Common Pitfalls in M&A Integrations

M&A deals don’t fail because of strategy. They fail because of people. Private equity firms love a "Buy & Build" strategy—acquiring multiple brands, driving synergies, and scaling fast. On paper, it looks like a winning formula. But in reality? Many of these deals fall apart. And the reason isn’t the financial model—it’s the leadership model. The Real Risk in FMCG M&A: Leadership Misalignment When PE firms acquire consumer brands, they focus on: ✅ Cost-cutting opportunities ✅ Supply chain efficiencies ✅ Market expansion But what many overlook is whether they have the right leadership to: - Integrating multiple organizations means uniting leadership styles, work cultures, and decision-making approaches. Many execs who thrived in founder-led or corporate environments struggle in a PE-backed world. - PE investors want fast, high-ROI execution. But not every CPG leader is built for that kind of pressure. Some are great at maintaining brands—not scaling them. - The “Buy & Build” model often involves shifting brands from legacy mindsets to high-performance, high-expectation environments. Without leaders who can navigate that shift, things fall apart fast. Many FMCG executives come from corporate backgrounds—structured environments with long decision cycles. PE-backed brands move differently. They require: ⚡ Speed over process – There’s no time for bureaucracy; execution matters more than consensus. ⚡ Ownership mentality – It’s not about protecting a department—it’s about maximizing valuation pre-exit. ⚡ Financial fluency – PE investors expect executives to be laser-focused on EBITDA, margins, and cost synergies. Not every FMCG leader has that mindset. Hiring from within traditional FMCG without assessing PE-readiness is a costly mistake. IMO, PE firms should: -Hire for agility, not just experience – The best leaders in PE-backed brands aren’t just industry veterans. They’re operators who can move fast, make tough calls, and execute under pressure. -Assess leadership for integration skills – The first 12 months post-acquisition are critical. Leaders must be able to unite teams, align cultures, and minimize disruption. -Prioritize commercial & financial acumen – PE leadership isn’t just about brand-building. It’s about profitable, scalable growth. Executives who only focus on marketing or product without understanding financial impact won’t last. -Think beyond "who ran a big brand" – Just because a leader ran a $1B consumer brand doesn’t mean they can thrive in a high-stakes PE-backed environment. Leadership Determines Whether M&A Works—or Fails. If a PE firm’s leadership hiring strategy is an afterthought, the exit strategy is at risk. The smartest investors prioritize leadership alignment as much as financial modeling. Because at the end of the day? Great strategy means nothing without the right people to execute it. #PrivateEquity #MergersAndAcquisitions

Most deals don’t fail because the numbers were off. They fail because the assumptions, especially about people, were wrong. Too often, teams focus on financial modeling, market sizing, and legal risk, while neglecting one of the most critical components of a successful acquisition: cultural fit. 🔹 Strong dealmakers know better. They don’t wait until post-close to start thinking about how teams will work together. They start on Day 1. In a Buyer-Led M&A™ approach, cultural diligence isn’t a checkbox, it’s a core pillar. Every functional lead is trained to assess not just operational alignment, but cultural compatibility. They're not simply asking, “Can this company be integrated?” They're asking deeper questions: “How do these people think? What motivates them? Will they thrive inside our environment, or push back against it?” This kind of people-centric diligence is what separates deals that look good on paper from deals that actually create long-term value. Because when you align the people, you reduce friction, unlock collaboration, and preserve the momentum that made the target attractive in the first place. Buyer-Led M&A™ isn’t just about controlling the deal process, it’s about earning the right to scale by aligning strategy and culture. #BuyerLedMA #MergersAndAcquisitions

