The Cost of Being Fair in Post-Merger Integrations

I’ve led post-merger integrations ranging from $29M to over $1B. We got through them. We delivered the synergies, kept the businesses running, and came out the other side. But it wasn’t without problems—some of them significant, many of them avoidable in hindsight.

I’m not going to name companies or get into specifics. The failures were collective, and many of the people involved are colleagues I still respect. But looking back, the mistakes we made fell into predictable patterns, and the lessons are worth sharing. If I were to do it again, there are things I would do very differently.

The pattern that stands out most clearly is this: in every case, we had the right values but the wrong instincts about what those values actually required.

The Playbook That Doesn’t Work

The conventional wisdom on post-merger integration sounds sensible enough. McKinsey recommends “understanding and assessing culture” with “a comprehensive approach.” BCG advises “thorough cultural assessments” and “a systematic, analytical, and practical approach” to addressing differences. The general playbook is basically this:

• Assess both cultures carefully
• Identify the best of both organizations
• Balance leadership across both sides
• Communicate constantly, and
• Take time to make data-driven decisions

It’s what the consultants recommend. It’s also, in my experience, a recipe for drift.

Fair, thoughtful, data-driven, respectful—we should want all of these things. In practice, this translates into a set of behaviors that feel sensible. We take our responsibility to the business seriously by being careful and analytical. We take our responsibility to the people seriously by being thoughtful about decisions that will affect their lives. We take time, gather information, and try to balance competing interests to make choices that people will see as legitimate.

These instincts aren’t wrong in principle, but they lead to outcomes that are almost always damaging in practice. Because while we’re being thoughtful, people’s anxieties and vulnerabilities are left to simmer and potentially come to a boil. Not everyone acts like a grownup during an integration: the stakes are high and the uncertainty can be threatening. Just like nature, integrations abhor a vacuum. The vacuum we create by letting time pass without clarity ultimately gets filled—by politics, by fear, and by self-preservation. The longer it goes on, the harder it becomes to knit the two organizations together and get back to business as usual.

BCG, to their credit, acknowledges what happens when we don’t move decisively: “When cultural differences are not tackled from the start—overtly and with a clear plan—employees will cling to their legacy-company identity. This forces the new entity into perpetual integration mode, unable to move ahead as a newly constituted organization.”

Perpetual integration mode. That’s exactly right. And I’ve watched it happen.

A recent HBR piece put it more bluntly: “Mergers fail to achieve their potential because management moved too slowly to realize the deal’s top-line growth potential. Acquirers are often slow—shockingly slow—to integrate.”

My experience confirms this, but I’d go further. Speed is part of the problem, but it’s a symptom, not the cause. The cause is the instinct to be fair and analytical—to balance leadership, to blend cultures, to give acquired teams autonomy, to make wise decisions that are objectively and emotionally best for the business. These instincts feel responsible. They feel humane. And they create exactly the conditions that cause integrations to spiral.

Be Honest About the Power Dynamic

When a larger company acquires a smaller one, it is not a merger of equals. Some things from the smaller company will be preserved, namely the capabilities or tech or market position that justified the acquisition in the first place. But much of the rest will be replace by the way the larger company works, and those elements usally matter a lot, like compensation and benefits, territories, scope of roles, reporting structures, and so on. People need to understand this reality from the start.

The longer we delay that honesty, the more people cling to the hope that their way of doing things will survive intact. When it becomes clear that this isn’t happening, the reckoning is worse for having been postponed. People may resent the fact that their company has been acquired, but there is a point where not addressing this becomes untenable.

I’ve watched this play out. We gave an acquired team significant autonomy out of respect for what they’d built. They were good at what they did, and we didn’t want to disrupt that. What we actually did was leave them with all their relationships, their expertise, and their identity intact—but no real stake in the combined company’s success. When the friction mounted, they had everything they needed to leave. And they did. They started a competing company and they’re thriving.

We thought we were being respectful. We were funding our own competition.

Being direct from the start is harder in the moment. It is also kinder in the long run.

You’re Going to Break Things Anyway

The instinct to be thorough comes from a good place. We want to gather information, consult stakeholders, and build consensus before making decisions that will affect people’s careers and livelihoods. But that instinct has a cost, and it compounds with every week we remain in deliberation.

Integrations are disruptive by nature. The question is not whether things will break, but whether we can learn just enough to avoid the big potholes and move through it quickly, or let it drag on while the organization slowly bleeds out. Every week spent in limbo is a week where people can’t commit to a future that hasn’t been defined and where they continue to operate as they did pre-deal. Indecision provides fertile ground for politics, and even the people who are not political get frustrated. The best of them—the ones with options—start thinking about what’s next.

Delay strengthens competitors as well. Integrations are gravity wells for a company’s energy and resources, sapping the business of people who would ordinarily be working to pursue its goals. In some cases they directly create revenue and retention headwinds as clients of both legacy businesses confront different pricing, products, and contracting practices. The longer the “in-between” stage of an integration, the easier it is for competitors to woo clients away simply by promising certainty and stability.

