transition, Roggow says. On the first day after the official transition date, celebrate the change. Admit that the firm is changing and acknowledge that, while the old leadership was amazing, the new leadership is just as exceptional and they have new ideas. "Say it all very boldly and with fanfare."
Get out and meet employees. After that first day, Roggow says, the new leadership and key people shouldn’t just "go back to business as usual. They have to get out and meet with the people."
This is simple if everyone is in the same office, he says. But larger firms can set up video facilities and put their new leadership in front of a camera. "People love to see their new people," Roggow says. "It’s important to get out and put a real face on it, and handshake, sit around, and talk to these people because the people in the organization will have questions."
Reach out to the media and community. Most smaller firms do not have a person in charge of public relations, but if they do, make sure that person is involved, Roggow says. If not, then make sure someone from the marketing department is building up relationships with the press. "You want to make a bigger splash externally than internally," he says. "You want to say this is happening and that’s a good deal." This will provide a big boost to recruitment because it is free advertising.
Additionally, Roggow says, get the key people involved in the community. Firm leaders should be involved in local community groups. "If the firm hasn’t done this in the past, then it’s a terrific time to get visible in the community."
What to avoid
The biggest failing is that the new leadership doesn’t communicate frequently with employees, Roggow says. "As soon as it’s possible, you have to let go of as much information as possible and you have to do it frequently," he says.
Firms need to communicate with employees at least twice a month, Roggow says. "This is important to do even if they don’t have anything new to tell the people." It’s just as important to tell the people that there is no news.-Franceen Shaughnessy (email@example.com)
Duane Roggow will present "Ownership Transition: Make it Positive," at ZweigWhite’s 2006 Best Firm To Work For Summit, Sept. 28-29 at the Swissotel in Chicago. For more information or to register, go to http://events.zweigwhite.com/bestfirm or call 800-466-6275.
This article first appeared in The Zweig Letter (Issue #671, published July 24, 2006).