While earning my master’s degree, I took two courses simultaneously, one on leadership, the other on mergers and acquisitions. Coincidentally, each required a paper on a major failure I had experienced. For M&A, the assignment was to analyze why most acquisitions fail. For leadership, I had to describe a situation where the absence of leadership led to failure.
I submitted the same story to both professors, with a few tweaks. That experience has stayed with me because it revealed something most case studies overlook: M&A doesn’t fail because of spreadsheets. It fails because of people and the absence of leadership where it matters most.
The M&A Failure Rate Should Be a Warning Sign. According to Harvard Business Review, roughly 70% of acquisitions fail to deliver expected value. Some failures are strategic. Others stem from poor integration planning. But more often than not, it’s a failure of leadership, not at the board level, but throughout the organization, where integration happens.
Across my career, I’ve been acquired three times. In every case, I eventually left—once after three months, twice after about two years. Each time, the story was the same: missed expectations, cultural conflict, and the erosion of trust.
The Root Causes: Culture, Communication, and Control.
In both papers, I detailed the most common reasons M&A integrations fall apart. Most of them boil down to leadership gaps in execution:
- Strategic Fit, Operational Misfit: Senior leadership often sees an acquisition as a high-leverage growth move, filling a capability gap or extending market reach. But middle managers, especially those guarding P&L or bonus-driven KPIs, often view the new entity as a budgetary threat. I experienced this firsthand when our agency was acquired. Despite being brought in to drive innovation and client value, we were perceived as budget and resource cannibals. Key stakeholders resisted integration, cut our onboarding short, and withheld introductions to key accounts. The acquisition made strategic sense, but tactically, we became a liability—unless we brought net-new revenue that directly padded their numbers.
- Misaligned Strategic Intent: Many acquisitions fail because the why behind the acquisition is unclear or not shared between the acquiring and acquired teams. Sometimes, it’s about market share; other times, it’s about tech, people, or clients. But if leadership doesn’t communicate and align the strategy, confusion and mistrust follow quickly.
- Cultural Incompatibility: Culture clash is one of the most frequently cited reasons for post-acquisition failure. Leadership often underestimates the gravity of merging two operating environments, especially when one is entrepreneurial and the other bureaucratic.
- Loss of identity and control: Founders and senior staff from acquired firms often struggle with losing autonomy. When you’re used to running the show, being relegated to “just another manager” can be jarring. I once compared it to being the parent bird suddenly thrown into the nest with all the chirping chicks, vying for the same attention and scraps of budget.
- Unclear decision rights: Post-acquisition, even the most minor things, like ordering a laptop or keeping your international phone plan, can become friction points. At one firm, we had to fight to retain our processes around purchasing powerful computers for our analysts, as the parent company wanted us to take their hand-me-downs. At another, I was asked to give up an international phone plan despite spending 20 days a month in foreign countries.
- Mismatched operating models: We operated with flexible scopes of work. The acquiring company relied on strict staff plans and timesheets. This difference led to friction, but also revealed how siloed thinking can undermine efficiency. Without leadership to align models and mediate expectations, even small differences become major sources of tension.
- Lack of Post-Merger Integration (PMI) Planning: Integration is often seen as “something we’ll figure out after the ink dries.” But unclear org charts, tech platform misalignment, or undefined brand governance derail value creation. When leaders fail to manage the post-acquisition integration differences, it leads to employee churn and stalled integration.
- Metrics Mismatch & Revenue Attribution Loss: Often, the acquired business has different KPIs or sales attribution models. When systems are merged, leads disappear, performance tanks, and no one can explain why.
- Employee Trust Breakdown: Fear, rumor, and uncertainty spike when there’s poor internal communication. Leadership often keeps M&A details quiet for legal reasons, but post-close, they fail to flip the script and rebuild trust.
- Assumed Synergies That Never Materialize: “Synergies” is a favorite word in pitch decks, but rarely broken down into operational, financial, and strategic specifics. Leadership often fails to validate whether those synergies are even feasible before moving forward. It is critical to break down the expected synergies and ensure you can validate them.
The Cost of Misalignment
Large companies often amortize executive labor across divisions, billing acquired companies for internal stakeholder time. But what happens when those executives don’t understand the product or value proposition of the acquired team?
We were once charged for hours of internal “support” from executives who had never spoken with us, let alone understood how to sell or scale our offering.
Here’s my rule now: If I’m paying for your time post-acquisition, you must spend at least two hours learning what we do.
A Better Way: Lead the Integration, Don’t Just Announce It
When I sold Heflang Builder, I trained every member of the acquiring team on why we built it, who needed it, and why we had the roadmap we did. I walked them through how we manage customer service and why it mattered. Not because I was obligated, but because I’d seen what happens when no one does.
Similar to our Ogilvy acquisition. We had projected massive profit growth if our solutions were integrated into every site built by Ogilvy Interactive. Everyone applauded the upside, but nobody wanted to reduce their budget line items or alter their creative and development to make it happen. In the absence of leadership to reallocate resources and resolve conflict, that opportunity went unrealized.
Conclusion: Integration Is a Leadership Test, Not a Process Map
Successful integration doesn’t hinge on synergy models or investor decks. It hinges on leaders—at every level—who can align visions, resolve tensions, and make the uncomfortable decisions that integration requires.
Without that leadership, all the potential in the world is just a slide in a boardroom presentation.
If I had to rewrite that graduate school paper today, I wouldn’t call it a failure of M&A. I’d call it a failure of leadership, just playing out through the lens of an acquisition.
