As someone often caught in the centre of negotiations between my 3 “tweenage” daughters, I’m acutely aware that great communication is key when you’re trying to reach an agreement between multiple parties (especially as an outnumbered parent!). And when it comes to my (other) day job I’m constantly banging on about the importance of clear communication with employees, no matter how challenging the situation you’re dealing with.

With what feels like daily announcement of major mergers and IPOs over the past few weeks (hello Sky Betting & Gaming, Sainsbury’s & Asda, Glassdoor & Indeed, Vodafone… the list keeps growing), it’s reminded me just how vital employee communication is during times of upheaval or change. And as an employee, you don’t get much bigger than an IPO or a merger for throwing some potentially daunting changes into your work life.

In a nutshell, an IPO (initial public offering) involves a company selling their stock to the public for the first time, and moves from being privately owned to publicly owned. Or alternatively you might be selling the business to another major player as in the case of Sky Betting & Gaming. This probably means that a lot of your people (particularly those who’ve been there since day one) are going to make a lot of money, particularly if you’re a fast growing tech company (recent headline IPOs have involved Snapchat, Dropbox and Spotify to name a few). And whilst that’s brilliant news for some, it also poses lots of issues around retention and engagement, and lessons that can be applied more broadly through times of change.

Impact on your people

As we all know, the impact that money has on people is a powerful one, whether gaining or losing a lot of it. And the less prepared your people are the more impact it’s going to have! This means all sorts, from frictions forming across the business to individuals’ struggles with ‘sudden wealth syndrome’, where your people experience real problems adjusting to change. All these things can damage your company culture and lead to difficulty retaining critical people in your business.

While retaining employees once they’ve gained wealth is a key issue, it’s also important to remember that it’s not just about the money: no matter how wealthy someone has become, they still need a defined career path. People want to feel productive - working on interesting projects that give them the feeling that they’re advancing their career. The sudden growth of a company after an IPO, coupled with a possible drop in comms from management, can leave people uncertain and confused.

Impact on your business

To put this into perspective, in the first year of their IPO Facebook saw around 14 senior executives, including the VP, leave the business. And when it’s key leadership figures moving on, those left behind may not be as engaged without the personalities (and mentors) that got them to where they are today, meaning that you may face multiple waves of exiting employees. In total, around 120 Facebook employees left the company post IPO, to either start their own venture or join a new startup. It seems like they were seeking a company culture with similar to pre-IPO Facebook...

Another thing to bear in mind is that becoming publicly owned or merging puts the business under a lot more scrutiny that wasn’t necessarily there before, as once a business goes public, everything from finances to business operations become open to the government and the public. So, failing to meet target numbers and forecasts can lead to a decline in stock price, putting your people under new pressures.

Making the best of it

You can’t avoid uncertainty during periods of upheaval and change. Most of us are creatures of habit and we don’t like it when the status quo is threatened. But a strong people comms strategy will help to make the experience a positive one. Here are some of my thoughts on how to manage through times of upheaval and change:

• Keep your people in the loop from the beginning. Don’t just wait until the day of listing or merger! This means updates on realigned growth strategies and new communications are key for your people. Also, people are more motivated when they clearly understand actions and decisions and have a sense of personal stake in the outcome. An employee roadshow style event to kick everything off would be a great way of bringing everyone on board
• Make sure everyone is informed and part of the discussion. Put a comms plan into place as soon as the IPO begins. Aim it at educating your people on behavioural changes and expectations within a newly public company. Don’t let the rumor mill drive your agenda. Own it!
• Don’t lose your culture - it’s what makes you, you. Going public means your company will become bigger and probably more formal, but this doesn't mean your agile, passionate, and electric startup culture has to give way to a corporate feel... Keep talking with your employees and make sure they remain happy.
• Help your people prepare for the major change. After its IPO, Google invited six wealth managers to make in-house presentations to their newly minted employees.
• Keep your people passionate about what they’re doing. If not, they could up and leave since they may no longer have to work for income. But, if your people feel passionate about the challenges they face in their job, they will stay. If your people aren’t feeling the passion, find out what you can do to re-energise them.

 Ultimately, there’s no guaranteed way to keep everyone happy, but being as planned, open and honest as you can be definitely helps. Unless it’s a three way squabble over who gets to use the hairbrush first on a morning. When that happens, my best advice is; run and hide… pre-teen girls are scary!