In every M&A process, there is a moment that feels deceptively calm. The Letter of Intent (LOI) is signed, the term sheet agreed, and suddenly, the complexity of the deal seems to settle. Confidence rises internally. What once felt uncertain now appears tangible.
That is precisely when the real risk begins. From my work advising leadership teams during transactions, I know that the LOI stage is not merely a legal or financial milestone. It represents a psychological turning point. From this moment, people begin to fill in the blanks. They interpret signals, draw conclusions, and form expectations – long before the transaction itself is secure.
When Communication Discipline Slips
What often follows the signing of an LOI or term sheet is a subtle yet consequential shift in communication tone. Leaders begin to speak as if the deal were already done. When quietly replaces if. Strategy papers sound final rather than provisional. The language shifts from “conditional” to “definitive”. That is understandable – reaching an LOI can feel like a victory. Yet this is exactly when communication discipline matters most. Because the deal remains tentative: due diligence can expose issues, financing conditions can change, and regulators can intervene.
When enthusiasm runs ahead of reality, an expectation gap opens. And as that gap grows, it is not only the transaction that is at stake but also the credibility of leadership.
The Need for Alignment of Communication. Another recurring pattern is the lack of coherence. After the LOI is signed, several leaders begin to communicate – each from their own perspective. One emphasises growth, another efficiency, and a third one talent acquisition. Each message may be valid, yet collectively they create ambiguity. Employees notice immediately. They listen, compare, and detect contradictions. When leadership messages are not aligned, trust erodes – not because of disagreement on substance, but because of perceived inconsistency.
In this atmosphere, informal channels thrive. A casual remark, a prematurely shared detail – and a new story emerges. By the time leadership responds, the narrative has already moved on, driven by speculation rather than intention.
Silence Is Not an Option – One Can Not Communicate.
Many leaders respond with silence, hoping to speak only when all facts are known. But silence does not slow interpretation – it accelerates it. People do not wait for certainty; they fill the void themselves. A lack of clarity is not interpreted as prudence but as uncertainty. At the same time, the temptation increases to emphasize mutual benefits – growth, efficiencies, market position. These are persuasive themes, but they remain assumptions. When such hypotheses are communicated as facts, expectations are set that later adjustments can scarcely undo.
The Overlooked Middle: Middle Management. In this phase, middle management is frequently underestimated. While the executive team is deeply engaged in the process, the layer that will later carry the transformation often receives too little context, too late. This is where quiet resistance begins – not through open opposition, but through hesitation and doubt. Momentum is rarely lost through disagreement; it is lost through lack of involvement.
Leading Through the LOI -Phase. CEOs and leadership teams that navigate this phase successfully do not communicate more – they communicate better. They
- align early on a coherent narrative that remains consistent across functions and regions,
- distinguish clearly between what is known, what is expected, and what still requires validation,
- treat internal communication as a priority, not as a secondary task,
- address uncertainty proactively and maintain open dialogue,
- equip middle management as carriers of the message – not merely as recipients.
In this way, the period following the LOI signing becomes not a source of risk but a foundation for trust. The LOI is not a mere technical formality. It is the moment when conviction is either strengthened or undermined. Deals rarely fail because of what is written in the LOI – but often because of what is communicated around it. The real work of making a deal successful does not begin at closing. It begins here.