McKinsey Warns M&A Teams Missing $2 Trillion in Value by Ignoring Operating Model Design

McKinsey Warns M&A Teams Missing $2 Trillion in Value by Ignoring Operating Model Design

Finance leaders are leaving substantial merger value on the table by treating operating model design as an afterthought rather than a strategic priority, according to new research from McKinsey & Company published this morning.

The consulting firm's analysis reveals that companies typically focus merger integration efforts on cost synergies and revenue opportunities while neglecting the fundamental question of how the combined organization will actually operate day-to-day. This oversight, McKinsey argues, explains why so many deals fail to deliver their promised returns even when the strategic rationale appears sound.

"The operating model is where strategy meets execution," the report states. "It's the difference between a merger that looks good in the boardroom presentation and one that actually works when your teams try to close the books together."

McKinsey's research identifies operating model design as the mechanism that translates merger objectives into practical reality—determining everything from decision rights and governance structures to technology systems and process workflows. Yet most companies defer these decisions until after the deal closes, when integration teams are already under pressure to deliver quick wins.

The consequence is a familiar pattern: overlapping systems that nobody wants to rationalize, unclear accountability that slows decision-making, and frustrated employees who can't figure out how to work across the new organization. Finance functions feel this acutely, the report notes, as they're typically responsible for integrating financial reporting, planning processes, and control frameworks across entities that may have operated very differently.

The firm recommends that M&A teams begin operating model design during due diligence, not after signing. This means mapping out how key processes will work, where decisions will be made, and what organizational structure will support the combined entity's strategy. For finance leaders, this translates to early decisions about shared services, chart of accounts harmonization, and reporting hierarchies—unglamorous work that nonetheless determines whether the merger creates or destroys value.

McKinsey acknowledges this approach requires more upfront investment and coordination across deal teams that are already stretched thin. But the alternative—discovering six months post-close that your finance systems can't talk to each other or that nobody knows who approves capital expenditures—costs far more in delayed synergies and organizational dysfunction.

The research arrives as M&A activity shows signs of recovery after a challenging 2023 and 2024, with dealmakers hoping that lower interest rates and clearer regulatory guidance will unlock transactions. If McKinsey's thesis holds, the deals that succeed won't just be the ones with the best strategic logic, but the ones where someone actually figured out how the combined company would operate before the ink dried.