The Hidden Integration Risks That Can Make or Break M&A Success

Mergers and acquisitions are designed to create value, but that value is only realised when the organisation can integrate quickly, coherently and sustainably. The strategic rationale may be compelling on paper, but the real test begins when people, systems, processes and cultures have to operate as one.

Despite this, if you’ve led or worked within an organisation that’s been through M&A, you’ll know exactly what I mean when I say that the announcement almost always sounds the same.

“Our cultures are so well aligned. This is going to be a seamless transition.”

But honestly? It rarely is, and saying it doesn’t make it true.

Even two companies from the same country, in the same sector and operating in the same region can have wildly different cultures. There will inevitably be different ways of making decisions, different unwritten rules and different expectations of what good looks like.

These are the things that really make up culture: not your logo or your values poster, but your people. And culture is built over years, so nobody can blend two of them overnight just by telling everyone they fit together.

So when you’re planning a merger or acquisition, culture – and the people who create it – need to be front and centre. Treated as something to be worked with, understood and respected, rather than smoothed over in a press release.

Your people are the group most affected by M&A activity. More than the systems, more than the structure, more than the reporting lines. Whether your integration succeeds often comes down to whether your people feel confident, secure and genuinely part of where the business is heading. If they feel sidelined by the transaction, you’ll feel the consequences long after day one: in delayed synergy realisation, duplicated systems, operational disruption, productivity loss, talent attrition and slower time to value.

Speaking of day one: that is the start, not the finish line. Integration takes time, and the people work never really stops.

Many of our clients operate in energy, oil & gas, life sciences and pharma, so a lot of their people may well have been through mergers before. I’ve even heard them say, “I’ve done this, I know the drill.”

But if you hear the same, be careful not to take that at face value. Previous experience doesn’t make someone immune to change, or to the uncertainty and anxiety that comes with it. A new acquisition still means new colleagues, new ways of working, new power dynamics and a culture shift that lands personally, however seasoned someone is.

So, treat every M&A as a new change journey for your people. Every single time.

While it’s true the people and culture work never really stops, it’s important to recognise that IT integration will also require complex transformation and can have an equally major impact on M&A ease, results and ultimate success.

IT integration is critical for cultural as well as technical reasons. After all, it is one of the most visible ways people experience the merger. New systems, new processes, new reporting lines and new data requirements all shape whether the transition feels joined up or fragmented.

So, when a merger gets announced, the IT workstream gets scoped, timelines get built, someone puts ‘day one ready’ on a slide and everyone nods. And like the press release that first announced the merger, the ‘day one ready’ slide is almost always optimistic.

At the start of any merger or acquisition, there’s a whole swirl of activity happening at once. Alongside the IT workstream, HR, health and safety, communications and operational teams are all moving at pace to prepare for day one. And then day one comes, and gradually those workstreams wrap up; new values get rolled out, new HR processes bed in and teams move on to the next thing.

However, IT doesn’t get to do that.

In our experience, a two- to three-year timeline is often the reality, and sometimes it’s even longer. Transition service agreements with the legacy organisation mean you’re often sharing licences, working in collaboration with a team that technically belongs to the company you’ve just acquired or merged with. In the case of ERP, that handover period alone can run to a year. And that’s before you’ve even started the actual migration.

There are also decisions to be made that nobody fully anticipates at the start. When both organisations have tools that do exactly the same job, someone has to decide which one moves forward. That decision alone can trigger a change programme, impact assessments, training requirements and a group of people who have built years of knowledge around a system they may now have to leave behind.

Which brings me to the part that is most often underestimated: IT integration isn’t a technical challenge with a people dimension. It’s a people challenge that happens to involve technology.

The systems don’t resist change, people do, and often because they’re being asked to let go of ways of working they’ve spent years building.

Behind every dataset is a person who built it, owns it or relies on it. Around every ERP system is a layer of workarounds, shadow spreadsheets and tribal knowledge that people have developed over years. When you change the system, all of that comes to the surface and you need to be ready for it, not surprised by it.

If the cultural integration hasn’t landed well before you get to this point, by the time you’re asking someone to learn a new system, adopt new processes and report differently, you’re adding to a plate that’s already full. That’s where resistance to change really comes from.

So what’s the one thing worth doing, if nothing else? Give your people visibility of the roadmap. Let them see what’s coming, what role they’ll play in it, and how long it’s genuinely going to take. A clear view of that three-year integration programme, the sequencing of applications, the big ERP project on the horizon, all of it, helps people stay focused. It sets expectations honestly, and it brings people along with you rather than leaving them to fill the gaps with their own assumptions.

And of course, as with any business transformation, and especially for one as major and complex as a merger or acquisition, ensure all leaders are actively and visibly working towards an agreed North Star, your people are engaged, informed and involved, and they are being empowered with the learning and capability they need to thrive in the new merged organisation.

We could, and probably have, written entire Insight articles for every one of those key steps, so be sure to explore our full library for more practical guidance – this how-to for merging organisational cultures goes into more depth if this is a focus area for you.

Remember, when it comes to M&A, the technology will do what it’s designed to do. Whether your people will depends on how well you’ve brought them along.