This question came up at a roundtable meeting last month: “I’m thinking about selling the company. When should I tell my employees?”
You may have been thinking about your exit strategy for years and have dreamed and planned for how it will affect your personal and professional life. But, what about your employees? As a sympathetic owner, you want to help your workers ease the transition. But planning and timing are essential: here are some issues to consider.
If you tell employees about a sale too early you won’t be able to answer their questions. Mishandling communication creates uncertainty among employees and defections by managers. It can damage relationships with key customers as well. All of this will have a detrimental impact on the business and may undermine the deal.
It may be necessary to bring a few key employees in on your decision early in the negotiations so they can provide information to prospective buyers. Choose these people carefully and emphasize the information is confidential until you tell them otherwise Delay the announcement to the rest of your employees until all the contingencies have been met and the deal has been made or at the very least, is in the final stage.
When you finally do break the news, be upbeat and honest. Stress that the ownership transition is good for everyone and you have full confidence that they’ll do right by the new owner (and vice versa if possible). Be prepared with information on what the new owners expect and how the transition will be implemented. If the new owners share your values explain that to the staff. Be prepared to answer questions as they’ll have many concerns about how the new ownership will impact them.
Don’t be like the owner whose fatal mistake cost him dearly; He informed all his employees of his decision to sell the day his company was listed with a broker. Having no idea what the future would hold, key employees jumped ship, taking valuable experience and customers with them. The value of his company went down significantly. It’s an understatement to say he wished he had told his employees “after the fact.”
The road is easier together,