The People Side of M&A, Part 3: What to Do When the Cultures Don’t Align

In diligence, it’s easy to fall in love with the numbers and ignore the cultural warning signs. Strong revenue, complementary product fit, and promising synergies can make it tempting to downplay differences in how people work, lead, and make decisions.

But cultural misalignment isn’t a cosmetic issue. It’s a structural one. And if you don’t address it pre-close, you’ll feel it post-close, in retention problems, change resistance, leadership conflict, and lost momentum.

So, what should you do when the culture doesn’t quite fit?

Step 1: Assess the Nature of the Misalignment

Not all cultural differences are dealbreakers. The question isn’t “Are we the same?” it’s “Can we operate together effectively?”

At Rhizome, we coach clients to assess cultural gaps through three lenses:

🔹 Degree of Difference

Are the differences complementary or incompatible? A founder-led company with a highly informal culture can coexist with a structured acquirer, if both sides are open to flex. But if one side is consensus-driven and the other demands rapid top-down decisions, that may create friction at every turn.

🔹 Strategic Relevance

Does the misalignment touch areas critical to the value thesis? If you're acquiring a company for its innovative product team, but that team is culturally risk-averse or change-resistant, the misalignment matters more than if it’s confined to back-office norms.

🔹 Willingness to Adapt

Is either side open to evolving? Culture is changeable but only with intention. If both leadership teams are open to designing new norms together, misalignment is a solvable problem.

Step 2: Revisit Your Deal Thesis

If you’ve identified meaningful misalignment, it’s time to ask the hard questions:

• Can we still achieve the strategic goals of this deal with the current team and culture in place?

• Will cultural friction increase integration costs or delay realization of synergies?

• Does this change our assumptions around talent retention, execution speed, or customer experience?

Let me share a real-world example.

I worked with a company that had just completed a merger where the deal thesis was built almost entirely on cross-selling.

• Company A had deep customer relationships and sold Product X.

• Company B had a strong install base for Product Y.

• The vision was simple: get Company A to sell Product Y, and Company B to sell Product X. Win-win.

On paper, it made perfect sense. But there was one problem: culture and compensation structure.

Company A had a performance-driven, independent sales culture with aggressive comp plans that rewarded focus and efficiency. Company B’s go-to-market was more relationship-led and conservative. When leaders asked both sides to promote the other company’s products, the response was lukewarm at best.

Why?

Because reps didn’t trust the new products, didn’t feel equipped to sell them, and didn’t see them reflected in their commission structure. Leadership believed the strategy was blocked by a training gap. But in reality, it was a cultural and incentive misalignment that hadn’t surfaced during diligence.

The result? The cross-sell revenue never materialized, and the value thesis started to unravel.

Step 3: Decide How to Proceed and Plan for It

Option 1: Proceed with a Cultural Integration Strategy

If the deal still makes strategic sense, build a deliberate culture roadmap before closing:

• Map out the key behavioral gaps

• Define shared principles and operating norms

• Identify cultural champions on both sides

• Create a communication plan that acknowledges change and supports adaptation

Option 2: Walk Away

If the cultural risks are too great, and the willingness to adapt is low, it may be wiser to step back. Culture is difficult to overhaul, especially when key people don’t see a problem.

Remember: a bad fit now won’t get better under pressure.

Final Thoughts

Cultural misalignment shouldn’t automatically kill a deal. But it should always be surfaced, discussed, and factored into decision-making.

At Rhizome HR, we believe culture is part of commercial diligence. When the numbers say “yes” but the people signals say “maybe,” it’s time to ask: Do we have the leadership, trust, and flexibility to bridge the gap?

In our next post, we’ll talk about what happens immediately after close,

and how to start aligning teams right out of the gate.