Paul Holmes 19 Apr 2001 // 11:00PM GMT
This entry describes the employee communications initiative undertaken to support the merger and integration of Honeywell and AlliedSignal. Early in the merger-integration process, communications was identified as one of five key merger success factors, essential to bringing the disparate companies together and engaging employees in helping Honeywell International achieve its ambitious financial and operational objectives. The six months leading up to the merger closing on Dec. 2, 1999, were characterized by a rigorous merger-planning process, which included a robust multi-channel employee communications component. The formal closing of the deal marked the beginning of an equally intensive integration process in which employee communications played a starring role. Thanks to a passionate commitment to communications by senior management, a sound communications strategy and excellent implementation, this merger-integration process was rated highly by employees and has been the subject of benchmarking sessions by the International Association of Business Communicators.
The Honeywell and AlliedSignal “merger of equals” created a new $24 billion, Fortune 65 company with 120,000 employees in 100 countries. The New York Times heralded the deal as “A Merger Made in Heaven” and Mergers and Acquisitions magazine named it 1999’s “Strategic Merger of the Year.” Employees were also optimistic (a pulse survey found 87% of employees “confident” or “very confident” the merger would succeed). But with jobs at stake, new leadership in place and the heavy lifting of integration ahead, employees demonstrated an insatiable appetite for information about how the companies would come together and how the merger would affect them personally. The initiatives described here were developed to deliver information employees wanted and needed and to enlist them in achieving ambitious company goals.
To develop and implement this communications strategy, we engaged a team of 19 senior communicators from the company’s major business units and geographic regions. We also worked with more than 200 location communications contacts on implementation. Foremost among our planning challenges was uncertainty about the timing of regulatory approvals. As a result, we needed to prepare materials in advance – sometimes without complete data – and be prepared to implement the plan on short notice (two days, as it turned out). Following were the key objectives of the merger communications efforts:
- Reduce employee uncertainty by providing a timely, accurate and proactive flow of merger-related information via multiple communications channels.
- Help create and communicate a shared vision, values and goals for the new company.
- Inspire employee confidence in the vision and leadership abilities of the new chief executive officer.
- Create employee excitement about the merger and help employees understand the scope of the new company.
Merger consultant Price Pritchett emphasized the importance of addressing employees’ personal concerns, such as job security and employee benefits, before asking them to help achieve company objectives. In addition to information originating from the Integration Team, we made sure that questions raised by employees via two-way communications channels were addressed. To minimize ambiguity, we emphasized speed, candor and accuracy and committed to making the company – rather than Internet chat rooms or the media – the best source of merger information. Our strategy was to let employees know when the company expected important decisions to be made and to provide them with information when it became available, even if it was incomplete, and to follow up with additional detail as soon as it was available.
Communicating Integration Information. A dedicated merger-integration Intranet site was launched early in the planning cycle and quickly became the most-visited site in each company. The website included extensive background on the merger and the companies; reprints of articles and executive speeches; and presentations, messages and tools for managers’ use in talking with employees. The website also gave employees access to the “UpWords” question-feedback process (also available via e-mail and fax). Employees submitted more than 750 questions during the merger-integration period. Answers to questions of broad interest were provided to all employees. An “Integration News” newsletter was produced each Monday pre-merger and approximately biweekly during the integration phase. It covered integration progress and communicated routine merger decisions. Integration News was e-mailed to some 80,000 employees, posted on the web and handed out to employees without e-mail or Intranet access. Major integration developments directly affecting employees were communicated within 24 hours via special editions. Key merger-integration information was produced in nine languages. Input from the “UpWords” process validated that job security and employee benefits were foremost in employees’ minds during the merger-integration (85% of questions focused on those subjects). We openly communicated merger-savings objectives and told employees that layoffs would result from eliminating redundancy and improving efficiency. The blending of some benefits would affect 35% of employees, though the overall value of their programs would not change. We began an aggressive multi-channel initiative to communicate changes and help employees become familiar with programs and administrative processes.
Communicating Vision, Values and Goals. Honeywell’s CEO and leadership team believed a shared vision, values and operating goals would help shape company culture, guide employees’ actions and focus their efforts on helping Honeywell succeed. After helping the senior team develop several draft vision statements, we conducted on-line and in-person focus group sessions to gather employee feedback. About 500 employees from all parts of Honeywell participated; their input was used to develop the final vision statement and create a set of values that was both realistic and aspirational. The CEO established four key goals for 2000, which fed the company goal-setting process, ensuring aligned business unit, team and individual objectives. We developed a phased approach to aggressively communicate vision, values and goals and build employee understanding and acceptance of them. Videos, posters, websites and screensavers were developed to promote the vision, values and goals; vision/values plaques were placed in meeting rooms and other common areas company-wide. Vision, goals and values were covered extensively in the business unit publications, in face-to-face venues and in electronic media. We developed a brochure, “What it means to say ‘I’m with Honeywell,’” designed to communicate the company’s employee commitment and expectations.
