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When Cultures Collide: Why Most Mergers Fail

InciteMarch 27, 20253 min read

When two companies merge, it’s never just about combining resources and operations—it’s about bringing together two distinct workplace cultures. That’s where things get interesting. While mergers open doors to new opportunities and growth, they also come with challenges that even the most experienced leaders need to navigate carefully. We know that most mergers fail— about 70-75% of them in fact. Two US-based researchers wrote a book on it just last year. It’s called The M&A Failure Trap: Why Most Mergers and Acquisitions Fail and How the Few Succeed and it’s worth a read.

With that sobering statistic in mind, when we partner with a client on a merger or transaction, we consider the complexities beyond coordinating financial and organizational logistics.

Communications Make or Break Your Integration Strategy

This is where communication takes center stage. A solid communication strategy does more than just keep people in the loop—it helps ease concerns and set the stage for a smooth transition before, during, and after an acquisition. The way you communicate can make or break a merger, especially when it comes to culture.

Here are two reasons why it’s important to strengthen communications before the integration:

  • A merger or acquisition is a big change, and your company culture will be affected. This is especially true when two companies have conflicting values and beliefs.
  • When employees don’t have the information they need, they will naturally fill in the gaps.

Effective communication helps manage expectations while keeping employees engaged, leading to less resistance and a greater sense of trust throughout the process. But a well-structured communication plan requires a thoughtful, adaptable, two-way approach.

Strategies for Culture-First Communication

While the importance of communication is clear, success depends on how you approach it. A generic or reactive plan won’t cut it—your strategy must be proactive, transparent, and aligned to your culture goals from the start. Here are some of the key strategies we use to help clients communicate with clarity and confidence throughout the M&A journey:

  • Planning regular updates – this instills confidence for all impacted parties, resulting in higher productivity and ongoing development.
  • Leaning into transparency – especially around difficult topics, which will set you up as a reliable and respected employer.
  • Preparing for responsiveness – you will get asked the tough questions and you’ll need to be responsive AND prepared to reassure those affected by the merger.
  • Arming your team with key messages – consistency in messaging across all channels will prevent confusion by ensuring everyone receives the same information.

Sustaining Alignment Through Post-Merger Communication

Once you have a plan in place that you can action in the transaction lead up, you need to ensure you’ve got one that can account for the inevitable post-merger culture shift. You could take all the right steps in terms of communication in the initial stages – announcing the merger, explaining the reason for the merger, answering questions about the merger—but how you handle things afterwards is equally, if not more, important. Many businesses overlook the importance of keeping the lines of communication open long after the initial announcement and into the integration itself.

So how can you foster successful cultural integration in the wake of a merger?

Once the merger is complete, you’ll want to continue being clear in your communications and keep the dialogue open for employees to voice concerns (or victories). This includes regularly assessing workplace diversity and monitoring employee and customer sentiment. You should keep employees actively involved after the merger with regular town halls, workshops, input sessions, newsletters, and check-ins to address issues and boost morale.

By promoting openness, connecting company identities and values, and handling concerns with empathy, businesses can truly set the stage for lasting success. Remember, a company is only as good as its people. The better you communicate, the higher the chances for a stronger, more unified organization.

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