In my own integrations and others I’ve seen closely, companies spent weeks, even months, trying to make “objective” decisions about which systems to keep, which processes to adopt, which leaders to retain. By the time decisions were made and implemented, the damage was done. Key people had already checked out. Factions had already formed. Customers had reduced spend, even churned. Whatever the reasons for the delay, it caused employees, competitors, and clients to draw conclusions and make choices that were not in the company’s interests.

The cost of waiting almost always exceeds the cost of being wrong. Integrations drain massive energy from the ongoing business. The goal is to get through the transition as fast as possible so that people can get back to what actually matters: serving customers, driving growth, and executing on the strategy that justified the deal in the first place.

Culture First

The best culture you can build is one driven by leadership team that is genuinely committed to making the combined company work—even when “their side” loses a decision. Notice that nowhere in that sentence is there any reference to numerical equality. Indeed, trying to balance leadership representation across both organizations without any concern for cultural fit is completely and utterly wrong.

It is exceedingly rare to find leaders that are ego-free and magnanimous. And the clearest signal of whether an organization has them is the CEO. Culture comes from the top. If the CEO and senior leaders are not aligned on both business and cultural prioritioes, nothing below will cohere. You’ll get factions, competition, and endless relitigating of decisions that should have been settled weeks earlier.

We tried to be equitable about leadership. Balanced representation from both sides at every level. What we got a very lengthy period of poor execution and political maneuvering. Every decision became a proxy battle for whose side would prevail. The leaders we thought we were lucky to inherit—the ones who looked great on paper—turned out to be better at politics than operations. The people who just wanted to do good work grew frustrated and disengaged. The ones with options left.

Pick the culture early. Appoint leaders who embody it. Let that be the North Star, and accept that some people won’t be able to make the journey. Trying to blend cultures or balance representation in the name of fairness just creates ambiguity, and ambiguity is where politics thrives.

Cut Early and Cut Once

If the deal rationale requires headcount reductions, make them quickly. You will not get them exactly right. Some good people will leave who shouldn’t have. Some roles we cut will need to be refilled later. That is the cost of moving fast, and it is orders of magnitude lower than the cost of moving slow.

Layoffs are dark clouds that hang ominously over an organization. They make people operate defensively. They bring progress to a halt: we can’t hire into new roles because we’re still evaluating existing ones. Growth initiatives and even business-as-usual work get shelved because resources are tied up in transition. The longer the uncertainty persists, the deeper the damage becomes.

Make the cuts. Let people grieve. Then start building again. The anticipation of pain is almost always worse than the pain itself.

One more thing: yes, we can try to buy loyalty with retention bonuses. But if we’re paying to keep the wrong people—the ones who interview well but don’t execute, or who are already mentally planning their exit—we’ve just bought ourselves a slower, more expensive version of the same problem.

Saying Goodbye

None of this is painless. Acquisitions fundamentally end things that people cared about—teams they built, cultures they belonged to, ways of working that gave them identity and purpose—even for the acquiring company. The instinct to slow down, to soften the blow, to give people time to adjust comes from a good place.

But prolonging ambiguity isn’t humane. It just extends the suffering.

The kindest thing we can do is give people clarity as quickly as possible. Acknowledge that something real has ended. Create space for people to mourn what they’ve lost. Then help them shift their allegiance to what’s being built.

This doesn’t happen overnight. People don’t flip a switch. The ones who were loyal to the old company, the old team, the old way of doing things—they need time to grieve. But they also need a reason to commit to the future. The faster we can define that future and demonstrate that it’s worth believing in, the faster they can make the transition.

What doesn’t work is leaving them in limbo, waiting for clarity that never comes, wondering whether their job or their team or their way of working will survive. That isn’t kindness. It’s slow cruelty.

The Real Lesson

Reading this, you may think I’m advocating for ruthlessness. In a sense, I am.

What I’ve learned from leading these integrations is that they are invariably hard and utterly imperfectible. There is no version of this that doesn’t involve pain, loss, and difficult decisions that affect people’s lives. The consultants’ playbook—assess carefully, balance fairly, take time to get it right—doesn’t eliminate that pain. It just spreads it out and makes it worse.

The primary objective has to be to get the combined business back to business. You will make mistakes. You will get things wrong. That’s not a failure of execution—it’s the nature of the thing. The choice isn’t between getting it right and getting it wrong. It’s between being less wrong quickly or more wrong slowly. The fair and analytical approach doesn’t intrinsically reduce mistakes—it almost surely adds the cost of delay to the mistakes you were going to make anyway.

Be honest from day one. Know that you will get a few things wrong regardless of how fast you decide, and know that time is not free. So choose quickly. Pick the culture and the leaders who embody it. Make the cuts early and make them once. Give people clarity so they can grieve what’s ending and commit to what’s next.

Will people call it ruthless? Probably. But the alternative—weeks and months of drift, politics, and slow cruelty disguised as fairness—is worse.

The damage doesn’t come from moving too fast. It comes from trying too hard to be fair.