Cultural and organizational issues are the bane of M&A deal-making (and that's especially true for cross-border acquisitions, as we reported here [1]. It stands to reason, then, that any company that wants to get the most out of a transaction should be looking very closely at the human factors involved. But given the deluge of work that accompanies any M&A move and the sheer complexity of the processes involved, these factors are all too easily overlooked, according to a report from PricewaterhouseCoopers. At most companies, mergers and acquisitions are few and far between, so managers may lack the experience to understand that these "soft" dimensions of a deal are just as important as the "hard" factors such as financial values and potential synergies.

It takes a concerted leadership effort to ensure that the human element is given its due. The report offers suggestions for each stage of the acquisition process:

• Planning the deal. Even when scouting for targets, deal-makers should look beyond the easily quantifiable value drivers to consider the leadership and cultural style of a potential acquisition.

Make sure your team includes people-oriented leaders who can build trust, communicate effectively with employees in both organizations, and handle the inevitable uncertainties and morale issues with sensitivity. And if a team member can't deliver those qualities, consider teaming him or her with a leader who can, or investing in a few sessions with an executive coach.

• Doing the deal. By the time the focus shifts to structuring the transaction and completing due diligence, leaders must have a strategic vision of what the new combined entity will look like, and they must be committed to the deal. If either of those factors are lacking, a leader may lack the confidence to draw up a coherent tactical plan or may even undermine the project.

The report gives the example of an executive of a U.S. company that was the target of a bid from a larger French organization. He had originally resisted the deal on the grounds that the would-be purchaser was an "old school," bureaucratic organization. In the negotiations phase his attitude alienated the buyer, and as a result the deal failed.

Contrast that with the story of an executive at a U.S. company which was bidding for a Mexican firm. Recognizing the high value that Mexican culture places on relationships, he made a point of traveling to Mexico for meetings that he could easily have conducted by phone. This decision contributed to a successful integration process.

• Integrating the deal. In this phase the focus is on execution, and the first 100 days are crucial. Key leadership factors include constant, comprehensive communications and the ability to respond flexibly to changing conditions while keeping the strategic vision in mind. There's a danger that deal leaders might fall back on their pre-deal identity once the transaction closes; to prevent that, consider embedding them in the target company's offices. Doing so helps ensure that communications are effective and provides leaders with more opportunities to show that they understand the target organization's concerns.

To read the complete report from PricewaterhouseCoopers, click here. [2]