The Importance of Trust in The Success of M&A Deals
In all business relationships, miscommunication can occur and M&A is no exception. A 2014 report called M&A Communication by PWC emphasizes that building and maintaining trust among key stakeholders of both the companies through strategic communication is important for transparency and successful M&A.
Why is Trust an Important Factor?
“Trust is the lubrication that makes it possible for organizations to work.” –Warren Bennis
During the early stage of M&As, the trust factor between the acquirer and the target company is usually low. This is due to high levels of risk factors, ambiguity and uncertainty. Each party wants to know the other and get an accurate view in order to make the relationship viable. Moreover, each stakeholder has their unique concerns. Unanswered queries always result in speculations regarding the transaction, which further escalates the confusion and mistrust. In such cases, trust-building measures must be taken in order to turn the M&A process a smooth affair. Moreover, a greater level of trust makes both the parties willing to take greater risks.
Trust-Building Measures in M&A
1. Communicate Openly
The first step is to build a communications team under focused leadership. This team will arrange sessions with the key stakeholders of both the organizations and listen to their concerns. They’ll analyze the concerns and share the findings with you. You can address these concerns via emails or at town hall meetings. This is an effective trust-building measure that’ll stabilize the uncertainty, generate support and further the M&A process.
2. Build Relationships
As an acquirer, build a good rapport with the other party. Know their leaders personally and interact with them openly. Let them demonstrate their knowledge and expertise. This will boost their confidence in you, thus building trust.
Are you looking for trustworthy and experienced mergers and acquisitions consultants? If yes, then get in touch with us. Our expert consultants come with years of experience in solving the trickiest M&A challenges. Call us at 800-913-5467.