Understanding Cultural Dynamics In M&A

𝐄𝐯𝐞𝐫𝐲𝐨𝐧𝐞 𝐖𝐚𝐫𝐧𝐞𝐝 𝐌𝐞 𝐀𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐍𝐮𝐦𝐛𝐞𝐫𝐬.  𝐍𝐨 𝐨𝐧𝐞 𝐰𝐚𝐫𝐧𝐞𝐝 𝐦𝐞 𝐚𝐛𝐨𝐮𝐭 𝐭𝐡𝐞 𝐩𝐞𝐨𝐩𝐥𝐞. We spent months modeling cash flow, margins, and upside. But what nearly broke the deal? 𝐂𝐮𝐥𝐭𝐮𝐫𝐞. I walked into a business where high-performers resisted structure. The more I tried to modernize, the more silent pushback I met. And here’s the truth: 𝐍𝐨 𝐬𝐩𝐫𝐞𝐚𝐝𝐬𝐡𝐞𝐞𝐭 𝐰𝐢𝐥𝐥 𝐬𝐡𝐨𝐰 𝐲𝐨𝐮 𝐰𝐡𝐨’𝐬 𝐫𝐞𝐚𝐥𝐥𝐲 𝐢𝐧 𝐜𝐡𝐚𝐫𝐠𝐞. What Financial Models Miss — And Culture Reveals 𝟏. 𝐈𝐧𝐟𝐥𝐮𝐞𝐧𝐜𝐞 ≠ 𝐓𝐢𝐭𝐥𝐞 ‣ Spend time with the team without the owner present. ‣ Watch who they look to before speaking. That’s your informal leader. ‣ Ignore this, and change will stall from day one. 𝟐. 𝐑𝐞𝐬𝐢𝐬𝐭𝐚𝐧𝐜𝐞 𝐈𝐬 𝐎𝐟𝐭𝐞𝐧 𝐑𝐨𝐨𝐭𝐞𝐝 𝐢𝐧 𝐋𝐞𝐠𝐚𝐜𝐲 𝐖𝐢𝐧𝐬 ‣ Top performers are often most threatened by new systems. ‣ They’ve succeeded in chaos. Professionalization feels like disruption. ‣ Don’t assume alignment. Earn it. 𝟑. 𝐏𝐫𝐨𝐜𝐞𝐬𝐬 𝐃𝐨𝐞𝐬𝐧’𝐭 𝐂𝐡𝐚𝐧𝐠𝐞 𝐏𝐞𝐨𝐩𝐥𝐞. 𝐓𝐫𝐮𝐬𝐭 𝐃𝐨𝐞𝐬 ‣ Before you implement new tools or policies, ‣ Understand the emotional economy. ‣ Trust is the only currency that converts smoothly post-acquisition. 𝐖𝐡𝐚𝐭 𝐘𝐨𝐮 𝐒𝐡𝐨𝐮𝐥𝐝 𝐑𝐞𝐚𝐥𝐥𝐲 𝐃𝐢𝐥𝐢𝐠𝐞𝐧𝐜𝐞 ‣ Observe decision-making dynamics in real time ‣ Identify the hidden influencers early ‣ Map how authority actually flows-not just what’s on paper Financial models reveal potential. Culture reveals reality. The real diligence begins when the people start talking. Follow me, Kay Azmat for more insights on building smart, resilient businesses. Repost to help your network. ♻️

When doing any M&A - are you purchasing the intellectual property or the business? Because if you're buying ANYTHING more than the intellectual property, trust is at the core of the integration. You can (maybe) integrate systems in 90 days. Integrating trust takes a whole lot longer. One of the most overlooked risks in M&A? The human one. I’ve been through multiple integrations, due diligence cycles, and post-close transitions. And I can tell you: spreadsheets may win the deal, but it's trust, communication, and culture that determine whether the value actually materializes. Circling back to one of my previous posts - it is also making sure the "say" and the "do" match - ALL the way back to the initial due diligence. Here's what often gets missed: 🔹 People interpret silence as threat - and in the absence of information will create their own story - which is often significantly worse than the truth! Communication isn't just a courtesy—it's risk mitigation. 🔹 Culture is an operating system. Every team has embedded ways of working. If you force alignment without understanding those patterns, you may inadvertently shut down what made them successful in the first place. 🔹 Integration is emotional. Titles shift. Power moves. Identities blur. Benefits change. The process isn’t just technical—it’s deeply personal. And without a strategy for that, and a proactive change plan (that is HEAVY on the communication) you’re leaving value on the table. The most successful integrations I’ve supported had three things in common: 🧩 A shared leadership narrative grounded in purpose and clarity. 🧩 Early identification of cultural hotspots—not just red flags, but areas of pride and strength. Coupled with the understanding that the acquired organization may often have things to teach the buying organization! 🧩 A deliberate, empathetic, and transparent approach to change management—because speed without humanity breeds resistance. M&A is an incredible opportunity to reset, refocus, and rebuild stronger. But only if the people inside the business believe they have a future in the new version. The real synergy? It’s not just in the balance sheet. It’s in the belief system. I'd love to hear from others—what’s something you’ve seen work (or not) when two organizations become one?

