Mergers and Acquisitions: The Human Core of Transformational Growth

As leaders, we are drawn to the powerful narrative of growth. We pursue mergers, acquisitions, and major partnerships with an intense focus on the strategic and financial logic. There's a certain thrill in it—in the modelling, the negotiation, the vision of a stronger, combined entity. We scrutinise the balance sheets, map the operational synergies, and model the ROI. It’s the language we’re taught to speak, the foundation upon which we build the business case for transformation.

But in the momentum of a deal, as we get lost in spreadsheets and legal frameworks, a critical element often gets relegated to a secondary checklist: the people. We assume the human side will simply sort itself out.

A recent analysis by McKinsey, "The secret to success with transformational M&A? It’s the people," powerfully reaffirmed a truth I’ve come to see as fundamental: the numbers will only ever get you so far. When a deal fails to deliver on its promise, it’s rarely because the math was wrong; it’s because the people were never truly brought together.

The data certainly paints a stark picture when we get this wrong. It’s not a minor risk; it’s the primary reason transformations stumble. Research from sources like the Society for Human Resource Management (SHRM) has consistently shown that M&A failure rates can range from a staggering 70% to 90%, with culture clashes cited as a top contributor. The fallout is immediate and measurable. Gartner research, for instance, indicates that voluntary employee turnover can spike by over 30% in the year following a merger, as your best people, sensing instability, are often the first to quietly head for the exits.

This isn't just a challenge; it's a multi-million-dollar problem hidden in plain sight.

This reality has pushed me to reflect on what truly separates a successful integration from a painful one. It’s more than a process; it’s a mindset, built on a few key realisations that expand on that core McKinsey insight.

The Search for the “Why Behind the Why”

It starts with looking past the surface of the deal, long before the integration teams are even assembled. I was discussing this recently on our InfiTalks series with an M&A specialist Eldred Wee , founder of Edenity , and he shared a brilliant lens for this. He stressed the need to find the “why behind the why.” What are the deep, often unstated, human motivations on both sides of the table?

It’s a deceptively simple question that unlocks profound insights. A founder, for instance, might say they are selling for financial security. But is their real why to secure the highest possible price, or is it to ensure the team they built, their professional family, has a stable and respectful new home? The latter might mean they’d accept a lower offer from a buyer who demonstrates a genuine commitment to their people’s legacy. Conversely, is the buyer’s why a purely tactical move to absorb a competitor, or is it a strategic desire to learn from a unique culture of innovation?

Beyond the Handbook: Mapping the Unwritten Rules

That McKinsey report rightly points to culture as a major factor, but the real work lies in moving beyond the official statements to map the unwritten rules.

Every company has two cultures: the one that’s presented in the handbook, full of mission statements and declared values, and the one that actually lives and breathes in the hallways and Zoom calls. The latter is where the truth lies.

To understand it, you have to investigate the organisation's core customs. Imagine merging a company where meetings are punctual, decision-driven, and end precisely on time, with one where meetings are fluid, creative brainstorming sessions that often run long. Without acknowledging this difference, you don’t just have inefficient meetings; you create a daily point of friction where two teams silently judge each other. One side is seen as “rigid and uncreative,” the other as “unfocused and disrespectful of time.”

Mapping these rules requires acting like an anthropologist. Ask probing questions during the due diligence phase: “Walk me through how a new idea goes from concept to reality here.” “Tell me about a project that failed and what happened next.” “How is information shared? Is it top-down, or does it flow more freely?” The answers reveal far more than any values statement. They tell you how a team collaborates, how they handle risk, and how they treat each other, allowing you to anticipate points of conflict and build bridges before they’re needed.

Leading Through the Fog: A Strategy for Ambiguity

Once you understand the people and their culture, the next challenge is navigating the treacherous period of uncertainty that follows any major announcement. The common leadership instinct is to retreat, to wait until every detail is finalised before communicating. This "silent period" is toxic. It creates an information vacuum that employees, hungry for stability, will fill with the worst-possible scenarios. Gossip flourishes, anxiety spikes, and your best people start quietly updating their resumes.

A far more powerful strategy is to communicate through the ambiguity. This means leading with transparency, even when you don't have all the answers. It involves establishing a rhythmic cadence of communication—a weekly integration newsletter, a bi-weekly ‘Ask Me Anything’ with leadership—that people can rely on. It means having the courage to say, “We haven’t decided on the new team structures yet, but we will have an answer for you by the end of the month.” This approach respects people enough to bring them into the process. It replaces fear with a sense of shared purpose and gives employees the psychological safety needed to stay focused and engaged, even when the future isn't fully clear.

The Hidden Anchors: Securing Your True Influencers

Finally, this brings us to the very heart of the "talent factor" that the McKinsey analysis so critically highlights. Stability hinges on your people—but which ones? Our focus often defaults to the names on the org chart—the top performers and senior leaders.

These individuals are certainly important, but we risk overlooking the true anchors of an organisation: the key influencers and knowledge hubs.

These are the highly networked individuals who, regardless of title, understand how things really get done. They are the social connectors who build bridges between departments, the seasoned veterans who serve as the company’s historians, the quiet mentors to whom junior employees turn for advice. They are the connective tissue of your company. When these individuals leave, they don't just take their knowledge with them; their departure signals to everyone else that the company they knew is gone, often triggering a wider wave of attrition.

Finding these anchors requires looking beyond performance reviews. Talk to mid-level managers and team members. Ask them: “Who would you go to if you had a problem you couldn’t solve?” “Who best explains how things work around here?” Once identified, these influencers must be deliberately engaged and made a part of the integration process. Their buy-in and stability are paramount to holding the two organisations together through the turbulence.

From Paper to People: A Final Thought

The financial and strategic logic for a deal might be the architecture, but the people are the foundation, the builders, and the future inhabitants. Their belief in the new vision is the only thing that will turn a plan on paper into a living, breathing, and thriving organisation.

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