Earlier this year, the MIT Sloan Management Review published a research report summarizing the findings of its global executive study on social business. The study canvassed 2,545 respondents from 25 industries and 99 countries, all of whom were involved in corporate development decisions at their respective organizations. The aim of the study was to determine how new technologies have taken hold, where such technologies are going, and how such technologies may impact M&A in the coming years.
In an interview for the report, Gerald Kane, professor at the Carroll School of Management at Boston College, had the following to say about the current social business landscape:
Any new technology experiences a faddish hype cycle where people adopt it because they feel they have to. With social, we are passing the peak of faddishness. Companies are starting to crack social’s code and turning to it for business advantage, intelligence and insight.
While the prevalence of social media in M&A was virtually unheard of a decade ago, using social media in M&A is not only becoming commonplace, but is becoming necessary. Indeed, in its report Corporate Development 2013: Pushing Boundaries in M&A, Deloitte noted that:
Although the long-term view of how technology may transform M&A is still emerging, the transformative power of technology and how it can be applied to dig for trends and insights, influence customer decisions, improve brand perception, foster communications and collaboration and enhance productivity is undeniable.
New technologies are proliferating, and while there is no clear consensus on the best way to capitalize on social media in M&A, it’s time to jump on board. In an independent survey of corporate development executives in April, Deloitte released the following findings:
- 41% of executives use social media data analytics to analyze prospective M&A transactions; an additional 17% are considering it
- 34% of executives use social media at various stages throughout the M&A lifecycle, ranging from the preliminary stage of identifying targets to the final stage of post-closing integration
- 56% of executives use social media in M&A mainly for target identification; 30% use it primarily for due diligence.
What is 100% certain, however, is that businesses must avail themselves of all possible means of establishing a competitive edge in M&A, including thinking creatively about how to use technology and social media to get deals done.
Sara Josselyn (email@example.com / +1 416.203.4463) is a lawyer in Norton Rose Fulbright’s Toronto Corporate and commercial practice.