Mergers are an ideal time for transformative growth, as companies join forces to strengthen and expand their offerings. But in reality, the acquisition integration process is often fraught with challenges. A staggering 70 to 90% of M&A deals fail, wasting time, money, and resources. In light of PE’s recent appetite, preemptively identifying any potential issues is crucial to ensure success in any post-merger integration.
Amid all the financial and technical concerns of an integration, it can be easy to disregard a key pillar of integration: talent and culture. Yet around 30% of integrations fail because of workplace cultural differences. Now, with talent retention at a low point, culture is an even more vulnerable failing point than before.
Why Cultural Integration Matters
Too often, cultural assessments and investigations into company culture are viewed as a luxury that companies cannot afford during the acquisition and post-acquisition process, when time is of the essence. But regarding cultural concerns as unnecessary will waste far more time and resources than skipping those crucial steps will save in the short term.
In fact, loss of talent is devastating regardless of company size, but it can especially stall progress in middle market private equity, where even a smaller portion of the workforce can represent a major loss, both in terms of sales and institutional knowledge. When that critical talent leaves, the gap in knowledge and in sales pipeline activity they lea...