Mergers and Acquisitions (M&A) are time-honored strategies to grow a business. Want to enter a new market or quickly add quality people to your firm? Simply buy (or merge with) a company that checks all the boxes. In a relatively short amount of time, you can add valuable new expertise, multiply your resources and reach entirely new markets. If only growth were so simple! Like any business growth strategy, M&A comes with inherent risks, too. In fact, a half-baked acquisition can create major operational headaches, damage your reputation and stop growth in its tracks.

According to Harvard Business Review, between 70% and 90% of acquisitions are failures. That’s a sobering statistic. And you don’t have to think too hard to come up with examples. Remember HP’s disastrous acquisition of Autonomy? Or Microsoft’s purchase of Nokia’s phone business? But these are giant, multi-billion-dollar plays that attempted to integrate multi-national corporations.

Smaller deals — such as a consulting firm that acquires a similar organization in another city — are somewhat more likely to work out in the end. Cherry Bekaert, an accounting firm based in Richmond, Virginia, has grown into one of the Southeast’s largest firms largely through acquiring small local practices over time. The strategy has worked because the companies they acquired were operated by accountants like themselves. The cultures were not all that different and the deal benefitted everyone.

But even these smaller-scale transactions can be risky. In this post, I’m going to describe three common ways that M&A strategies fall apart. If you decide an M&A strategy is right for your firm, these examples will help you avoid some of the mistakes others have made.

Point of Failure 1: A Clash of Cultures

Take two established businesses, with unique cultures and mash them together, and what do you get? If not handled tactfully, the result is often distrust and hard feelings. Reconciling differences in culture is a tough challenge.

Take Bank of America’s acquisition of Merrill Lynch a few years ago. The two cultures couldn’t be more different; a southern, traditional retail bank on one side, a fast-paced New York ethos on the other. While the two institutions are still together today, there were a lot of struggles along the way. Many valuable professionals walked out the door rather than adapt to a radically different culture. So what can you do to avoid this poisonous problem?

First, both sides need to acknowledge that ensuring a good fit is vital. Try to understand where each firm’s motivation comes from. Fast growth? Employee happiness? Delighting the client? If these two worldviews aren’t compatible, chances are the whole thing won’t work out.

Second, talk about what a merged culture might look like — and how you might express this in your employer brand. (Your employer brand is the subset of your company brand that speaks to prospective hires.)

Third, do some research. Hire an experienced third party to assess your cultures and the marketplace they will be serving together.

Finally, put the right incentives in place to make the merger appealing to employees on both sides. For instance, these incentives might be built around achieving certain growth or client satisfaction objectives.

Point of Failure 2: Differentiation Dilution

When considering a merger or acquisition, identify what makes each firm so attractive. What makes them unique? If either firm has a strong differentiation strategy, there is a good chance that it’s going to take a hit after the merger. Why? Because great differentiation demands sacrifice — sacrificing non-core services, or sacrificing a wide swath of industries that you choose not to serve.

The payoff, of course, is the strong reputation you can build within a narrow niche — and the higher fees you can command. Chances are, the other firm involved in your deal serves a somewhat different market or offers a different set of services.

Now, this isn’t necessarily a problem — as part of a thoughtful strategy, adding complementary services or audiences can make all the sense in the world. But you want to be sure you won’t destroy the thing that makes you special in the process.

Point of Failure 3: Undermining the Brand

It’s not unusual for two firms that offer distinct services or brands to join forces. The rationale usually goes something like this: “Together, we become stronger and better — a new entity that is so much more than the sum of our parts. Our (very different) clients will come to value the exceptional synergies created by our combined awesomeness.”

The problem is, the marketplace rarely sees it that way. Most buyers aren’t looking for a Swiss Army knife. They are looking for a screwdriver. Or a saw. Or a corkscrew.

You see, strong brands are built upon simple associations in people’s minds. When a person needs to ship a package overnight, he thinks FedEx. When a CEO needs help with business strategy, she thinks McKinsey or Bain. But when Daimler Benz bought Chrysler, what did that new brand stand for? An American/German middle-market/luxury car? The brand instantly became a challenge. Likewise, when AOL bought Time Warner, what were people supposed to think about the resulting company?

So when an accounting firm considers buying or merging with a software maker, beware. While it might be a worthy growth strategy, consider how it will affect the resulting brand (or brands, if they are to be marketed separately). If you aren’t careful, the result could be confusion as buyers no longer know what to think about the new firm.

Tying a knot is easier than untangling one

There are many different ways a professional services firm can grow. And it’s quite possible that a merger or acquisition strategy may make sense for you. If you are considering such a transaction, just keep these three potential points of failure in your sights as you move forward.

As you know bringing two businesses together is a major endeavor— it will take your attention away from other critical responsibilities, such as business development and delivering client work. If you are serious about an M&A growth strategy, act deliberately, do the due diligence and don’t be afraid to walk away if it doesn’t feel like the right fit for both organizations.