The Hidden M&A Risk: Trust, Perception, Reputation
Mergers and acquisitions are routinely framed as exercises in financial engineering, operational consolidation or strategic realignment. Yet despite decades of accumulated expertise and countless integration playbooks, the industry still grapples with a painful truth: most deals fail to deliver their intended value. Deloitte, KPMG and Harvard Business Review continue to report failure rates between 70 and 90 per cent. The commercial explanations are familiar, but they mask the deeper issue. Deals fail not because the numbers change but because trust collapses, perception is mishandled, and reputational risk is overlooked until it is too late.
This is not a communications challenge in the narrow corporate sense. It is a strategic problem that begins long before the press release. The most decisive moments in M&A unfold privately, in rooms and conversations that shape expectations, manage emotion, and align political and commercial interests behind the scenes. The organisations that succeed are those that accept that perception is a form of due diligence and that strategic engagement is a core leadership responsibility from the earliest stage.
Too many leaders still rely on the hope that internal memos, polished announcements or a confident Day One narrative will carry the weight of expectation. They won’t. In reality, private communications are the primary mechanism for de-risking a deal, because it is in private that fears surface, alliances form, and early interpretations take hold. Once perception has set, it is extremely difficult to reshape.
Your draft identifies this perfectly: trust, perception and reputation must sit at the centre of any transaction, not on the periphery. They are not soft factors. They determine whether a deal will be welcomed, challenged, scrutinised, or quietly resisted.
Perception Risk: The Critical Factor Deals Ignore
Financial, legal and operational risks are measurable. Perception risk isn’t, yet it can erase value faster than any technical error. A single speculative rumour about job losses can trigger talent flight. A nationalistic narrative can politicise a deal across jurisdictions. A nervous supplier may begin to adjust production or pricing. These reactions often happen before leadership is even aware that a problem exists.
Perception risk is powerful because it is emotional. It is shaped by fear, self-protection and cultural norms. It spreads faster than verified information, and once embedded, it drives behaviour that materially affects value. By the time leaders hear concerns formally, the narrative usually has already moved on.
This is why the space between signing and execution is so dangerous. Without private positioning, anxiety fills the vacuum. What looks like a strategic advantage to leadership can feel like a loss, threat, or identity change to others. That divergence, if unmanaged, is where deals begin to fracture.
M&A is often treated as a rational financial exercise. It is, in reality, a political, emotional and reputational event.
Why Public Communications Always Arrive Too Late
The visible elements of M&A communications still dominate the standard playbook: the Day One announcement, the investor call, the employee Q&A. These matter, but they are almost always reactive. By the time any public communication lands, most key stakeholders have already formed an early judgment, often shaped by private whispers, internal speculation or external commentary.
Public communications can frame a story. Private communications determine whether that story is believed.
Three recurring blind spots illustrate the challenge:
Optimism bias: Leaders focus on synergies, ambition and opportunity. When difficult realities are downplayed or ignored, audiences interpret this as spin and trust erodes.
Narrow stakeholder mapping: Employees and shareholders dominate the traditional plan, but modern deals live or die through the sentiments of regulators, political actors, supply chain principals, local influencers, NGOs and specialist media. If they are not engaged early, they become unexpected centres of resistance.
The assumption of rationality: Communications teams often expect stakeholders to process information through logic. They rarely do. M&A triggers insecurity, questions of identity and cultural sensitivities. Emotion always moves first.
McKinsey famously described communications as ‘the glue’ in M&A. Yet glue only works when the surfaces are prepared. If private engagement has not already addressed tension and misalignment, there is nothing for the glue to bind to.
Private Engagement: The Real Foundation of Deal Stability
Private communications are not discreet conversations or side notes to the core deal. They are a structured strategy of intelligence, influence and reassurance designed to steady the entire stakeholder ecosystem long before the public narrative appears.
Effective private engagement begins with building an inner circle of trusted internal and external voices. This group provides candid feedback, cultural and political insight, and identifies friction points that formal governance structures can obscure. Their input becomes the earliest warning system for risk.
Alongside this sits the shadow influence map, which recognises that formal hierarchies rarely reflect where true authority sits. Influence travels through informal networks, respected subject experts, loyal teams and individuals who shape internal narratives. Understanding who people will call first when uncertainty arises is critical. These individuals must be engaged long before employees hear anything publicly.