Everyone loves to talk about the strategy behind M&A deals. But the thing I’ve learned watching FMCG leaders up close? Deals don’t fail because of bad strategy. They fail because of people. It’s never the financial model that breaks first — it’s leadership misalignment. I see it happen all the time in FMCG — especially in Private Equity backed environments. The model looks perfect on paper: → Acquire a few fast-growing brands → Roll them into a global portfolio → Drive efficiencies, cost synergies, market expansion But then the integration starts — and suddenly things look very different. Because what the spreadsheet doesn’t tell you is: → The founder isn’t used to quarterly board meetings with EBITDA pressure → The CMO is still running a startup playbook in a scaled organization → The CEO doesn’t align with the go-to-market model in a new geography → The commercial leaders can’t navigate two different company cultures merging overnight And this happens more than most will admit. In fact — Bain & Company data shows 70% of M&A deals underperform expectations. And culture is one of the top 3 reasons. In the FMCG space — where brands carry legacy pride and deeply embedded ways of working — leadership integration is no longer “important.” It’s non-negotiable. Great M&A outcomes today don’t just come from smart strategy. They come from: → Leadership teams that trust each other faster than the market moves → Leaders who can flex between entrepreneurial scrappiness and corporate discipline → People who know when to protect brand identity — and when to evolve it And here’s what I tell my clients: If leadership alignment is not your #1 risk mitigation strategy in M&A — you’re not just betting on growth. You’re betting on luck. The smartest investors I work with in FMCG? They’ve learned this the hard way. They’re doing culture diligence as seriously as financial diligence. They’re assessing leadership “integration readiness” before the deal closes. They’re hiring talent not just for operational excellence — but for the ability to navigate ambiguity, pressure, and transformation. Because the future of FMCG M&A won’t be won by the best strategy. It will be won by the best people. Drop me a message — I’m always up for a conversation on building high performing teams. #FMCG #ExecutiveSearch #PrivateEquity #MergersAndAcquisitions #Leadership #CultureIntegration #ConsumerGoods #HiringStrategy

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.

The last couple of days, I’ve shared some thoughts around culture in M&A. Today, I’d like to talk about the power of employee listening for understanding the target company’s culture and powering cultural integration. Before the announcement, we can only get the perceptions of people who are under the tent, outside parties, and what’s been shared in the media. That means we’re only getting part of the story during the cultural due diligence phase. To learn the rest of the story, we want to hear what employees have to say. We usually do this with surveys, interviews, and focus groups. They provide invaluable insights to help us understand potential areas of both cultural synergy and culture clash. I’ve found there are frequently disparities between how leaders perceive their organization’s culture and how employees experience it. Employee listening helps to bridge this gap, offering a more nuanced view of the culture. A few years ago, I worked on a deal where the value drivers were rooted in warehouse efficiency. None of the target’s leaders have ever worked in the warehouse – in fact, they really didn’t think about the warehouse much during the sale, and they saw the warehouse workers as fungible. Everything was focused on the office where they worked. So, of course, all of the cultural questions were answered from the perspective of an office worker who was not a key value driver. After the deal was announced, the integration leader and I spent time in the warehouse, listening to the employees there. They had great ideas about how we could make the acquisition more successful, including inexpensive ideas that would drive efficiency, which was the entire goal of the deal. We worked with their leadership to implement several of the ideas. We drove amazing synergies in this deal – synergies that never would have happened if we didn’t spend time listening to employees who were overlooked during the formal diligence phase. This experience underscored the importance of comprehensive employee listening. It's not just about the boardroom - it's about every room. In your experience, how have you used employee listening in cultural due diligence? I'd love to hear your thoughts. #MergersAndAcquisitions #CulturalDueDiligence #EmployeeListening

Mergers are like marriages of convenience. Necessary but not necessarily desired. Are you helping people grieve their losses? Mergers and acquisitions are typically treated as financial deals. Legal, accounting, and operations teams take the lead. Spreadsheets are reviewed. Synergies are projected. But where is the space for grief? As an Organizational Ombuds, I’ve seen this play out time and time again: people aren’t just adjusting to a new org chart—they’re mourning the loss of the company they knew. Their familiar language, inside jokes, unspoken rules, even who gets the last word in meetings—all of that changes overnight. Each organization is like a sovereign nation with its own customs. A merger isn’t just a deal—it’s a cultural collision. If integration teams aren’t equipped to address that, resistance builds, trust erodes, and your top talent quietly disengages. What if we did it differently? 🔍 What if M&A teams included an Ombuds from day one? Unlike consultants focused on systems or advisors focused on valuation, Ombuds serve as confidential thought partners—listening to fears, spotting friction early, and helping leaders communicate in ways that feel human, not corporate. 🧠 We help people process change before it becomes conflict. 🗣 We teach leaders how to listen, not just announce. 🤝 And we translate between cultures—so that both legacy teams feel respected and heard. Because behind every stalled integration or culture clash is a simple truth: no one was tasked with helping people feel safe enough to adapt. So, I’ll ask: ➡️ Who on your integration team is responsible for emotional fluency? ➡️ How are you equipping leaders to communicate with empathy? ➡️ Who’s listening when people feel lost, angry, or overlooked? The numbers matter—but the human experience is what determines whether your integration thrives or fractures. Let’s not treat grief like a risk to be managed. Let’s treat it like a truth to be honored.