Tackling tough conversations during mergers
Nobody enjoys engaging in tough conversations – especially in the workplace.
Having to prompt an unpleasant conversation with colleagues or clients can feel awkward, emotionally draining and time-consuming, to say the least.
For business brokers, however, these tough conversations are vital to the success (or the pitfall) of one of their main focal points – mergers.
Dione Mauric from Advantage Business Sales and Valuations says if handled poorly, sensitive conversations can undermine a merger.
“Typically, the toughest conversations have to do with people,” says Mauric.
“The types of sensitive conversations and questions that I have seen undermine a merger are things like board representation, board selection, CEO selection and selecting the leadership team.
“The overall approach of the transaction needs to be agreed upon first, this can help clarify the direction of all of the above conversations.”
And if poorly handled conversations don’t completely undermine the merger process, it can create a dysfunctional business for your clients in the long term.
“Failing to address issues can lead to dysfunction, toxic work environments and weaken business value.
“Whether you are proving a business valuation or advising owners on the sale of their business, it’s essential that you tell your clients what they need to hear, not what they want to hear.”
So, what steps can business brokers put in place to avoid a tough conversation turning disastrous?
A clear strategy, transparency and tackling the difficult topics early, says Mauric.
“The process must be transparent, realistic and involve all areas of management if success is to be achieved.
“If tough topics are left to the late stages, both sides will have been working under their own assumptions.
“Significant delays may occur or even the entire merger may be stopped in its tracks due to the discovery of irreconcilable differences which had they been discussed at the beginning may have been avoided.”
Business brokers that take these measures are likely to achieve a successful and harmonious merger.
However, there will always be cultural differences or parties that have unrealistic expectations.
Mauric says keeping a calm composure is a good start to negating unrealistic expectations.
“Document a framework which outlines the merging companies integration plans,” says Mauric.
“Communicate with employees sharing what is going to change once the merger takes place, and why.
“Sometimes you just need to be blunt – being assertive is sometimes necessary when dealing with tough parties.
“But always remain constructive and respectful.”