Acquisitions always remind us of weddings, and not merely because they tend to cost much more than budgeted and get derailed frequently by emotional outbursts. Rather, it’s because the event commands 95% of our attention and the “happy together” part is buried in the paperwork.

As with weddings, mergers and acquisitions are merely one step in a process that we intend to yield benefits for a lifetime. Unlike weddings, the honeymoon period can be incredibly brief for newly united companies; and by “brief,” we’re talking about hours or days.

By its nature, M&A is an insular business, with a fervid desire for secrecy on all sides. Owners don’t want anyone to know they are considering a sale, while buyers want to control the process and obtain exclusivity whenever possible. Information is capital in the transaction, and nobody on either side wants to hand over capital without a return.

Once the transaction is announced, though, it’s tough to pivot from the cone of silence to an all-out positioning battle. While the due diligence process brought a few outsiders into the tent, the tendency to close ranks, and communications, carries over into the post-closing world. The parties put together a news announcement, heralding the “added benefits for our customers,” “strengthened market share,” and “utopian unicorns of synergy.” HR will assure employees that the transaction offers “new opportunities for advancement,” “increased access to critical technology” and “free ponies for everyone.”

And then it’s back to work. Or, it’s back to work for everyone on the merger team. For those who weren’t on the inside, for customers and, especially, for competitors, the work is just beginning. Almost immediately after the deal is announced…

  • Competitors will check in, “just in case,” with key clients of the acquired firm, and those clients will be much more open to considering a change than they were the day before. Why? They’ve seen what happens to service quality at banks, airlines and other organizations when there’s a merger. The press releases all talk about “synergies” and “expanded services,” but their experience has been far from favorable. Clients will anticipate staff cutbacks, more restrictive practices, reduced service levels, new logins and passwords, and other headaches. They expect to be dealing with an entirely different company, no matter what the press release says, so they will be open to a conversation with a competitor. Just in case.
  • Customers who were buying from both companies in the past will begin looking for a new vendor. Often, those customers want at least two vendors for the flexibility, price competition, and risk reduction that multiple sources can provide. In these cases, the merger is practically guaranteed to reduce the combined relationship value of those customers, and open the door to competitors.
  • Employees, including some senior people, will anticipate the worst. Senior people who were not part of the negotiation process will suddenly realize that they aren’t as senior as they believed yesterday. They’ll start to wonder about their future with the combined organization, and they’ll become more open to a new career path. Mid-level and lower-level staff members will update their resumes, during business hours, of course, and the most valuable of them will inevitably be the first ones to receive a better offer. Even if the companies announce that no staff changes are anticipated, that assurance is unlikely to carry a ton of credibility for most of the team. They’ve heard this story before.
  • Productivity will decline as the rumor mill shifts into high gear. Staff members will engage in lengthy conversations about how the deal was done, whether the buyer or the seller was the greater fool, the lack of direction for their department, the new boss they hate even more than the last one, and how unlikely they are to see any benefits for themselves.
  • Management of both companies will continue to be focused on an insular process—integration—after spending months in the insular process of the transaction. Three months after the merger, they will be surprised at the level of staff defections and client loss, but they’ll chalk it up to the unavoidable near-term disruptions of a merger.

These disruptions, and their costs, aren’t unavoidable, however. Because the challenges are predictable, they can be planned for and addressed in advance. Some of the questions that can be addressed long before the close:

  1. Which of our customer relationships will be most strategic for the combined companies, and how can we protect these relationships?
  2. Which of our A-List customers are likely to view this deal negatively, and how can we persuade them to stick with us?
  3. Which groups of customers will no longer be key to our combined organization, and what steps should we take to find new homes for them?
  4. What will define our A-List customers in the new organization, and where/how can we find more customers who fit this description?
  5. How can we use the integration and consolidation process to address issues of pricing, commissions, and misdirected branding/marketing initiatives?
  6. Who will deliver the message to customers, how will they deliver that message, and how much money do we need to set aside to ensure retention of our most important clients?

Despite all the work that goes into making a deal happen, the day the deal is announced is also the day that its value starts to decline. That decline is not inevitable, though. With effective preparation, the announcement can herald the beginning of a great new life together.


Quadrant Five taps the full potential of strategic customer relationships to build both today’s profitability and tomorrow’s exit value. We make the critical connection between internal financial drivers and the value perceptions of A-List customers, generating returns for clients who must:

  • Identify the shortest path to stronger profitability.
  • Build enterprise value in advance of a liquidity event.
  • Develop a strategic plan that can be implemented successfully.
  • Perform customer/market due diligence on an acquisition target.
  • Accelerate profitable integration of a merged business.
  • Protect against customer turnover or lost sales.
  • Recoup the cash that is wasted on unprofitable marketing/sales initiatives.

To learn more, please contact Michael Rosenbaum ( or visit our website (

Written by Michael Rosenbaum on May 1st, 2016. Posted in Performance Improvement, Strategic Insights

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