I've led 17 M&A integrations. Here are the 5 critical lessons I've learned: 1. 𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩 𝐚𝐭 𝐭𝐡𝐞 𝐓𝐨𝐩 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐬 𝐚 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭 𝐌𝐢𝐧𝐝𝐬𝐞𝐭 Traditional leadership development fails during integration. Why? Because uncertainty demands a different kind of leader. Through these integrations, I learned to identify leaders who: • Thrive in ambiguity • Adapt their style instantly • Read situations before they escalate • Drive change without losing people 2. 𝐋𝐢𝐬𝐭𝐞𝐧 𝐚𝐧𝐝 𝐋𝐞𝐚𝐫𝐧 𝐁𝐞𝐲𝐨𝐧𝐝 𝐭𝐡𝐞 𝐍𝐮𝐦𝐛𝐞𝐫𝐬 The true value isn't just in products and revenue. Some of the best discoveries can come from understanding what made the acquired company exceptional in their: • Human resource strategies • Cultural dynamics • Inclusion practices These are often the hidden gems that should reshape the acquiring company, not just the other way around. 3. 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐞 𝐰𝐢𝐭𝐡 𝐇𝐞𝐚𝐫𝐭 𝐚𝐧𝐝 𝐌𝐢𝐧𝐝 Success isn't just about systems integration. It's about: • Seeing the faces behind the spreadsheets • Understanding transferable skills • Creating meaningful roles that honor expertise • Walking in their shoes through the transition 4. 𝐁𝐞 𝐚 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐏𝐚𝐫𝐭𝐧𝐞𝐫 𝐭𝐨 𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩 I've watched great managers crumble during integration. And seen unexpected leaders emerge from the chaos. Here’s what differentiates: • Challenge assumptions constructively with market intelligence • Balance short-term wins with long-term strategic goals • Support decision-making with clear risk/benefit analysis • Act as a bridge between acquired and acquiring leadership teams 5. 𝐋𝐢𝐦𝐢𝐭 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐃𝐢𝐬𝐫𝐮𝐩𝐭𝐢𝐨𝐧 While integration is complex, maintaining business momentum is critical. Focus on: • Preserving customer relationships • Maintaining operational excellence • Protecting revenue streams • Keeping top talent engaged Through these integrations, I've learned that success isn't written in manuals. It's carved out in moments of uncertainty. The best strategies emerge when we dare to look beyond traditional playbooks. And see the full picture: products, people, and possibilities. 👉 To my fellow Corporate Development and M&A experts: What crucial lessons would you add from your integration experiences? Share them below so we can keep learning from each other.

We aren't seeing a ton of M&A right now, but we are certainly seeing the results of poor integration planning. Far too few buyers come to the table with a clear post-acquisition integration plan, especially on the human resources side. This isn’t just a missed opportunity — it’s a strategic risk. Why integration planning matters: * Culture clashes can kill performance... especially in highly regulated, compliance-driven environments. * Disjointed SOPs and workforce policies lead to operational drag, especially across multi-state operators. * Without a people strategy, you risk losing top talent and morale. Buyers should be asking: * What’s the state of the HR tech stack (payroll, scheduling, onboarding)? Is it scalable? * Are there employee classification or labor risks — especially around hourly roles or contractors? * What’s the leadership bench strength? Who are the culture carriers worth retaining? * Are benefits and compensation aligned and competitive, or will harmonization cause churn? * Is there a clear plan to align org structure and compliance training across entities? M&A without integration is like planting without watering — you might own the asset, but it won’t grow. Let’s stop thinking of HR as a post-close detail. It’s your retention strategy, culture play, and risk buffer — all in one. I would love to hear from folks in cannabis M&A, HR, or ops: What’s working — and what still needs fixing — when it comes to integration? #CannabisIndustry #MergersAndAcquisitions #HRStrategy #OrganizationalIntegration #CannabisBusiness

