When we think about mergers and acquisitions, we usually tend to focus on the numbers. However, we're fooling ourselves if we think that's all there is to it.
By David Lykken
Special to MPA
When we think about mergers and acquisitions, we usually tend to focus on the numbers. We're interested in valuations and the financial risks of buying another organization or selling ours. Of course, doing due diligence on the data and metrics is absolutely essential to navigating through an M&A. But, we're fooling ourselves if we think that's all there is to it.
Emotionally, mergers and acquisitions can be messy. If you're selling your company, it isn't just numbers to you--it's your baby. In doing their due diligence, buyers may ask you questions that seem critical or offensive. It can be easy to become defensive and emotionally distraught throughout the M&A process. So, how do you keep it all together and look at the transaction as objectively as possible?
The secret, as with many things, is clarity. Both parties involved in the transaction need to have clear expectations set for one another. As much as is possible, there needs to be a sense of transparency and open lines of communication. Without trust, emotions are bound to get out of hand. And, without clarity, you cannot have trust.
When each party thoroughly understands the intentions and motivations of the other, it simply becomes easier to get along. So, as you're going through the M&A process, make sure you have clarity on everything. Make sure you understand what is expected of you--and make sure the other party understands what you expect of them. Clarity, like nothing else, can help you survive that emotional roller coaster and lead you out on the other side much better off than you were before.
A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals . Recently, he started producing a one-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across the United States.
