Part 4 of a four-part series on integration, value destruction, AI, and leadership
(You can read the related articles at the end of this post)
In the earlier blogs in this series, I explained why I have been spending time with firms and teams several years after their acquisitions, particularly organisations we have worked with from technology due diligence through to post-merger integration.
Those conversations revealed something both simple and uncomfortable. Outcomes are binary.
Either the deal worked and people are broadly happy.
Or it didn’t, and the problems are still visible years later.
In this final blog, I want to focus on the common denominator behind those outcomes. Not systems. Not process. Not even AI.
Leadership.
When M&A works, it works for people
The most positive post-acquisition stories are remarkably consistent.
The P&L performs.
Systems are efficient rather than tolerated.
And people have moved well beyond the limits of their former SMB.
The examples are striking.
A head of policy in a small business is now the head of compliance in a seven-thousand-employee organisation.
A project manager delivering small implementations is now the global head of PMO for a software firm.
These individuals did not suddenly become more capable. What changed was context, sponsorship, and leadership intent.
This is the part of M&A that is rarely talked about. When it works, it allows the buy side to take entrepreneurial risk on people as well as products. And it gives ambitious employees access to scale, complexity, and careers that were previously unavailable.
When integration fails, the signals are human first
In less successful integrations, the story is very different.
The P&L struggles.
Systems are described as a daily frustration.
And staff talk in a careful, guarded way about “them” and “us”.
What is notable is that this tension is rarely loud. It is quiet, persistent, and corrosive. Years after the deal, people still identify themselves as coming from “the acquired business”.
At that point, the problem is no longer integration. It is identity.
Why leadership is the fault line
Across all the post-acquisition conversations, three leadership failures show up repeatedly.
1. New management does not automatically mean good management
In many SMB acquisitions, founders leave.
That founder often carried the vision, the energy, the cultural glue, and the appetite for risk. All of which can be uncomfortable for more operational leaders.
What replaces them is not necessarily bad leadership, but often leadership optimised for stability rather than growth. Promises made during the deal become difficult to fulfil. Decision-making slows. Risk appetite drops.
People describe this shift in simple terms.
“They have the keys to the car, but don’t really know how to drive it.”
As explored in Blog 2, this is often where value destruction begins.
2. People no longer know what “good” looks like
Once an SMB becomes part of a larger organisation, expectations change overnight.
The business needs to grow faster.
Reporting needs to be more precise and more frequent.
Governance increases significantly.
For teams used to operating with autonomy and speed, this creates confusion rather than clarity.
They arrive at meetings labelled as unprepared.
Trust erodes quickly.
The “them and us” dynamic accelerates.
The sell side experiences the buy side as complex and non-communicative.
The buy side starts to worry about competence.
In reality, neither side is wrong. Leadership has failed to reset expectations and provide the scaffolding required to succeed at a different scale.
3. Not enough time is spent together
This issue has become more pronounced since remote working became normal.
SMB teams tend to know each other well.
They do not know the larger organisation.
Meanwhile, the buy side sees value eroding but lacks context. Without shared time, assumptions replace understanding. Distance hardens into mistrust.
As discussed in Blog 3, this becomes even more damaging when AI and automation are deeply embedded into daily work.
What the evidence supports
This lived experience closely mirrors external research.
McKinsey & Company has consistently shown that leadership alignment and cultural integration are among the strongest predictors of post-deal success, yet are often underweighted compared to financial and operational considerations.
Harvard Business Review has repeatedly noted that acquirers tend to underestimate how disruptive changes in leadership style, governance, and expectations can be, particularly for high-performing teams accustomed to autonomy.
What these studies rarely capture is the long-term human impact. Who thrives. Who leaves. And who quietly disengages.
Three leadership fixes that actually change outcomes
Across integrations that created positive long-term outcomes, three leadership behaviours stand out.
1. Coach the management team or replace them
If the post-deal leadership team is open to coaching, invest in it properly.
If they are not, act decisively.
Hope is not a leadership strategy.
2. Make it explicit what “good” looks like
Do not assume people understand how to operate in a larger organisation.
Show them.
Introduce documentation, tools, and processes deliberately.
Ensure there are named individuals whose role is to help, not police.
This is not hand-holding. It is performance enablement.
3. Spend time together. This is non-negotiable
Not steering committees.
Not quarterly updates.
Actual time together.
Trust does not form through dashboards.
Closing the series
If there is one theme running through this four-part series, it is this.
Integration outcomes are rarely about intent.
They are about design.
Value destruction, AI complexity, and morale issues are symptoms. Leadership decisions are the cause.
As we move towards 2026, corp dev teams that succeed will not be those with the most detailed PMI playbooks. They will be those that take leadership design as seriously as valuation and recognise that integration is ultimately a human endeavour.
When that happens, M&A does not just create shareholder value.
It creates careers.
References
- McKinsey & Company – Why Managing Culture Is Critical for Value Creation in M&A
https://www.mckinsey.com/capabilities/m-and-a/our-insights/why-managing-culture-is-critical-for-value-creation-in-m-and-a - McKinsey & Company – Merger Management Compendium
https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/merger-management-compendium
