At 11:10 PM 6/25/96 -0600, you wrote:
>Replying to LO8081 --
>Kim asks --
>> We are interested in learning how to co-create a VISION
>> of two (2) separate business entities coming together in
>> a SINGLE business that is a LO.
and Ben replies:
>It was a painful process because of the disparity in the two companies
>mental models. It was common to hear people say, "That's not how we do
>things around here," or "That's the Novell way, at WordPerfect this is how
>we do things." And, of course, the retort was always, "Yea, and look at
>what it got you -- a buy out!"
>Both businesses need to respect each others "idiosyncracies" and patiently
>work toward a shared vision -- focusing on merging the communities before
>merging the business practices. Trust is critical, and both companies need
>to demonstrate openness and a willingness to look at things in a new
>light.
Having been both the acquirer and the acquiree, and now in the business of
helping companies through such processes, I can pass on the two paths to
success: (a) If the acquiree has desirable assets but an incompatible
culture, then the acquirer must crush the acquired culture with dispatch
and substitute its own, or (b) If the cultures are possibly compatible,
then the acquirer should celebrate the acquiree as a peer and hold a
"constitutional convention" to establish a new corporation/structure.
The majority of cases strike somewhere in the middle with varying degrees
of success, often at the low end. The greatest cause of [domestic or
international] mergers, joint ventures, and distribution/franchise
structures is a clash of cultures, and not issues of finance or technology
(although those are the "blame words" used to shield the true reason).
Culture collisions occur (a) because expectations are not mutually set and
reset, and (b) the all important relationships are not formed and
sustained.
And that clash of cultures is a clash of positions, interests,
assumptions, feelings by two amalgams of stakeholders. It takes sustained
effort on the part of the acquiring CEO and management and sustained trust
on the part of the acquired management (since their CEO is often a
casualty) to resolve those interests while keeping their attention on the
core business(es) and the market. One merger to which I was a party was a
narrow 51% - 49% equity split -- and I was in the 51% -- and it was
effectively winner take all, even though some senior members of the 49%
team were retained in management positions.
I have exposure to Novell -- but not as a client so I am not revealing
privileged information -- and it is renown in the technology markets as
having no capacity to plan in any strategic sense (the ninety day forecast
is the strategic plan as far as Ray Noorda was concerned) it has ferocious
intercine warfare that fritters away opportunity, it had a history of
acquiring assets and then mucking up the fruits of the acquisition (such
as DR-DOS), and most of its operating groups/managers cannot operate, yet
it has an enormous corporate ego -- hardy an ideal candidate to be the
acquirer of a Camelot firm such as WordPerfect, which itself had been
living on borrowed time. That acquisition was a waiting train wreck.
It's not easy and it is rarely done without outside assistance, although
the Harris - Lanier merger is a magic example that tries the rule.
Best regards, Gordon Housworth
Intellectual Capital Group
ghidra@modulor.com
Tel: 810-626-1310
--Gordon Housworth <ghidra@modulor.com>
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>