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Talent
For M&A success, bring HR into the room
Organizational design, culture and talent are critical to the success of any merger – so the CHRO should be engaged from the outset, says FGS Global’s Christine Graeff.
Rapid read:
- Involve CHROs from the outset so people and organizational due diligence inform the deal alongside financial, legal, and commercial assessments.
- Treat culture, trust, decision rights, and talent retention as execution risks; use AI insights with care when comparing employee data.
- Move quickly, design the future organization for changing business needs, and communicate consistently across internal and external stakeholders.
It has been a bumper year for M&A. Global deal value in 2026 so far has risen to $3.9tn, according to LSEG data, despite global deal value falling below $1tn in the third quarter, for the first time since the second quarter of 2025. Yet while vast sums are spent on M&A, there is an estimated failure rate of 70–90%.
Some of those failures reflect inadequate due diligence, overvaluations, or anticipated synergies that didn’t materialize. But many fail on a more nuanced point. “A deal can make complete sense strategically and financially and still fail to deliver its value,” says Christine Graeff, Global Chief Growth Officer at strategic leadership advisory firm FGS Global. Graeff argues that the reason is often organizational: “The combined business cannot make decisions quickly enough, critical talent leaves, accountabilities remain unclear, or two cultures continue operating as separate systems. Those aren’t ‘people issues’ after the deal. They are execution risks inside the deal thesis.”
As global head of people at Credit Suisse from 2022 to 2024, Graeff helped lead its integration with UBS following its acquisition in 2023 and has seen the benefits of involving CHROs early in major M&A processes.
Pulling off a successful M&A deal is like climbing a mountain – the summit is visible, but getting there is hard. Success often depends on preparation before you leave base camp.
Yet businesses remain slow to bring CHROs into the room. According to Graeff, that needs to change.
Culture can sound intangible until you translate it into operating reality.
Why the door is shut to the CHRO
One reason that CHROs may not be brought in on a deal early, says Graeff, is that they may be strategically positioned outside the C-suite. The perspective of the CEO in question will also have a bearing here. Some still hold the outdated view that people issues are irrelevant to the main deal and can be dealt with at a later stage or even after completion.
But Graeff argues that people and organizational due diligence should sit alongside financial, legal, and commercial due diligence from the beginning. Leaders must understand not only what they are buying, but whether the combined organization will have the leadership, capabilities, decision rights, and culture required to deliver the value they have modeled. For example, if senior employees leave en masse, the firm may lose talent that it cannot easily replace. Likewise, failure to understand local labor laws can result in costly, momentum-robbing litigation. And a lack of clarity about organizational structure can mean progress on key elements of a merger slows to a crawl. “That has an impact that you don’t see in the financial model,” warns Graeff.
The power of culture
But the principal reason for early engagement of CHROs in M&A is the critical role of corporate culture. For Graeff, culture is not the soft side of a transaction. It is part of the operating system of the combined company. A strategy can look flawless on paper, but if the organization cannot make decisions, retain critical talent, and establish trust quickly enough, the economics will eventually reflect it.
This is never truer than when in the middle of the M&A cycle, she suggests: “Culture can sound intangible until you translate it into operating reality. Culture determines how decisions are made, how quickly problems are escalated, whether people collaborate across boundaries, what behaviors are rewarded, and where informal power really sits. Put two organizations together and those differences become very tangible, very quickly.”
The inherent uncertainty of a merger is highly corrosive to corporate culture. The clash of two corporate cultures can damage both morale and productivity. With a new business structure in prospect, people become defensive in terms of both the processes they have built and their positions in the company.
Leaders, says Graeff, can manage uncertainty by communicating openly and extensively. This is even more important when they don’t yet have all the answers. Honesty about the current situation and the direction of travel helps keep people on board.
There is no fixed template for combining two company legacies. Very different cultures can work equally well in different contexts, points out Graeff. Takeovers are the exception, where the acquiring company’s processes often take precedence. But whatever the context, CHROs have a vital role to play in analyzing the people dimension.
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AI and the metrics that matter
Graeff suggests that CHROs are valuable in M&A in part due to their skillset and an inherent capacity to listen. “Listening. Really listening. In a merger, listening is not a soft leadership skill. It is a source of intelligence. When everyone is in ‘sending mode’ – defending their organization, their people, or their own position – the leader who listens can detect where resistance is building, where critical knowledge sits, and which issues could derail execution,” she notes.
