Avoiding Common M&A Pitfalls: Three Key Strategies to Maximize Value

It has never been more critical to get post-M&A value creation right. With markets in a state of protracted uncertainty, businesses are more cautious about deploying capital and less patient for concrete returns. M&A activity continues in the pursuit of both revenue and margin growth, but only the most focused operators can achieve each deal’s potential on short timelines and tight budgets. 

We consistently see companies leave value on the table: they fail to reach their goal for value realization, don’t reach it in time, or back away and hedge due to a lack of confidence in the investment thesis. In the end, closing these gaps falls to the business leaders tasked with running the post-deal entity. Here are three key strategies to close those gaps. 

Conversations with business leaders involved in post-M&A activities revealed three crucial yet often overlooked factors—referred to as executional gaps—that executives must address to successfully achieve the value of the deal. 

1. Leaving customer-facing leaders out of the loop 
2. Deals with no value story 
3. Rigid talent models that erode people value (talent and culture) 

Gap 1: Leaving Customer-Facing Leaders Out of the Loop 

For practical and legal reasons, deal teams typically operate with secrecy. This leads to scrambling across the organization when a deal nears announcement. Marketing, communications, and talent teams often become disconnected, resulting in lackluster strategies. This inefficiency puts a time lag on customer-facing decisions and can result in the wrong decisions being made. Brand changes, go-to-market portfolio construction, talent integration plans, and other high-level decisions end up being led by an isolated deal team rather than in partnership with the organization’s functional experts. 

One M&A leader at a large healthcare company said: “Customer value isn’t realized until much later on because it isn’t planned for. [You are already] considering customer [downside risk] in the deal valuation, [why can’t the upside potential] be considered and planned for as well?”    

Recommendation: It’s unnecessary to complicate the M&A process by adding members to the team during due diligence. Instead, build a new step or action within the playbook to pulse out information from the core deal team directly to operating teams when moving toward close. This will help line leaders immerse themselves in the deal thesis and adopt accountability earlier in the process.

Gap 2: Deals With No Value Story 

Just because deal teams and capital committees understand the value creation thesis; it doesn’t mean that the deal has a value story. Ultimately every audience affected by the deal will need to know how this deal is adding value for them. Yet, internal and external stakeholders often receive very different versions of the story, if they hear anything at all. These fragmented stories don’t always connect, functioning like “point solutions” that speak to the short-term implications for a specific team, rather than amplifying the impact of the deal through a consistent, cohesive narrative that flexes across audiences and still ties back to a single core idea. 

One M&A leader underscored that “the deal story aligns the organization, and it gives them the fuel to change, doing the hard work to realize the value at the core of the deal premise.” This reflects what we’ve seen in market with acquisitions like Danaher’s acquisition of GE Lifesciences. Danaher had a unified plan and story for the acquisition, clearly creating a cohesive message that flows through each key audience. Danaher understood how the entire GE asset – from technology and product portfolio to customer relationships and brand equity – would combine into a powerful new life sciences operating company well before the deal’s close. That plan was then echoed to leaders across the company and into the marketplace. In the end, that cohesive story powered a new operating company, Cytiva, which was central to Danaher’s 110% share performance in the two years following the close of the deal.

Recommendation: Identify an expert, usually from the marketing, brand or communications team, to develop a story of value with the help of a cross-functional team communicating to different audiences. Marketing might personalize the core story for customers while investor relations might develop messaging aligned to what investors are looking for. The communications team might tweak the message for partners and Human Resources might build a North Star narrative for employees. While each message might be slightly customized for the intended audience, each must ladder up to an overarching message to drive alignment and spark value creation. 

Gap 3: Rigid Talent Models That Erode People Value (Talent and Culture)

While it’s critical to capture value by addressing internal synergies post-close, it’s also important to de-risk the integration plan by recognizing the unique cultural and talent contributions the acquired team brings. The asset likely carries new capabilities, usually with hard-to-hire skill sets which must be thoughtfully redeployed in the post-close entity. Moreover, if it was a successful operation before being acquired, it would have been fueled by a unique culture that needs to be acknowledged, and potentially leveraged as a touchstone for renewal or transformation.  

Several M&A leaders echoed this perspective saying, “If the primary driver of value is something tangible, the culture is overlooked because it is hard to value,” “If you force rigidity on a company, that drives culture mismatch, and it skips over the secondary value question of if the talent and culture could improve your own,” and “If you say ‘hey we love your asset,’ you need to consider the culture and people that created that asset, or you have blinders to the full value of it.” They also spoke to the importance of HR leaning in, as their insights can be critical to understanding what employment shifts will resonate within a company.

Recommendation: Build an employee ignition module into the playbook to build a human-centric strategy for retaining and activating the talent and cultural assets acquired in the deal.

Tech companies have adopted this approach; recognizing the significant value of the talent assets they are acquiring. Apple maintains an acquisition pipeline primarily looking for top talent from the acquired business or redeploy throughout their earn-out tenure. Apple views the acquired talent as a flexible, scalable asset to be used to drive growth well beyond the specific team or company in which they entered the firm. This flexibility not only lowers talent acquisition costs but also serves as a new “Talent Model” lever for value creation, speeding up value realization by applying the strongest talent to the most critical tasks.