The entire cycle of moving from business owner to business seller can be littered with landmines. There are likely a dozen new relationships engaged in a process and trying to filter who to trust and who needs to show you more trustworthiness requires time and reps.  

Trust and respect are cornerstones to gaining comfort in the upcoming chapter of your life’s work. When you peel trust and respect back more it’s about the building blocks of character and competence. Depending on who’s stats you want to embrace, somewhere between 50% – 80% of all acquisitions fail. It’ll take some digging to unearth the context and how relative those numbers are to your situation – size of the acquisition, industry, theme of the target and of the acquirer and why merge anyway. Yet, one of the takeaways you’ll grab is many execs dislike discussing the soft’n fluffy term of culture. However, more and more PE groups, investors and strategics are succumbing to the idea, ‘there might be something to this culture thing’ with so many firms including ‘some manner’ of culture diligence in their run up to an LOI.

We have been in the culture space since the mid-90’s when C-suite looked at Doug and I as if we were from Mars. We will perform some level of formal or informal culture assessment on your business. The goal is to learn how your team is expected to get business done so we know how to marry up the best possible buyers for your business. Why? Because they act, behave and communicate similarly to your business which stacks the chips in your favor.

What was once common sense isn’t common anymore. What’s common sense for a Ford mechanic isn’t common sense for a Jaguar mechanic… are you tracking? One of the questions I ask on Day One integrations is tell me the first thing that enters your mind when I say the word “bunny rabbit”. It’s never failed in nearly 30 years – out of a room of 30 people, I’ll get 25 answers! If we can’t agree on the same word or phrase with bunny rabbit, how are we expected to communicate AND comprehend with one another when we hear and listen to different things and have different takeaways with something far more complex?

How are we expected to communicate effectively and solve problems if we interpret the simplest thing incorrectly?

Some of you will cash out and retire, and some of you will stick around for a second bite of the apple. Communication is what separated us from the dinosaurs. Let’s put it in hard facts for you as a seller. If you truly want to know how your buyer will treat you and your people post-close, ask your colleagues how they were treated when they had a bad quarter or two or a year. Understand, I’m not bashing buyers in any manner. It’s no different if you were the acquirer and the target had some hesitancy with you.

True habits, behaviors and beliefs arise under stress, NOT when things are shiny and new! Make the call. Ask the question! Look in the mirror, chances are you’re no different either.  One of the reasons many acquisitions, mergers, marriages, professional sports trades, etc. fail can be linked to an environment (the climate) of mistrust, lack of respect, fear of recrimination and an overwhelming degree of miscommunication. Whatever “bunny rabbit” you want to call it, they don’t play nice in the sandbox!

I had a great conversation with a well-seasoned CEO who lived on both sides of the deal table over 40 years and shared invaluable insights. “I can give you many examples with passion backed up by data where the buyer kept quiet about the future of the combined entity. And, I can give you many examples with passion backed up by data where the buyer shared everything about the direction of the combined entity. Just as many were successful, and just as many were total failures on both sides of the message. The takeaway, as THE leader, is you must communicate in a natural manner that works for you. However, three themes rose to the surface of the successful ones – be honest, be transparent and don’t bullshit the audience. Regardless of what you say, the message the employee population will receive and discuss at the watercooler will be about HOW you delivered the message. YOU are on trial! Whether you realize it or not, they [the employees] will go to a deep, dark, ugly place where you couldn’t possibly imagine and create a narrative so bleak and disgusting.”

When there is an environment of negative juju, every transaction, every communication, every interaction, every strategy, every decision point brings speed down and costs up.  By contrast, individuals and organizations who have earned the right to advance and operate within a high trust environment, experience the opposite effect of this drain – a performance multiplier is realized, enabling them to succeed in their communications, interactions, and decisions, and to move with effortless speed resulting in better than expected outcomes.

How Do Leaders Build Trust?

Trust is confidence born of two dimensions: character and competence. Character includes your integrity, motive, and intent with people. Competence includes your capabilities, skills, results, and track record. Both dimensions are vital. Part of building trust is understanding, clarifying succinctly in a clear, concise and compelling manner – what the organization wants and what you can offer them.  As the leader, the identity of your business is to extend it through your entire organization based upon the behaviors you model, and the behaviors exhibited within the organization.

It should go without saying ethics is seamless within your moral compass, but alas, my rose-colored glasses now have bifocals.  Given the decades of issue-skirting, corner-cutting and downright lying and deceit in our society, the character side of trust can easily erode. Maybe you noticed we lead with a Culture of Integrity. At this stage in our lives, we have neither time nor energy to remotely engage in any buyer or seller who knowingly cuts corners. You’ll demonstrate it by example as a natural part of who you are. It’s not forced nor created. When a leader’s credibility and reputation are high, it enables them to establish trust fast – remember what we mentioned earlier – speed goes up, cost goes down.

The Only Person Who Likes Change is a Wet Baby

It’s critical to know your intent as a leader and to communicate it clearly. Some leaders lack understanding and how vital communicating intent is in influencing others with impact. Many of us have listened intently to great speeches delivered by well-oiled orators. However, if the intent of the plans aren’t aligned with effectively honest communications, the people may be impressed initially, yet deep down inside, they will not believe in those plans or more importantly act on them. When the direction appears to be unclear and uncertain being transparent is more powerful than slick rhetoric.  Any CEO or leader worth their salt understands the three C’s – change, clarity and confidence.

Change is a constant, it’s everywhere and no one likes it…besides that screaming kid. How do you encourage your team to be comfortable with being uncomfortable? It takes clarity. It’s shedding light on a direction, a decision, a plan, a strategy to accomplish a worthwhile goal or vision. When there’s clarity of direction and trust lives in the room, people will begin to feel more comfortable than they did previously. Why? Because of the character and competence that builds trust and respect. When there’s clarity regarding change(s), the leader’s job is to instill confidence in those people who may not be as confident in the message or in themselves to execute properly.

I can’t make you trust me either! What I and our team can do is consistently demonstrate our character and competence in everything we do. When the time comes to seriously consider moving from your life’s work, give us a call or send an email for a no obligation assessment.

…the conversation continues…