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M&A Internal Comms: SABMiller case study
- 1. Mergers and acquisitions How internal comms can steady the business during uncertainty and change Christina Mills 1
- 2. Global beer and beverage giant 2
- 3. © SABMiller 2016 SABMiller – who we were We were the world’s second largest brewer ….in some of the world's fastest-growing economies ……with 69,000 employees in more than 80 countries Soft drinks volume growth bottles of SABMiller beer enjoyed around the world every minute of every day in our portfolio We produced some of the world’s most-loved beers 8% 140,000+ >200brands
- 4. © SABMiller 2016 A global brewer, based on local insights Latin America Africa Asia Pacific Europe NorthAmerica Key Significant business with production operations Associates Selling operations and major export markets
- 5. SABMiller plc Page 5 Our purpose We bring refreshment and sociability, improve livelihoods and help build communities
- 6. AB InBev Recommended Offer for SABMiller 6
- 7. © SABMiller 2016 How the initial approach played out 7 News of AB InBev approach breaks SABMiller rejects bids of £38, £40 and £42 a share SABMiller brings forward strong trading update SABMiller says it would reject offer of £42.15 SABMiller announces doubling of cost savings target Key weekend of negotiations SABMiller rejects £43.50 SABMiller recommends offer of £44 – a 50% premium 16 Sept Sept – Oct 6 Oct 7 Oct 9 Oct 10-11 Oct 12 Oct 13 Oct An intense month of offers, rejections and eventual recommendation
- 8. © SABMiller 2016 • 141 page document in complex legal language US business sale agreed Uncertainty over jobs – particularly in global HQ and regional offices Severance terms announced • Widespread global media coverage • Full day of internal comms Internal announcements, FAQ, HR guide for employees, links Leadership calls and town halls Recommended offer terms agreed 11 November 8
- 9. What did we learn? 9
- 10. © SABMiller 2016 What did we learn at this point? ‘What does this mean for me?’ Segment audiences Get the process rightExplain - 10 Be careful. Think aheadEmpathise
- 11. Now what? Resetting internal comms strategy
- 12. © SABMiller 2016 A clear strategy, in line with business objectives 12 Focus on business performance & managing uncertainty Regular sentiment checks Support leaders’ effectiveness The right channels and content
- 13. Getting leaders on board
- 14. © SABMiller 2016 How to get buy-in from the top 14 Start with CEO and Excom Link to business priorities Work as a team with HRUse data
- 15. © SABMiller 2016 Offsite workshops CEO leadership calls Small group briefings - Cascade materials Sentiment survey results Online news & resources Galvanising senior leaders
- 16. SABMiller plc Page 16 The Source: global channel for leaders
- 17. © SABMiller 2016 The Source: breaking news and archive
- 19. © SABMiller 2016 Live employee events and meetings CEO global town hall CEO on the road town halls Leader team meetingsCEO team meetings - 19 HR sessionsAB InBev CEO town halls
- 20. © SABMiller 2016 Critical elements Timing Adaptation NetworkPlanning - 20 ToneAlignment
- 21. What did we learn? 21
- 22. © SABMiller 2016 What did we learn at this point? Don’t leave a vacuum Listening works Some leaders need a push - 22 Don’t be complacent Repeat, repeat,repeat
- 23. Planning for change of control 23
- 24. Comms priorities 24 Celebrating Day One planning Transaction news Integration updates - People processes Getting to know AB InBev
- 25. © SABMiller 2016 CEO Alan Clark has his picture taken in the photobooth Morale-boosting in HQ
- 26. Final outcomes
- 27. © SABMiller 2016 People respond to good communication • In the pulse survey in February, after responding to listening in January, 68% of staff agreed that they felt well informed about how the AB InBev deal was progressing; 78% said their manager was good at communicating what is happening • In the March/April Survey 91% said they felt well informed about how the AB InBev deal was progressing; 82% said their manager was good at communicating what is happening 68% 91% I feel well informed about how the AB InBev deal is progressing 77% 82% My manager is good at communicating what is happening April 2016 February 2016 February 2016 April 2016
- 28. © SABMiller 2016 ….and the results are clear in feedback & performance January ‘Anxiety…..demand for more communications, leadership visibility, support and more dialogue’ March ‘Communication has improved, it is more frequent and open. More focus on what the future will look like beyond change of control.’ August ‘Extraordinarily good job in comms. We want to be told what you can tell us as clearly as you can and you went out of your way to deliver on that.’ October CEO received a standing ovation at final HQ town hall, despite people knowing they were likely to be out of a job Business Performance improved In the financial year to March 2016: • Revenue up 5% (7% in the final quarter) • Volume growth of 2% (4% in the final quarter) The CEO wrote in his blog: ‘I think that this is remarkable. I am proud of what the employees of SABMiller have achieved, and I hope that you are too.’
