In typical transactions, the details and data tend to rule the day — and dominate participants’ time and attention. The smoothest deals, however, have one common denominator. They are driven by a thoughtful, reasoned approach to cohesive communication that will resonate with all those touched by the transaction.
This is a critical part of the dealmaking process, as history shows that on the other side of any closed deal, the parties affected directly or on the periphery are likely to ask one question: What does this mean for me (or us)?
The audiences are varied, and each will see outcomes from a different vantage point. The transaction must be explained to shareholders and stakeholders, who hold a specific financial interest in the transaction; employees and associates affected either to the positive or to the negative; communities or external constituencies that could feel the impact downstream from a deal; legislators or legal parties who may have oversight or influence; customers and potential customers, who will have a singular perspective on precise implications for themselves; and media, which might be wondering about ripple impacts for everyone.
Social media is another factor as an amplifier and platform for discussion or opinion that is not always carefully considered. If you don’t appropriately think through or clarify your communications strategy, it can lead to disconnects, lack of understanding and, potentially, loss of valuation or realized value. Bad news, or even misinterpreted information, can flare up or go viral in minutes. The consequences can have long-term downside that, by contrast, can take years to repair or mitigate.
Whether the deal involves a publicly traded entity or private enterprise, the concept of a communications platform should be on the table as early as possible. Consider simple, straightforward and explanatory messaging in anticipation of questions, timing, cadence, the cascade of messaging to various audiences and the roles of those who will be distributing or delivering the narrative. Clarity is key, and it is essential to think through all of the various channels of communication and how they can be leveraged.
What’s the downside to putting communications off to the side? In transactions involving public companies, there can be regulatory delays (currently playing out in the T-Mobile/Sprint transaction), while for either public or private deals, the inevitable integration process can be hampered because neither entity truly understands the future direction. Cost-savings or expected synergies can be delayed, customers can wind up confused or — worse yet — develop a negative disposition toward the deal. Ultimately, money is left on the table. No one involved in a transaction wants that to be the case.
This isn’t to say that anything proprietary or confidential should be fodder for discourse, as there are always details (especially in the case of future consolidation or restructuring) where prudency takes precedence. But there is a basic tenet when it comes to communications that should always be top of mind: Do you want to tell your story, or do you want others to tell it for you?
Chas D. Withers is CEO at Dix & Eaton Inc.