Your Next M&A Event is a People Problem
Insights on harnessing culture and leadership for M&A success in the Financial and Tech sectors
In the fast-paced worlds of finance and technology, mergers and acquisitions can be transformative opportunities, yet they often encounter hurdles that threaten to derail their success. “Culture is often the missing link in M&A success. Without strategic alignment of people and values, even the most well-structured deals can falter,” emphasizes Jamal Khan, Managing Partner at Amrop Carmichael Fisher in Australia and a member of Amrop's Global Digital Practice.
Cultural Due Diligence for Successful M&A Integration
According to Khan, early cultural due diligence, using tools like surveys, interviews, and focus groups, serves as a critical step to identify friction points and align organisational practices. “Covert people diligence is an even more important part of the process which often organisations do not know how to undertake or that this is even possible. This will help you gain insights on culture, decision making and expose any red flags. It’s necessary to speak to a broad range of stakeholders covertly who may not be involved in the deal without compromising confidentiality. Additionally it is wise to speak to industry experts re market reputation and past employees to see if there are any worrying trends regarding reasons for leaving.”
For tech and financial firms alike, understanding the underlying cultural dynamics can significantly impact the pace of integration and the achievement of revenue synergies, which research shows companies that align culture early are 70% more likely to realize.
Synergy Through Leadership and Cultural Alignment
The intersection of leadership, culture, and M&A outcomes can’t be overstated. Khan highlights that companies investing in integration leadership are up to 1,7 times more likely to exceed their synergy targets. “Focusing on assessing leadership styles, behaviours, and cultural fit early in the process enables firms to form cohesive post-deal teams that drive smoother integrations,” Khan explains. “Executive assessments are instrumental in surfacing potential misalignments that threaten operational efficiency, offering a roadmap for tailored onboarding and leadership development.”
Unfortunately, only 29% of executives feel adequately prepared to lead during M&A integrations, underscoring a significant leadership gap. Strengthening this capability through targeted programs not only mitigates risk but also enhances overall value creation, making leadership alignment a strategic priority for financial and tech companies.
Embedding Values and Culture for Sustainable Post-Merger Success
Long-term success in mergers hinges on embedding cultural priorities into all aspects of organisational operations. This includes aligning shared values, establishing clear decision-making processes, and reinforcing core behaviours via performance metrics, onboarding, and leadership communication. “Organisational values are the backbone of trust and decision-making, and misaligned values can cause confusion and disengagement, especially during critical integration phases,” Khan notes. “Companies that proactively address cultural and leadership factors are more adept at retaining top talent and fostering a unified purpose.”
Investing early in leadership development and cultural alignment not only captures more value - dealing with these dimensions can contribute to deals capturing up to 9% more value - but also sets the foundation for sustainable growth post-merger.
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To find out more, reach out to Jamal Khan or the Global Digital Practice members in your country.