This post has been adapted from my grad school paper for my Negotiating Leadership course. In it, we were required to write about an experience related to a merger or acquisition and our view of the effectiveness of leadership on both sides of the post-merger organization.
This course focused on understanding the complexities of global businesses and how effective leaders exercise influence inside and outside their organizations. It is designed around Professor Jeswald Salacuse’s “demand-side” leadership concept, where leaders focus on understanding and addressing the needs and preferences of the people impacted by the change. It’s about engaging all stakeholders to align the many change actions with their goals and needs by fostering a sense of ownership and buy-in.
As the course progressed, we dug deeper into his “Seven Fundamentals of Leadership Negotiation” framework, which he wrote about in Real Leaders Negotiate!
Reflecting on my agency’s acquisition by WPP’s Ogilvy, these fundamentals, if applied, would have drastically improved the post-merger outcomes. Through this framework, I shared how poor leadership communication, stubbornness, and a lack of aligned goals on both sides nearly destroyed the company we built, ultimately forcing me to leave frustrated and resentful for selling to them.
Why do M&A Deals Fail
I was initially shocked at the M&A failure rate, which, depending on the research, ranged between 40 to 90 percent, failing to meet the stated goals of the transaction. Given the amount of planning that goes into the process and the potential value created, I could not fathom this failure rate, but having been involved in both sides of numerous acquisitions that have nearly all failed to reach their potential, the numbers are pretty believable. With this level of deal failure, many research studies have tried to understand why deals fail. Most of the research I reviewed indicated poor leadership and paying too much for the company, which contributed to the inability to leverage the seller’s precious resources, leading to this insane failure rate.
This post argues that leaders who adopt a demand-side leadership mindset grounded in negotiation are significantly more likely to achieve post-merger success. I will structure this discussion around Salacuse’s seven leadership responsibilities and how their application can either enable or undermine the success of a merger or acquisition.
1. Direction: Clarifying the Vision and Reducing Uncertainty
Few things trigger organizational anxiety faster than “merger or acquisition.” Employees often respond with fear of layoffs, disruption, or status loss. In such moments, leadership must provide clear direction and repeatedly communicate the “why” behind the merger. Direction must be negotiated, not imposed. Leaders must align their vision with stakeholder concerns and communicate often, transparently, and from the top.
There must be a strong reason for the acquisition in the first place, which should be the basics and roadmap for your integration plan. Executives must understand how exactly these new resources can be leveraged in the most effective manner possible. Integration planning requires significant education about the resources, value creation, and how everyone benefits from it.
In my experience on the acquisition side, explaining why the merger was necessary, especially when the company was successful, can be tough. Ogilvy’s leadership discouraged open communication pre-acquisition. But we chose to share the real reasons behind the deal: a co-founder’s exit due to a debilitating disease, better employee benefits, and expanded global opportunities, in that order. By creating shared understanding, we reduced stress and helped our team envision a future they could believe in. Regular updates, staff forums, and access to integration plans mitigated rumors and flagged over 50 integration concerns early. When the staff can see why it is necessary and benefit personally, they tend to be more enthusiastic about moving forward.
2. Integration: Building a New Community
Culture clash is the top reason mergers fail. As Salacuse frames it, integration means uniting people with different backgrounds into a shared community.
As I discussed in my epiphany series, we operated and thought differently from most agencies. Over half of our agency employees were embedded in client offices worldwide. These embedded strategists were part of our “secret sauce,” as we found that by putting our consultants in the same office space with the client’s staff, they became part of the team rather than outsiders. An embedded strategist returned results nearly ten times greater than client projects with a remote strategist, making it non-negotiable to change. Our back-office and strategist support teams worked out of triplex houses the partners owned, as we hated working in traditional offices. Our employees loved this arrangement as the embedded strategists did not have to relocate to our office and then travel to meet with clients.
