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This is How Much Leadership Affects Your M&A Success


A lot of factors influence the success of a merger and acquisition (M&A), but most analyses focus on the economic aspects of the deal. Granted, the financial piece comprises a large portion of the equation and dictates the manner in which the whole transaction unfolds. However, there are still people responsible for calculating and managing those numbers, and thus the knowledge, skills, and expertise of those individuals also have a significant effect. Of course, business acumen can only take one so far in life, as understanding people and having social intelligence are also extremely important. Real and continued success in the business world is dependent, in large part, on the leadership team that steers the ship, not just the dollars generated. Leadership obviously encompasses a lot of different things, but there are certain areas in which leaders must excel to get a complicated  M&A deal done. Here are the leadership principles that will foster success:

Leading Ideas

Great leaders tend to be creative problem solvers and have a lot of interesting ideas. In some industries, these superstars are known as thought leaders because they devote substantial time to examining complex issues and crafting savvy solutions. But, in addition to setting forth their own ideas for how things should be done, strong leaders are open to and even encourage the sharing of ideas from their colleagues and subordinates. Closing an M&A deal requires the hard work of countless individuals and failing to take into account the opinions and concerns of others will undoubtedly thwart progress forward. In many ways, to lead is to listen, as one person simply cannot man the many controls of an entire enterprise. Thus, for companies involved in M&A, or those hoping to be so at some point, there has to be open-minded and welcoming folks at the helm.

Leading Relationships

This facet of leadership focuses on a leader's relationship with external parties whose participation is crucial to sealing the deal. Clearly, this includes the other company seeking to merge or acquire, as well as its leadership team and staff. And, there are also the firms and professionals that facilitate the deal, like the lawyers, bankers, and accountants. Regardless of what each participant has at stake, a deal cannot close without the input and cooperation of everyone involved. One difficult member of the leadership team can easily get in the way of things if s/he has an ego or refuses to compromise on certain matters. There will no doubt be differences of opinion and perhaps even outright contentious disagreements, but it is merely a willingness on each leader's part to find common ground that will prevent the situation from becoming completely derailed.

Leading People

This is similar to leading relationships, but it is focused on employee engagement internally. During any deal, there will be increased expectations and demands on virtually everyone in the company. Snarky leaders may assume that people will perform because it is a part of their roles and responsibilities. However, smart leaders know that genuine engagement derives from feeling valued and respected. And, this can't just be an occasional display of gratitude when employees need to bring their "A" game because there is a big deal at stake. Ensuring employee engagement has to be a priority from the early stage of any business and continue to be an ongoing endeavor. Leaders must invest as much effort into their employees, if not more, as their employees are investing into the business. After all, it is these reciprocal investments that will lead a company to high value M&A deals in the first place.

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