- 29. Thank you 29
Editor's Notes
- SABMiller is in the beer and soft drinks business, bringing refreshment and sociability to millions of people all over the world. We do business in a way that improves livelihoods and helps build communities. We are passionate about brewing and have a long tradition of craftsmanship, making superb beer from high quality natural ingredients. We are local beer experts with more than 200 local beers from which we have carefully selected and nurtured a range of special regional and global brands. We have around 69,000 employees in more than 80 countries, from Australia to Zambia, Colombia to the Czech Republic and South Africa to the USA. Every minute of every day, more than 140,000 bottles of SABMiller beer are sold around the world.
- As a global brewer our success and purpose are built on a clear and consistent belief that the value of beer is local We make beers that people love by truly understanding local tastes Our beers are part of national identities and culture That’s why we believe the value of beer is local In Tanzania, we are a Tanzanian beer company In Colombia we are Colombians And in Australia we are firmly Aussies
- The first part is about the quality of our products and the connection between those brands and the consumers who enjoy them We believe we bring refreshment and revitalisation Sociability refers to how we connect people together locally The second part is about our belief in improving livelihoods and helping build communities where we operate – we believe in doing business the right way
- News broke in September 2015 that AB InBev, the biggest global brewer and our number one rival, was interested in acquiring SABMiller. Our most appropriate defensive strategy was to highlight SABMiller’s key operational strengths, rather than directly attacking AB InBev. This played well from an internal perspective as it promoted a sense of pride among employees and prevented any unnecessary feeling of animosity towards the potential new business owner. Internal and external communications were aligned from day one.
- In November 2015, the Board recommended shareholders accept AB InBev’s latest offer. Timing Due to the nature and size of the deal (the fourth-largest global acquisition in history, and the largest of a UK-listed company), it was recognised that the process would take some time. Timing was very uncertain due to the multiple regulatory approval processes but completion was expected in the second half of 2016 – around a year from announcement. Different impacts AB InBev wanted to proactively address potential regulatory considerations. Initially is said it planned to sell on the businesses in the US and China, and eventually it had to also divest the European business. It would largely keep the businesses in Africa, Latin America and Asia. At the outset it was stated there would be significant overlap between SABMiller and AB InBev at head office and regional HQ level – Woking/London v New York/Belgium. These factors means the impact of the acquisition will vary significantly according to the location and role of the employee. Maintaining morale and motivation as the deal progresses was an absolute top priority for SABMiller. Detailed announcement including severance terms An agreement on the terms of a recommended acquisition of SABMiller by AB InBev was announced in November 2015, with completion expected in the second half of 2016. From the date of the initial announcement of the proposed deal, our primary concern in the internal communication team was that our employees: had as much information as possible about what it might mean for them knew where to go to find out more and to have their questions answered had opportunities to share their feelings and sentiment were able to continue to perform as we remained a competitor business We were determined that our people heard any news on the deal from us first (or as near as possible given stock exchange and legal restrictions). The team meticulously co-ordinated all-deal related comms, often at extremely short notice, so that as soon as an announcement was released to the media it was simultaneously communicated to our employees through our global comms network.