Hard truth, most M&As fail. Yet, I have seen others succeed. The number one reason I have had clients succeed is that they prioritize people and culture. Significant research has been done on this issue, and here is a list of the top 10 reasons mergers and acquisitions fail: 1. They overpay for acquisitions. 2. Poor due diligence tanks the deal. 3. Cultural clashes destroy value. 4. Synergies never materialize. 5. Strategic rationale is weak. 6. Post-merger integration fails. 7. Human factors get ignored. 8. Communication breaks down. 9. Regulatory issues create friction. 10. Top talent walks away. But here's your playbook for success: 1. Strategic Planning & Execution ↳ Do thorough due diligence, set clear objectives, and build comprehensive integration plans. 2. Vision, Mission & Values ↳ Map the landscape of both organizations. ↳ Create an inspiring unified vision. ↳ Craft a compelling mission. ↳ Set shared values that guide decisions. ↳ Build a strategy that maximizes strengths. 3. Market Analysis ↳ Study the industry, customers, competition, and opportunities deeply. 4. Communication Strategy ↳ Build a clear plan to keep all stakeholders aligned and informed. 5. Integration Planning ↳ Form a dedicated team, create detailed plans, and tackle cultural issues head-on. 6. Talent Strategy ↳ Review org structures. ↳ Map roles clearly. ↳ Set selection criteria. ↳ Plan transitions carefully. ↳ Keep key players engaged. 7. Leadership Assessment ↳ Start during due diligence. ↳ Use data to drive decisions. ↳ Focus on team dynamics. ↳ Move decisively on key roles. Follow this framework, and you'll dramatically increase your odds of M&A success. The key? A systematic approach. Focus on clear communication, thorough planning, and smart talent management. Tell me, what was your strategy for a successful M&A? — P.S. Unlock 20 years' worth of leadership lessons sent straight to your inbox. Every Wednesday, I share exclusive insights and actionable tips on my newsletter. (Link in my bio to sign up). Remember, leaders succeed together.

Analysts projected this year to be a breakout year for M&A. In my experience, one mistake companies often make during acquisitions is assuming the acquiring company's culture will automatically remain dominant post acquisition. Here’s why that’s not always right. Many times, bringing two companies together and fusing their resources and operations creates an entirely new company— one that may benefit from a culture change, and you often have large groups of new people with different experiences, working styles, and behavioral norms. For example, following a merger, we realized our previous corporate values no longer accurately reflected the scope or needs for our “new” company. So we reset them. It wasn’t always easy: It took a long-term project involving employee input throughout. It also required objectivity at the leadership level to stay open to new ways of thinking about our culture, how we want to work and communicate to best compete and succeed in the marketplace.  However, the initiative resulted in values that, while similar to the old, better articulated and  illustrated our evolved mission and culture and set us on a path toward greater success. So tell me: Have you ever used an acquisition to reset company culture? Any pointers for others?

Is cultural alignment on your due diligence checklist? Beyond financials, product capabilities and operational strategies, how the two company cultures combine does impact the success of any M&A integration. Do the two companies share common values and norms that guide employees in how they work with each other and with customers? Determining the answer to this question is not easy, particularly when access to the team is generally limited to a small group of senior-level employees. However, even with limited access, it is possible. Here are just a few ways to gain insight into a company’s culture through the due diligence process. ↩ Review of engagement and pulse surveys, paying particular attention to employee comments for trends. ↩ Interviews and even informal discussions with those individuals privy to the deal give insights to leadership styles and employee experiences. Pay attention to language choice, tone, and non-verbal cues. ↩ Review documents such as employee handbooks, mission and value statements, and corporate communications, focusing on the tone and messaging. Consider disconnects that may exist between these items and other data points. ↩ Outside sources such as customer reviews, Glassdoor ratings and social media posts shed light on customer and employee experiences. ↩ Learn the goal and objective setting process from the top down to the individual employee level, how performance is tracked and measured, and what has been the history of achievement. This can give you a window into the clarity of leadership communication and the performance mindset of the organization. There will always be differences in company cultures, and often, they won’t be considered significant enough to prevent the deal from being completed. Therefore, knowing the differences BEFORE day 1 and having a strategy to address is a must. I’ll talk about how to navigate those differences in future posts. Follow me to learn more.