The morning after the acquisition, Ogilvy’s real estate team demanded I meet with them to discuss our move into “grown-up offices,” including pulling our embedded staff back to headquarters. I pushed back hard, burning significant political capital to preserve our cultural DNA. We ultimately moved the back office teams into proper offices but configured them into a similar setup as we had previously. Only years later, during the COVID shift to remote work, they realized our model’s effectiveness by asking my co-founder how we successfully made it work.
Integration is not assimilation. Leaders must negotiate which practices from each side support the new shared identity—and which changes would destroy what made the acquisition valuable in the first place.
3. Conflict Management: Resolving Friction and Ego Clashes
Merger speed often produces overlapping roles, bruised egos, and conflicting goals. Conflict, if unaddressed, becomes corrosive.
After our acquisition, we faced resistance from some legacy managers who saw our services and growing client interest in them as a threat. Our services began cannibalizing existing offerings, creating turf battles. In less mature markets, however, we were embraced and even celebrated.
On both sides, executives must understand and embrace differences and develop a plan to build a community between the entities. In some cases, a simple procedural change can do significant cultural or emotional damage. For example, Ogilvy IT rules prevented employees with a laptop from having an external monitor, instructing us to send them to HQ. Everyone on my team had at least two monitors, many using 3 or 4. Multiple staff threatened to quit if they could not have their monitors as it was critical to them doing their jobs efficiently. In the spirit of collaboration, the IT manager suggested we reclassify those positions as “creative” and benefit from an exemption for monitors for creative teams. In this example, the manager understood the need for the monitors and the team members’ sensitivity but could not change the policy, so he suggested a way to solve the problem that let both sides win.
Conflict resolution requires diplomacy, not directives and mandates. We encountered dozens of Ogilvy guidelines that may work in a large bureaucratic company to maintain order but can be devastating for a fast-mover like us. These power dynamics must be navigated with the same skill as client negotiations.
4. Education: Equipping Teams for Success
Successful integration depends on both sides understanding how to work together. Education is not top-down instruction; it’s mutual knowledge exchange.
To Ogilvy’s credit, they immediately launched a global roadshow introducing our solution to 30+ offices worldwide and all clients. PR teams got us speaking engagements, including the first and only time Search was given center stage at the prestigious Cannes Lions. Our section leaders trained internal teams to bundle and sell our services. Within six months, we nearly doubled our revenue.
Managers must be patient and not radically change critical workflows and teams until they understand the “secret sauce.” Disrupting the DNA of the target company’s revenue engine can be catastrophic. McKinsey Consulting recommends using multiple diagnostic approaches, ranging from interviews to focus groups, to create a common lexicon, which can be used to compare workflows and identify unnecessarily disruptive changes.
However, many leaders wrongly assume that acquired capabilities will “plug in” easily. My team advocated for integration into key steps of the web development workflow on the Ogilvy side. Still, it was removed every time due to needing a budget for more creative time or conflict with the client’s aesthetic requirements. Their account teams would then offer our Search solutions to fix the problems that could have been prevented during development.
It was very beneficial to us to collaborate with these creative teams to find ways to make their extensive Flash and image-heavy websites search-friendly and to understand that aesthetics and brand presentation are non-negotiable and how to approach that subject with clients early in the pitch. When education is skipped, teams flounder. Leaders must negotiate a learning process that aligns both parties and clarifies how the merger enhances everyone’s success.
5. Motivation: Inspiring Performance Through Alignment
Motivation is more than perks; it’s about aligning values and validating contributions. Motivation must be negotiated in a merger by showing people where they fit in the new vision.
Bob Iger’s “prenup” with Pixar is a legendary example of guaranteeing creative autonomy in exchange for trust.
More than half of our agency employees were embedded in client offices worldwide. These embedded strategists were part of our secret sauce as we found that by putting our consultants in the same office space with the client’s staff, they became part of the team rather than outsiders.
An embedded strategist returned results nearly ten times greater than client projects with a remote strategist, making it non-negotiable to change. Our back-office and strategist support teams worked out of triplex houses the partners owned, as we hated working in traditional offices. Our employees loved this arrangement, as the embedded strategists did not have to relocate to our office and then travel to meet with clients.