- Start with the employee perspective – ‘what does this mean for me?’ Explain - complicated information the process and timing – what happens next what you don’t know or can’t tell people where to find more information how to ask a question why the market hears first, and that there are legal restrictions in place in an Offer Period Empathise: use emotion and empathy – acknowledge uncertainty and anxiety Speak and write in plain English Use multiple channels Align internal and external communication Tight version control Everything legally approved Segment audiences: leaders, employees by location or function – use the info that’s relevant Brief leaders verbally and give them materials Set up and use a tight internal comms network Be careful: Don’t promise what you can’t deliver Don’t take a position you may later have to reverse (demonising the bidder if you end up recommending the deal)
- From early on in the transaction process, we took steps to ensure that we put robust planning in place to ensure that we were in the best shape to help the business perform during the period of uncertainty, and look after our people. As part of an overall business review of activity to ‘Stop, Start, Continue’, we revised our communication plans accordingly. We stopped some planned activity such as our Global Leadership Conference (five year strategy) and diverted the available resources towards increased business-as-usual and deal comms activity After the recommended offer was announced, we convened a meeting of our Global Communicator Network, (which includes internal communicators from our regions), to revise our internal communication strategy. We focused on four key priorities (read): Maintain focus on business performance, help manage uncertainty and prepare people for the journey ahead through excellent employee engagement Establish an Internal Communications infrastructure and capability that gathers regular, detailed insights into sentiment and minimises risk and disruption. Deploy internal communication channels and content that effectively supports both global and Corporate internal communications Support and equip leaders to lead positively through uncertainty and deliver excellent performance Ensuring global employees: Were adequately informed about the progress of the deal contemporaneously with external communication Knew where to access key people related information – the ‘what does it mean for me?’ Had an opportunity to express how they felt about the situation and to ask the questions they did not want to ask directly of management Still received high quality business as usual communication on e.g financial results and business performance
- CEO and Excom need to lead this and walk the talk – how to get them on board: Ensure comms strategy meets the needs of the business strategy (maintain performance and morale) Joined up with HR – employee engagement, other initatives – people plans, training, redundancy, planning for life outside; We increased our collaboration with HR, particularly on the engagement elements of the internal comms plan. A joint calendar of events and interventions was developed and was discussed at a weekly meeting between HR and Internal Comms Comms automatically goes up the agenda in M&A situations – sometimes the focus is too external. At SABMiller we spent more time on internal – probably 1/3 and 2/3. What do you already have in terms of channels and can you enhance rather than reinvent? Use data: drivers of employee engagement during M&A (leadership visibility rises to third), stats on success/failure of M&A due to buy in to change, employee surveys
- We ensured that our leadership was well equipped to answer the questions that we knew would be asked of them. Specific briefings were held for our leaders and HR Business Partners to give them the in-depth answers to people-related questions and to allow them to explore the answers in full The agenda for our MD Forum, where our country MDs and Executive Committee work on business issues together, was amended in response to the deal,. The MDs were given full detail on the transaction, heard directly from the CEO of the acquiring business, and had the space to discuss how they felt and to agree how they would communicate to their teams. We held our first ever Corporate Leaders Forum which brought together the senior HQ managers to experience new techniques in how to lead people through extensive change, and how to work better as a leadership team In Corporate, specific briefings were held for our leaders and HR Business Partners to give them the in-depth answers to people-related questions and to allow them to explore the answers in full We increased our frequency of CEO-led Global Leadership Update calls from quarterly to monthly, and mandated the use of cascade materials. We also introduced a Corporate Leaders’ Forum for the first time. A programme to gather global employee sentiment was quickly mobilised. We knew that we wanted to gather quantitative data from all colleagues, but that we wanted to supplement that with a richer picture from qualitative data. We had a monthly programme which alternated a pulse survey with a small group listening exercise. Together these enabled us to spot what was working well and where there were gaps – enabling us to report back to the Board and Executive Committee and suggest remedial actions where necessary.
- Only truly global communication channel in SABMiller, reaching the critical audience – senior leadership and management. Complement to, not a substitute for, verbal communication Go-to place for all written material. A dedicated ‘deal page’ added to the regular communications on performance, shared learning, and achievement It incorporated all deal related communication, including a comprehensive HR-related Q&A and links to the full, official deal documents as well as approved statements for customers and partners. We ensured that our leadership was well-equipped to answer the questions that we knew would be asked of them. To help in this, we developed a specific Leadership Toolkit, hosted on The Source, to support leaders at all levels in how to Lead Themselves, Lead Their Teams and Remain Resilient
- We also extended access to all staff in the Corporate centre (likely to be heavily impacted by the deal). This included more junior staff. In April 2016 The Source reached almost 8,500 people in the company. We offered people the opportunity to raise questions via The Source. We tripled the frequency of regular communications through The Source and pushed latest news out by email with links. We ran a readership survey to understand how The Source performs compared to expectations and seeking ideas on how the site can be improved.
