From our research at CEB, now Gartner, we know that most mergers and acquisitions are not clear successes. As with other forms of major enterprise change, there are many possible reasons why two companies might fail to integrate: culture clash, product mix-ups, stalled growth, complex technology integrations, and so on. According to INSEAD professor Quy Huy, another reason M&A can fail is because the communication plan is overly positive and too frequently impersonal.
Huy believes that part of the problem is what he calls the “trap of professionalism,” a symptom of modern corporate culture in which negative feelings are suppressed and politeness is overvalued relative to raising constructive tensions that can improve ideas. Additionally, once disagreements bubble to the surface, the response is often more rosy messaging rather than straightforward attempts to discuss and address any issues.
Huy discovered how this dynamic of productive disagreement plays out in the context of M&A by interviewing 73 managers across both organizations involved in an acquisition. At first, both sides were excited by the possibilities of their merger. The acquirer saw value in gaining specialized expertise within its walls and the acquired company was excited about having the resources to take on more ambitious projects. But tension quickly arose, initially due to differences in the philosophy of each organization’s sales strategy, and later due to challenges in IT integration.
The issue wasn’t that these tensions existed, but that they were never discussed or addressed.