Mergers (& Acquisitions) Aren’t About the Numbers. They’re About the People.
Photo credit: Mark(ing) Time Photography | "Tasmanian Sunrise"
Why most deals stumble before they even start. But you don't realise until a few years later
When I talk to most owners about mergers, joint ventures, or capital partnerships and the conversation jumps straight to valuation, synergies, and growth. But here’s the thing: financials don’t derail mergers. People do.
It’s the hidden dynamics ... ego, fatigue, legacy concerns, culture cracks ... that decide whether a deal creates momentum or chaos. Ignore them, and we’re just swapping old problems into a bigger, more expensive environment.
We see it first-hand (a lot): businesses that look perfect on paper stumble because they never faced the human questions first.
What running and running a business taught me about mergers
I’ve run enough ultras to know the finish line isn’t the problem. The real test is what happens along the way. When the blisters come, when your nutrition goes wrong, when fatigue kicks in and your head starts arguing with your legs (and lord knows they argue!).
That’s what most businesses miss about mergers. They obsess over the finish line (valuation, market share, scale)… but forget the human reality of what it takes to truly get there.
In a recent boardroom session, we asked a group of owners the questions no one likes to say out loud:
What legacy are you really protecting?
How much fatigue is already in this system?
Do you actually trust each other enough to lead something bigger?
What happens when personal timeframes don’t line up?
The room got quiet. Not because they disagreed, but because those are the questions that actually matter. And they take some time and care to think through – we love helping businesses find that time, create the space, and think these through.
As my business partner – Brendan Johnson – says: “Achieving economies of scale is a critical goal for any merger or acquisition ... however making the merger stick, means firstly gaining alignment and buy in from the people to want to work together and embrace the change needed.”
The real work before you even open the spreadsheet
If you’re an owner thinking about a merger, JV, or capital partner, here’s our recommendation for the non-negotiable checklist:
Start with non-negotiables. Be clear what you will walk away from if it’s not met: governance, culture, people treatment, audit protection, whatever it is. If you don’t know, you’re negotiating blind.
Separate ownership from leadership. A bigger entity can’t be run by committee. Decide the governance model first, or risk doubling complexity overnight.
Surface the human drivers. Legacy, ego, succession timelines, appetite for change ... these are the forces that make or break alignment. Call them out, and do it early.
Distinguish decision gates from details. Leadership and remuneration models = decision gates. Office locations and brand names = solvable details. Don’t confuse the two.
Test alternatives. A merger isn’t the only path. Organic growth, alliances, JVs ... sometimes they solve the problem with less pain.
Final word
Too many firms let ambition outrun alignment. They chase growth, scale and succession without asking if the humans leading it are truly ready.
Numbers matter. Of course they do. But that’s often the easier part.
The real due diligence starts with vision, values, and behaviours. Get that wrong, and the best spreadsheet in the world won’t save you. Because at the end of the day, mergers aren’t about the deal you sign. They’re about the people you walk into it with.
+++++
We love to give away what we see and know works. I hope you can use something in here to help move your business along. Because better advice businesses build a better profession. And a better advice profession builds a better Australian community.