When Ogilvy tried to eliminate those, I fought back not for nostalgia but for retention. The morning after I left, they implemented a complex and lofty title structure irrelevant to our culture. Good leaders protect what motivates people and help them connect personally to the larger mission. This is why if I ever buy or sell another company, I will ensure we have a prenup to maintain the company’s critical attributes and functionality.
6. Representation: Advocating Internally and Externally
M&A leaders must wear two hats: one facing outward to clients and investors and the other inward toward their teams. Failure in either role can unravel post-merger success.
I had to be both an evangelist and a protector. I showcased our solutions globally while lobbying hard within Ogilvy to preserve our structure and what made us unique. I negotiated exemptions, reclassified job roles, and stood up for nontraditional setups because they worked. I also had to change and decide whether to be correct or effective, which was a growth experience.
Companies must invest the resources to find or nurture leaders through mentoring and education, especially with startups where the idea forces a company to be formed around it. In many cases, this shared passion for bringing the startup’s concept to life compensates for a lack of leadership skills. Still, as the company grows and ultimately gets acquired, it needs more than gladiators to fight for things; it needs diplomats who can communicate the shared vision and compromise where needed to preserve the essence that made it valuable in the first place.
Leaders must secure a mandate from their team before negotiating externally on their behalf. Without that internal legitimacy, representation rings hollow.
7. Trust Creation: Building the Foundation for Performance
No merger will succeed without trust. Employees must believe leadership understands them, respects their contributions, and honors their promises. As noted previously, people are the company’s most valuable resource, and they must have trust and confidence that the acquiree will do as they say and let them continue to let them do what they do best. The other detractors from success will only increase if there is a lack of trust on both sides. Fear of the acquisition’s uncertainty can cause paralysis of operations, forcing some of the best resources to leave for more security.
My co-founders and I earned trust by overcommunicating, acknowledging fears, and taking heat when needed to protect the team. That loyalty allowed us to weather the turbulence. On the other hand, when Ogilvy later broke its promises and upended our model, they lost that trust and, with it, some of our best people.
Trust is negotiated in moments of decision. It is earned by making people feel heard, showing consistency, and following through.
Conclusion
M&A is a critical driver of a company’s value creation if the resources that enable growth are not squandered. Senior business leaders and institutional investors must rethink how they approach acquisitions and strategic capital allocation to ensure they have the right integration team. We can no longer put marginal managers who are not adding value today on the integration front lines. Companies need to deploy their broad thinkers and cheerleaders, sometimes sacrificing short-term gains for the greater good.
Senior executives must realize that successful acquisitions happen when they allow the post-merger organization to truly leverage and embrace the acquired business’s resources to increase performance by reinventing the business model into something new. Deals succeed when leaders treat people not as liabilities to absorb but as assets to engage. Demand-side leadership grounded in negotiation, empathy, and mutual benefit—offers a proven path forward.
Salacuse’s seven fundamentals illuminate why so many M&A deals fail: they overlook integration’s human, negotiated nature. My experience affirms that post-merger success isn’t achieved through checklists or legal milestones; it’s a leadership challenge.
Ultimately, a merger or acquisition should be about creating something greater than the sum of its parts. That requires give and take, not scorched-earth absorption or acquirer domination, but a shared commitment to building something new together.
Recommendations
- Educate Leaders—Courses like Negotiating Leadership should be mandatory in MBA programs and executive boot camps to teach leaders how to integrate teams effectively and leverage new assets while navigating different workflows and cultures.
- Support Startups Post-Sale – Investors and incubators must provide more guidance to founders after acquisition. They are often brilliant coders, engineers, and designers, not necessarily business leaders. On the other side, many built a successful agency being the boss and may not have the skill set to follow orders.
- Redesign M&A Playbooks – Companies need human-first integration strategies that align with Salacuse’s framework.
- Assign the Right People – Place diplomats and visionaries, not just operators on the front lines of integration.
Leadership can no longer be treated as secondary in M&A. It is the heart of deal success.
