Even during the credit crunch of the past 12 months, hardly a day has passed without the media hailing a major merger or acquisition (M&A1) event. In 2008, Microsoft has been chasing Yahoo! in an on-again off-again manner, Delta and Northwest are in the midst of executing a complicated merger integration effort, United Technologies is targeting Diebold and more. Yet numerous studies show that most mergers fall short of creating significant shareholder value. A Bain & Co. survey of 250 global executives involved in mergers and acquisitions indicated that only three in 10 created meaningful value for shareholders and that poor integration was behind two of the top four reasons for failed corporate unions.2

Why does the newly combined company so often fail to deliver on the promise of the original business case for a merger? Our research suggests the most fundamental failing involves the inability of the post-M&A top management team to quickly establish and then maintain productive working relationships, leaving it poorly positioned to lead. In a post-M&A company, many of the preconditions for team success are absent. Mutual trust, shared vision and roles that are clearly articulated, understood and accepted require time to develop. Unfortunately, stakeholders want to see results and expect top team performance almost from the day the M&A agreement is signed.

Executives who participated as adversaries during the negotiations, advocating for their respective stakeholders, are left to navigate the challenging segue from “tough negotiator” to “trusted colleague.” Stephen Elop, who negotiated the 2005 Adobe Systems Inc. acquisition of Macromedia Inc., told us, “I was obligated to my role as CEO of Macromedia. … I had to fight hard for Macromedia at one moment and then become a new Adobe employee the next. It required that both sides forget we had just fought to get where we are and begin working together.”

There may be a number of other challenges to face as well. Some executives may have a bitter taste in their mouths about how negotiations unfolded or be resentful of the outcome, causing hard feelings about titles, roles, responsibilities and compensation. Executives from the acquired companies may have newfound wealth, prompting jealousy and raising questions about their commitment to the ongoing venture. Other executives may feel trapped in an arranged marriage, rather than excited about new opportunities. It is hardly a harbinger of an effective top management team when what binds it together is a