Someone recently asked me to think of all the couples I know who really bring the best out in each other. Why don’t you try it?
What % do you get to? 100%? I think probably not? 50% may be for some of you. But for the majority of people I have asked since, the number is typically shy of 20%! This is sad really but I guess we all get into habits in our relationships and often forget why we fell in love in the first place and celebrate that in each other. In the last 12 months the Office of National Statistics (ONS) published data to suggest that in the UK 42% of marriages now end in divorce. If we assume that there are many other relationships which although not heading to a split, are not exactly bringing out the best, then it’s a reasonable bet to say that over 50% of relationships are not ideal. Now, let me ask you another question. How many organisational mergers or acquisitions do you know which have brought out the best in the constituent parts? Wow…… think about that! Now what is the %? If you are typical of most of my network then this figure will be substantially less! Most don’t even feel 10% of M&A’s produced “a good marriage.” An article from McKinsey in 2001 looked at 160 M&A’s and suggests that only 36% maintained revenue growth in the first quarter together, and this fell to just 11% by the 3rd quarter! Further, they showed that 42% of acquirers actually lost ground, compared to their peers, following transaction (Why Mergers Fail, The McKinsey Quarterly, 2001). These are the statistics based purely on the commercial results. I wonder what an analysis on the “smile index” of the personnel would show? This is sad for the people who work there, the customers they serve and ultimately the shareholders who will pay the price.
“CULTURE EATS STRATEGY FOR BREAKFAST” Peter Drucker
I know this statement is true! Culture really does eat strategy for breakfast. It is rare that a merger or acquisition does not make sense in a commercial space. There are products or services which sit well together. Shared customer segments or maybe even complementary markets that could be exploited. Commercial due diligence is extensive and tells the owners and investors what the strengths and weaknesses, opportunities and threats are. The future is bright and everyone is confident. Then we reach closure and the reality bites. Did anyone do any cultural due diligence? Sometimes from day one it is clear that the way the two businesses operated were so different that 50% of the combined business will now feel desperately uncomfortable. Other times it’s more subtle than this and what could work well swiftly becomes a missed opportunity. Why? Because the leaders think they (are meant to) have all the answers, tell don’t ask, and miss out on engaging teams from both organisations to create the new culture, the new business by… wait for it….. bringing out the best in each other!!!!!! Fostering a culture of true engagement, looking for good in others, listening and learning, seeking not judging is not difficult but is sadly so rare. Often it’s the rapid timetable to “local launch” that throws people off track. Leaders fearful of their job, desperate to prove themselves seek to please their bosses and ignore their natural instinct to spend time to listen carefully to their people. Those that are brave and courageous, show less haste, gather more speed and reap the rewards for years to come. Commercial and cultural well-being; the best marriage; both profit AND Smiles.