As with other functions, historically HR worked on the basis of narrowly descriptive metrics such as full-time equivalents (FTEs) or turnover rates – engagement and trust are not simply HR metrics during an integration. They are leading indicators of execution risk. Falling trust can show up later as talent loss, slower decisions, lower productivity, and resistance to the new organization. By the time those consequences appear in financial performance, management is already late to act. “Those are precisely the things that are critical to making a merger progress faster,” says Graeff.
Here, AI changes the opportunity considerably. Its value is not simply that HR can analyze information faster. AI allows leaders to detect patterns across skills, sentiment, collaboration, and organizational behavior that would previously have been difficult to see. But more data does not remove the need for judgment. It increases it.
For example, AI can dig through employee skills profiles rapidly to give an analysis of organizational alignment and resource needs.
CHROs can also use AI as a “signal” — to tap into different sources of data to generate richer insights. For example, sentiment data from company pulse surveys can be used to monitor levels of engagement or collaboration between colleagues. In a merger, this could be critical to spotting emerging problems.
But, Graeff notes, there are pitfalls. To ensure fairness, CHROs need to think critically about the comparability of different datasets. Do competence assessments produced across teams or companies follow consistent standards? Are performance ratings objective? Was there an element of (highly subjective) self-assessment?
“It’s like depreciation in comparative financial analysis,” says Graeff. “What’s the exact definition being used? Are you looking at the same thing on both sides?” The CHRO’s role, she emphasizes, is interpreting data appropriately. “The question is not simply what the data says. It is whether the datasets are genuinely comparable, what context produced them, and what conclusions leadership can responsibly draw from them. AI can generate the signal. Leaders still have to interpret what it means.”
Graeff points out that a merger is also a rare opportunity to redesign the organization rather than simply combine two legacy structures. AI makes that question much more urgent. Which work will still require people? Which decisions can be augmented by technology? Which layers and handoffs are no longer necessary? Which human capabilities become more valuable? The mistake would be to use a merger to recreate yesterday’s organization at greater scale.
In a major transaction, inconsistency between what a company tells different stakeholders quickly becomes a trust problem.
Three traps to avoid
Graeff is clear about the biggest errors typically seen in M&A processes. First is moving too slowly. If leaders overanalyze their options, it extends uncertainty and increases lost productivity: “Speed matters because uncertainty has a cost. Every week that people don’t know who is accountable, what the future organization looks like, or whether they have a place in it creates distraction, politics, and lost productivity. You cannot eliminate uncertainty, but you can shorten the period in which the organization is trapped by it.” CHROs can help avoid wrong turns, frame key decisions, and underline the detrimental effects of delays.
The other serious mistake, Graeff suggests, is designing the future organization around the hierarchies of the past. After all, business is changing rapidly. “As HR leaders we should be asking: ‘How do we design for the era of AI? Do we still need an org chart, or will the business be more project-based?’” says Graeff.
And finally, communication in a merger is not simply about transmitting decisions once they have been made. It is part of the integration architecture. People need to understand not only what is changing, but why decisions are being made, what remains uncertain, and what the combined organization is trying to become. If leadership leaves that vacuum open, people will fill it themselves. “The internal and external narratives also cannot be separated. Employees read what investors read. Regulators see what customers see. In a major transaction, inconsistency between what a company tells different stakeholders quickly becomes a trust problem,” says Graeff.
“Having sat at the intersection of people, communications, and leadership during one of Europe’s most complex banking integrations, I came away convinced that the hardest integration questions rarely belong neatly to one function,” says Graeff. “They sit between strategy, organization, culture, communication, and execution.”
As businesses and the business environment change, the CHRO role is changing too.
In the dynamic, unpredictable area of M&A, CHROs have a unique contribution to make. If you want to scale the mountain, you need someone with an eye on the terrain.
Ultimately, this is bigger than giving the CHRO a seat at the M&A table. It is about recognizing that organizational capability is part of transaction value. The leaders who understand that will ask the people, culture, and organizational questions before the deal is signed, not after the problems emerge.
The financial model tells you why the deal should create value. The organization determines whether it actually will.
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