- We held our first ever global townhall in which colleagues in all our regions were connected to hear the latest on the deal directly from CEO Alan Clark. They were able to ask questions in real time and to feel connected to colleagues across the globe. We arranged, in co-ordination with AB InBev, a series of global townhalls with AB InBev CEO Carlos Brito to ensure that staff had a chance to hear plans for the proposed new company from him directly. Key business as usual activity, important in its own right, was identified as additional opportunity to update staff on the deal and to bring them together to help support them and maintain morale Leaders stepped up their team briefings, equipped with the right skills and materials Our CEO led a series of meetings every couple of months for each corporate function, supported by the function head and HR. This has allowed people to hear direct from the CEO in a group of their peers on key issues relating to the transaction and business performance Results of the pulse surveys and listening groups are presented at these meetings, with a detailed look at the specific function’s results, and discussion of action plans Employees can raise questions at the time or anonymously in advance, which are answered as extensively and transparently as possible Senior leaders have shared their feelings and emotions around the changes in the business, from being authentic about the sense of loss to celebrating success
- The nature of the deal means that different regions, markets and functions are potentially affected very differently. Our communication strategy needed to ensure consistency of key messages and timing, but with flexibility for local audiences. Employee Pulse surveys and sentiment feedback showed that: The audiences most keenly interested in transaction and convergence information were leaders (top 6000) and global function employees People were particularly focused on understanding the transaction timetable and want to know when they will hear about leadership appointments, structures and the HR support available to them People were hungry for more generic information about AB InBev and their approach to doing business
- There was a flurry of communications between the deal first being a possibility in September, and Christmas. Things were quieter in January, and although this was a period of only a few weeks, this felt magnified and added to employee uncertainty. The communication cascade was not perfect and people said there is a permafrost layer through which comms did not pass – the CEO redoubled his efforts in pushing through the cascade and we are monitoring its effectiveness Using differences in tone and style can be questioned. Our deal communications from the CEO were open and transparent, but somewhat formal in nature due to the legal approvals needed. When our CEO wrote a blog at Christmas time in a much more open and emotional way than usual, people loved it, but questioned whether he wrote it himself! Our people give us the best ideas – listening to our employees, acting on their feedback and being able to show them how we have responded, and admitting where we can do better, has won us their trust and respect People need to hear the message multiple times in multiple ways for them to get it. And it’s a good reminder of why the internal communications function exists – it is to help our leaders to lead better, to have our employee voices heard, and to improve trust and engagement, whatever the business is going though.
- Transaction and convergence milestones NewCo structure, location & leadership team appointments People processes – including talent, performance, comp & ben, outplacement Celebrating SABMiller and its legacy “Getting to know AB InBev”: transmitting prepared, non-sensitive information on behalf of AB InBev via our internal channels after pre-conditions are met Work with AB InBev to advise on global, regional and local execution of their Day One internal communications plan Day One procedures and practicalities: “what to do on your first day with NewCo”
- The Corporate Intranet, OnTap, was already due to be refreshed. We took the opportunity of the re-launch to increase employee engagement and raise awareness of this key tool. A poster campaign using our own staff as models raised awareness of the coming intranet We set up a photobooth in our canteen to allow people to take a picture for their intranet profile. (and also to take some fun team pictures too). Our CEO also got in on the act (pictured) A key component of the new intranet is our Yammer social network so we launched our ‘Yammer Challenge’ with people set a range of Yammer tasks over a period of two weeks We have introduced new features to our weekly newsletter for HQ employees. Recognising that in times of stress, colleagues rely more closely on each other, we have decided to feature the people who work in Corporate more often. ‘Leading in Corporate’ is a weekly interview with one of the leaders, talking about their leadership style and how the deal is affecting them ’60 seconds with…’ features one of our non-executive employees, often well known in the business but someone unlikely to be regularly featured in other communications Both features are consistently the top read stories in our newsletter with an average of 68% open rate. One of the key aims of the Internal Communication team has been to maintain morale and motivation as much as possible during this unsettling period. We are lucky in that we not only have a fantastic product to engage people in (and have a free bar!), but our employees are passionate about beer and brewing and want to talk about it (and drink it) as often as possible. Our purpose as an organisation is to ‘Bring refreshment and sociability….’ and so we have maintained a series of events to reflect our purpose and remind people of why they come to work. These have included: Innovation Fair – an opportunity for people in corporate to try the latest beer innovations from around the world that they would not normally get to experience Brew Off – our internal brewing competition. Teams set the challenge of brewing their own beer under the supervision of our brewing consultants, then marketing it to their colleagues to see who can come up with a winning product Our London-based Brewery, Meantime brought their tank fresh beer and virtual reality tour to the Woking office for people to try We launched a new email signature that people can customise with their favourite SABMiller beer Celebration campaign – film, events, memories board, farewell parties, poster, book