Many companies underestimate M&A integration costs, particularly in sectors like healthcare, where regulatory and compliance factors drive up expenses. Four key challenges to consider when planning for integration costs are: • 𝙎𝙮𝙣𝙚𝙧𝙜𝙞𝙚𝙨: the larger the targeted synergy in an integration plan, the greater the required change and associated costs, such as redesigning the operating model, layoffs, and rebranding • 𝙀𝙢𝙥𝙡𝙤𝙮𝙚𝙚-𝙧𝙚𝙡𝙖𝙩𝙚𝙙 𝙘𝙤𝙨𝙩𝙨: while talent-related costs may represent a significant portion of M&A integration expenses, they can yield long-term savings - but businesses should closely track these synergies and place a strong focus on acquiring the right talent • 𝘿𝙚𝙖𝙡 𝙨𝙞𝙯𝙚: smaller deals can incur higher integration costs as a percentage of the deal value, while larger deals benefit from economies of scale, often having lower integration costs despite their larger size • 𝙎𝙚𝙘𝙩𝙤𝙧 𝙫𝙖𝙧𝙞𝙖𝙩𝙞𝙤𝙣: understanding sector-specific trends can help businesses plan more effectively for the financial aspects of M&A Effective strategic planning is essential for navigating these complexities. A clear understanding of integration costs empowers organizations to make informed decisions, ensuring long-term value creation. #EYParthenon #MandA #Integration #IntegrationCosts

It’s not just an M&A deal, it’s a culture shock waiting to happen. In M&A, the spotlight is on closing the deal: growth targets, synergies, and operational integration. And too often what’s missing is the human side of the equation. Studies consistently show that 70% of deals fail to deliver expected value, and the good ol' fashioned culture clash is a top reason why. What derails progress post-acquisition? 𝗖𝗵𝗮𝗻𝗴𝗲 𝗳𝗮𝘁𝗶𝗴𝘂𝗲: especially for teams who’ve already weathered months of uncertainty. 𝗠𝗶𝘀𝗮𝗹𝗶𝗴𝗻𝗲𝗱 𝘃𝗮𝗹𝘂𝗲𝘀: when purpose, pace, and power dynamics don’t sync. 𝗦𝗶𝗹𝗲𝗻𝘁 𝗮𝘁𝘁𝗿𝗶𝘁𝗶𝗼𝗻: high performers leaving not for more pay, but for more clarity. Most executive teams plan for the deal. Few plan for the day after. And even fewer have a real culture integration strategy beyond the welcome emails and all-hands. That’s where Allison Wright and I come in. At 3 Keys Consulting, LLC, we help leaders navigate the 𝘳𝘦𝘢𝘭 𝘸𝘰𝘳𝘬 of integration: clarifying culture, aligning leadership, and (re)building trust across newly combined teams. What’s your plan to make sure people don’t just stay, but stay engaged and aligned? #MergersAndAcquisitions #MAndA #ChangeLeadership #CultureIntegration #AlignLeadership #Trust

Leadership Under Pressure: Insights from the Trading Floor This month I'd like to unpack: Navigating Post M&A Integrations Growth through a merger and/or acquisition is an exciting time. New possibilities, stronger organization, new capabilities, diverse perspectives. And yet, how many times do we see leaders tiptoe around integration??! There are plenty of reasons to be cautious: 🔹 Tech stacks take time to audit and rationalize 🔹 Product synergies take time to flesh out 🔹 Customer retention strategies take time to execute 🔹 Potential redundancies take time to evaluate Yes… it all takes careful consideration and TIME. Having led numerous large scale integrations many things became second nature: audit of assets, rate and rank, fit to mission, organizational design. We were disciplined, we had experience and developed a playbook. And yet, not all of them went smoothly – there was money and time wasted. Why? The courage to recognize when its time to rip off the Band-Aid! Integrations aren’t just about synergy. It’s emotional. Someone feels like a winner, someone a loser. And if you try too hard to make everyone a winner, you may lose the battle. One of the biggest inhibitors to a successful integration is appeasement that is routed in fear. Fear of disrupting, offending, damaging ego … the list goes on. So what happens? Beyond the waste of time and money; it is increasingly more painful to get a positive result. 1+1 should equal 3 or 4. Yes, there are difficult conversations, but a lack of transparency and communication only makes it worse. Leading to hypothesis, disengagement and even rumor. Instead, if you are transparent and communicative from the beginning it lays the groundwork. There will be change, change will make us stronger and we all need to embrace it. Be transparent, be honest and don’t get mired in the drama. Lay the groundwork early: ✔ Be transparent—Don’t sugarcoat. Change is coming. ✔ Be decisive—Delays create uncertainty and erode trust. ✔ Be bold—Culture integration is just as important as systems. What’s worse in an M&A—moving too fast or too slow? 📸 Midjourney