Inspiring Confidence in Leadership. We undertook an effort to aid the leadership transition; make Chairman and CEO Mike Bonsignore more visible; help employees get to know him, his vision and his management style; and build confidence in his ability to lead the new company forward. Bonsignore and retiring Allied CEO Larry Bossidy were featured in a video that provided an opportunity for Bossidy to express confidence in Bonsignore and for Bonsignore to thank Bossidy for his contributions. We worked with Bonsignore to develop a personal message platform, which helped focus messages and ensure consistency. In December 1999 we began a “road show” of global CEO face-to-face meetings. We used two types of meetings. In “town hall meetings,” Bonsignore met with large groups – often several hundred employees – in hour-long sessions consisting of a short prepared presentation on the new company followed by a question and answer period. In “skip-level meetings” the CEO met with groups of 10-20 employees in an informal setting (e.g., over lunch) without local managers present. These off-the-record discussions opened lines of communication and gave the CEO unfiltered employee input. Technology further extended the CEO’s visibility. Four town hall meetings were broadcast live to employees in remote locations and meetings were videotaped. We produced four other CEO video messages in the first 10 months of the merger. We also sent 11 audio messages to employees and began regular “Messages from Mike” that were posted on the Intranet and reprinted in employee publications.
Launching a New Company. We developed a communications strategy and materials designed to excite employees about Honeywell’s possibilities and help them understand the new company. “The Power of One” was the launch theme. The day the merger closed, we broadcast a message to employees with voice-mail accounts, which was also sent via e-mail, posted on the Intranet and distributed to factory workers. We developed a launch event template to help businesses hold employee events that were both celebrations and opportunities to learn about the company. To support local launch events, we developed corporate-wide deliverables including a video produced in nine languages. The video included a message outlining the priorities for the first months following the combination and an overview of the company’s products, markets and capabilities. An expanded manager’s toolkit offered message points and other tips for conducting the event. We also produced “Performance,” a four-page, tabloid newspaper that provided an overview of the new company, its organization, locations, products and capabilities. Each employee received a commemorative Honeywell belt pack and a special coupon booklet. The booklet covered more than 70 examples of products made by Honeywell or by one of its customers using Honeywell technology or materials.
Success of this communications effort was measured using both quantitative and qualitative techniques, including focus groups, informal polling and data from a June 2000 survey of all employees. Many survey questions related directly to communications. Fifty-one percent of survey respondents felt “well informed” about matters affecting them, compared to an industry high-performance norm of 43%*. Sixty-two percent felt they had the information needed to do their jobs well vs. an industry average of 59%. We equaled the industry benchmark of 32% of employees who felt “well informed” about what was going on in other parts of the company; 78% of employees felt that benefit changes were well-communicated and easily understood. Sixty-seven percent of employees said they recognized the importance of meeting customers’ needs, a key element of our vision; 69% said they understood their workgroup goals and objectives, which were linked to company-wide goals. Fifty-five percent said they understood and supported the company’s strategic direction. While 41% expressed faith in the company’s overall leadership, 49% felt positively about senior corporate leadership. We believe company performance issues that caused adverse publicity and a decline in stock price immediately before the survey was conducted adversely affected both numbers. More than 90% of attendees at Town Hall meetings found them valuable. During these sessions the CEO specifically asked employees about the quality and quantity of merger communications. Analysis of the feedback indicated a high level of employee satisfaction; negative comments regarding communications were extremely rare. About 30,000 employees (25%) returned entry cards for the drawing that was part of the coupon book.
Special note: While the Honeywell-AlliedSignal merger is considered a success, our merger communications challenges and opportunities continue. On Oct. 23, 2000, Honeywell agreed to be acquired by General Electric, cutting short our communications strategies specifically related to the Honeywell-AlliedSignal combination so that we could concentrate on developing a new communications plan covering the GE-Honeywell combination. We have been able to apply many of the lessons learned in the Honeywell-AlliedSignal merger to this new challenge.
*Source: Sirotta Consulting