A third pillar is quiet regulator engagement. Regulators across Europe, North America and Asia now interpret M&A through lenses far broader than competition law. They consider national interest, industrial strategy, data sovereignty, political sentiment and technology capability. Leaders who wait for formal engagement quickly find themselves on the defensive. Those who engage early and privately build credibility and minimise surprises.
Private engagement also needs to extend to supply chains, where anxiety can rapidly lead to operational disruption. A simple reassurance to a key supplier that volume will remain stable, or that payment terms will not change, can prevent far-reaching consequences. In cross-border or multi-region deals, local communities and regional leaders hold unspoken veto power through social licence. Their sentiment needs careful management through respectful, early engagement that signals commitment, not extraction.
This is not about oversharing or revealing commercially sensitive information. It is about sequencing. Private engagement, conducted lawfully and strategically, is the first line of defence against destabilisation.
Culture: The Most Underrated Vector for M&A Failure
International culture is often treated as a soft factor, captured in integration workshops or post-close HR materials. This is a huge mistake. Culture determines how decisions are made, how conflict is addressed, how authority is perceived and how trust is built, in your home market as well as new international locations. When two organisations from different cultural environments merge, these factors collide. Perceptions from different cultures influence the potential success or failure of a deal.
Cultural due diligence must sit alongside financial and legal diligence. Leaders need to understand how teams communicate across borders, how hierarchy is interpreted, what risk appetite looks like in different regions, and where pace mismatches will cause friction. Without this insight, integration plans that seem logical on paper will fail in practice. In fact, ignoring culture, keeps an unnecessary risk on the deal table.
Cultural fluency is not about adopting a universal style. It is about adapting messaging, tone, sequencing, level of detail, and expectations, to ensure that communication signals stability, respect and clarity. Getting this wrong leads to delayed decisions, conflict between leadership teams and the silent loss of top talent.
Geopolitics: The New Arena Leaders Must Navigate
Today’s M&A landscape is inseparable from geopolitics, especially in the growing multipolar environment we are moving towards. Governments increasingly define technology, data, AI, energy and infrastructure deals as matters of national security. This transforms the communications environment from corporate to political.
A Franco–Japanese merger may be analysed in Washington. A US acquisition of a UK AI firm will inevitably raise concerns in Westminster. A European data infrastructure transaction may face scrutiny under emerging EU digital sovereignty rules. Leaders must be prepared to frame their deal not just in commercial terms, but in terms that resonate with national priorities and political sensitivities.
This requires a strategic communications approach that understands national narratives, industrial strategies and diplomatic concerns. Otherwise, leaders risk allowing competitors, commentators or political voices to shape the narrative first.
The Influence Chain: Wider Than Leaders Assume
The modern deal is shaped by a wider influence chain than most organisations acknowledge. Beyond employees and shareholders, there are regulators, governments, sovereign wealth funds, think tanks, community leaders, analysts, trade associations, NGOs and specialist media. Each group carries its own priorities, anxieties and informal power. Early private engagement is essential to avoid creating unintended opposition.
When these voices understand the rationale, see their interests acknowledged, and feel respected in the process, they become stabilisers rather than disruptors.
The Strategic Advisor: The Missing Piece of Deal Leadership
In my experience, one consistent theme stands out: the need for a senior advisor who serves as the deal's conscience, somebody who brings in external viewpoints to internal decision-makers. This is someone who challenges leaders when optimism outpaces reality, identifies contradictions between messaging and behaviour, and brings an external perspective into a process that can easily become inward-looking.
This advisor is not a spokesperson. They are a strategist who designs the private communications architecture, helps leaders navigate geopolitical and cultural challenges, and ensures that perception risk is addressed at every stage. They see the deal not just from the inside but from the outside, where it will be judged.
Why This Matters: The Space Between the Lines
The contract does not define M&A success. The subtle interactions between leaders, regulators, employees, suppliers and communities determine it. It is determined in the space between what is intended and what is critically perceived.
Deals fail because narratives are misunderstood, cultures clash, rumours spread unchecked, political tensions are left unaddressed, and trust is allowed to erode in silence. Leaders who treat communications as a post-deal task create a vacuum into which fear and misinformation quickly flow. Those who embed strategic communications early, through private engagement, cultural intelligence and geopolitical awareness, enter the public phase with alignment, momentum and confidence.
In a world defined by complexity, ambiguity and heightened political scrutiny, the differentiator is no longer the financial model. It is how well leaders manage the conversations that no-one sees.
Those who invest in shaping perception, engaging stakeholders and building trust early will define the future of successful M&A. Others will continue to learn the hard way.
