Even experienced founders and executives can find themselves prioritising a simplified financial outcome over the operational realities that built their company. The highest bidder may win the auction, but the business frequently pays a heavy price afterwards, with integration failures eroding synergies and diminishing the company’s prospects.
The highest bidder wins the day, but the company often loses its future.
The Dynamics of Price-Driven Decisions
The standard M&A playbook tends to follow a familiar sequence:
The Equity Story: A narrative emphasising financial performance, tailored to attract a broad range of buyers.
The Competitive Auction: A competitive process with artificially compressed timelines.
Bid Evaluation: A hierarchical evaluation of bids dominated by price.
This approach seems efficient and objective, since price is tangible and easy to compare. Sellers, particularly in founder-led businesses, are drawn to the promise of greater liquidity and personal financial security. Yet it introduces a powerful bias. The allure of “more money” can overshadow initial concerns about legacy, employee welfare, and long-term continuity. Qualitative factors like strategic alignment, cultural compatibility, and community ties are often acknowledged in discussions but rarely prove decisive.
M&A advisors, compensated through fees linked to deal size, understandably guide processes toward higher valuations. Data rooms brim with financial, legal, and operational materials, but rarely delve into the informal norms, trust networks, or decision-making patterns that shape everyday execution.
As the process unfolds, sellers adapt to this financial emphasis. What starts with broader aspirations gradually narrows, leading to a transaction that maximises short-term gain but risks the company’s enduring health.
The Overlooked Core: Culture as the True Value Driver
Every successful company has a unique culture, a distinctive mix of shared purpose, proven practices, relational dynamics, and decision heuristics that turns strategy into results. These intangibles are the real engines of competitive advantage and cash flow generation, yet conventional processes often obscure them.
The equity story, designed for wide appeal, simplifies complexities to reduce friction and maintain momentum.
The irony is profound: in order to maximise financial perception, the process actively erases the very elements responsible for long-term value creation.
Buyers relying on this polished financial view acquire an organisation they only partially understand. Post-closing, integration frequently involves applying standardised efficiencies to a bespoke system. Efforts to justify the premium through cost cuts can unwittingly eliminate essential capabilities, mistaking vital strengths for redundancies.
My experience in the field confirms this, and the data bears it out. Research from Harvard Business Review consistently places the M&A value destruction rate between 70–90%. The primary culprit is rarely the strategy; it is the failure to measure and protect culture.
Escaping the Price Trap
This over-reliance on price is not inevitable; it arises from how most M&A processes are designed, and sellers can choose a different path.
Responsible approaches exist that widen the competitive field, not on who pays the most for future cash flows, but on who best demonstrates a deep understanding of the drivers of the company’s long-term performance. Incorporating cultural due diligence through anonymous employee surveys, leadership interviews, and behavioural assessments, renders intangibles visible, comparable, and easier to protect.
This requires rejecting the false appeal of price as the sole arbiter. Instead, design a process that deliberately highlights and safeguards intangible value, empowering your team and unlocking genuine synergies.
When stewardship is elevated alongside price, the outcome shifts decisively: the transaction becomes a true succession rather than a liquidation, one that empowers your people, positions the company to thrive long after your exit, and safeguards your legacy.
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Amine Laouedj Managing Director, Glenshore
I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.
Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.