Does it seem like all the cooperatives around you are engaged in merger or acquisition talks? The flagging farm economy and global competition has resulted in an increase in unions. The number of co-ops in the country has dropped from 6,445 to about 2,100 over the past four decades, and the pace of consolidation is accelerating.
Perhaps you are just beginning to talk with the CEO of another company or your board has scheduled its initial meeting to discuss the feasibility of joining forces. Now is the time to make a plan to communicate with your members, employees and the surrounding communities. It’s not a question of whether or not your informal or formal discussions with another co-op or company will get out—it’s a matter of when. That is why you need a plan that will advance the truth before the rumor mill kicks in.
That plan should involve:
The Schedule. Detail when you will communicate. Will you release a statement initially, telling the members and the general public you are involved in talks? Or will you wait until you have substantial evidence of benefit and are ready to schedule a member vote?
The Content. What will be the substance of your communication? Most importantly, how will you answer the members’ all-important question, “What is in it for me?”
Tell members early
Releasing as much truth as you can as soon as you can to members and the general public is to your advantage. It’ll help avoid potential negative facts being invented and passed around the coffee shop. For example, you don’t want someone to say: “I heard from Fred that the co-op is trying to sell out our good name and move our headquarters far, far away.” Instead, you want the banter to be the latest information you released: “This merger will improve agronomy services because a larger fleet will be able to move applicators from one part of our expanded market area to another—depending on the weather. Members will get faster service in the spring.”
Make them partners in the deal
The worst thing that can happen in co-op merger talks is for a member to look at the deal from an outsider’s perspective. In a private company, a shareholder who has received dividends over the years is much more likely to abide secrecy in merger negotiations than a co-op member. He or she has been told repeatedly, "You own and control the company.” Moreover, it is not just dividends that a co-op member is after. It is service and a fair price. The results of a merger are far more personal to a member who needs to feel like they are part of any deal. The earlier your members can “own” a proposed merger, the more likely they are to record an enthusiastic “yes” either by their patronage of an acquisition or by their vote to merge.
A co-op manager I worked with had a practice of making the members a partner to anything major that happened within the company, whether it was an expansion of facilities and services, a merger or an acquisition.
“Before we get started, I tell them what we’re going to do and why we are going to do it,” he said. “Then, after we’ve started, I tell them what we’re doing and remind them of why we’re doing it.” In doing so, this manager made the members feel like, “This is my project!” The expansion, merger or acquisition became an extension of what they were doing on their own farm or ranch—so they supported it.
What’s in it for me?
The bottom line of successful merger communication is to keep the question “What’s in it for me?” top of mind. A proposed union may save money by sharing the cost of certain fixed assets or spreading insurance premiums over a larger organization. It may provide greater buying power or a healthier market for the grain your cooperative handles. But if you fail to translate that into direct or indirect member benefits, the initiative may not succeed. Why? The members may not see a personal advantage in voting “yes” or in continuing to do business with the larger organization.
Before releasing any information on merger talks, scheduled votes or potential union dates, always ask, “Does this information answer the ‘What’s in it for me?’ question our members are sure to ask?’”
Senior journalist Dave Aeilts has been helping VistaComm clients with merger and acquisition communications for more than two decades. Be sure to visit the VistaComm blog site again for Part 2 of Dave’s 3-part series on merger communication, “Don’t forget employees.” If your organization needs help communicating change, or even starting a communication program, put our expertise to work for you.
“What’s in It For Me?” – Part 1 of a 3-Part Series on Merger Communications posted first on http://vistacomm.blogspot.com/