This is NOT how I would do it...

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An acquirer and seller, often a founder, always have great intentions when entering a deal.

A major hurdle in M&A integrations is overcoming the resistance of leaders who are stuck in the ways they used to run things. It’s natural for senior executives to have a strong sense of ownership over their past successes. After all, many of them built the acquired company into something valuable enough to attract a buyer. But the reality is that when a company is acquired, it’s often because the acquiring company believes it has a better path forward.

For senior leaders who are being retained, this means embracing the new strategy wholeheartedly, even if it differs from what they would have done. Leaders who constantly whisper in the halls, “Well, I wouldn’t do it that way,” or “Back when we were in charge…” create an atmosphere of doubt, which can undermine the entire integration effort.

One of the key factors in deciding whether to keep senior leadership is assessing whether they can let go of the past and fully commit to the new direction. If a leader is still holding on to how they used to run things, or if their ego prevents them from supporting decisions they didn’t make, they’re likely to become a liability, not an asset.

Warning Signs:

• Leaders who openly or subtly criticize the new strategy.

• Leaders who create factions within the company by sticking to old ways of doing things.

• Leaders who struggle to follow new directives because they believe their approach is better.

On the other hand, leaders who show that they can embrace the new culture, align with the new strategy, and rally the team behind it, are worth keeping. They can help smooth the transition for employees and act as a bridge between the old and the new.

Drinking the Kool-Aid: Full Commitment or Resistance?

When deciding whether to keep or thank senior leaders for their service, it comes down to a fundamental question: Are they willing to drink the Kool-Aid?

This doesn’t mean blind loyalty or abandoning critical thinking. It means having the emotional intelligence to understand that they are now part of a larger organization with a new direction—and that success depends on their ability to champion that direction. Leaders who are on board with the new strategy and who use their influence to get others on board will help drive the integration forward. Leaders who are reluctant to fully commit will hold it back.

One of the worst outcomes in an acquisition is to have senior leaders who are technically still “in charge” but are only half-heartedly supporting the new direction. Employees take their cues from leadership, and if senior leaders are not fully committed, it will create confusion, frustration, and a lack of trust in the company’s future.

How to Spot Leaders Who Are All In:

• They actively promote the new strategy and align their team around it.

• They are vocal supporters of the acquiring company’s vision and are willing to adapt their own ways of thinking.

• They foster collaboration with new colleagues and leaders, recognizing that success now depends on collective effort.

When It’s Time to Thank Them for Their Service

In some cases, no matter how talented or accomplished senior leaders are, the best decision is to thank them for their service and part ways. This is often the case when:

• The acquired company’s leadership is too tied to their previous autonomy and struggles to adjust to a new corporate structure.

• Their vision and values are fundamentally misaligned with the acquiring company’s.

• Their continued presence might create division or slow down the integration process.

Letting go of senior leaders can be a difficult decision, especially if they have built the acquired company into something valuable. However, if they can’t align with the new direction or if their ego prevents them from playing a supportive role, keeping them around can be more harmful than helpful.

When to Retain Senior Leaders

On the flip side, there are scenarios where retaining senior leadership is critical for success. This is particularly true when:

• The acquired company’s leadership has deep institutional knowledge that is crucial for the integration.

• They have proven that they can adapt and collaborate within the new corporate structure.

• Their leadership is respected by the workforce, and their presence can provide continuity and stability during the transition.

In these cases, retaining senior leaders can ensure that valuable knowledge isn’t lost, and it can help maintain morale among employees who trust and respect these executives.

Final Thoughts: A Delicate Balance

Deciding whether to keep or part ways with senior leadership in an acquisition is a delicate balance. It requires assessing not only their skills and track record but also their personality, ego, and willingness to adapt. Ultimately, the success of an M&A depends on leadership’s ability to align with the new direction and help others do the same.

Leaders who can adjust to a new role, embrace the new strategy, and leave their egos at the door are invaluable in driving a successful integration. Those who can’t may need to hear, “It’s not us, it’s you,” as they’re shown the door.

What do you think about the challenges of retaining senior leadership during an acquisition? Let’s discuss in the comments.

Until next time – Stay strong, stay focused, stay sane, and stay the course. It is all going to be ok…