The Cranky Middle Manager Show #88 Mergers and Reorgs Don’t Work - Corey Sherman
The Cranky Middle Manager Show #088 (MP3 11.5MB 33:38Min)
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Welcome to the show, a really cranky chat with HR strategist Corey Sherman of the www.hrstrategyblog.com about why mergers, acquisitions and re-orgs so often crash and burn. A little venting this week- have fun.
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Show Notes
0:00 Welcome to the show. Today we’re going to vent about why mergers and acquisitions usually don’t work.
This week’s episode is dedicated to Charles “Chinese” Gordon, and to Muhammed Ahmad, better known as the Mahdi of Sudan. Two sides of the same coin. Talk about a merger that didn’t work and never had much of a plan. Any relationship between this situation and anything going on in the news is purely coincidental- just like every other time in the last 200 years we’ve tried it. But companies don’t seem to learn from history either.
3:32 The quote of the week is from Sun Tzu- the man knew a little about strategy and even he wouldn’t have tried the HP-Compaq merger.
4:52 Welcome Corey Sherman of Strategic Planning Associates. He’s not a big fan of mergers and acquisitions. neither am I, but I’ve been reorged, merged or acquired 7 times in the last 11 years so maybe I’m just bitter. So what’s the logic that makes smart companies believe they’ll succeed where others fail?
7:17 Come on, you know why you listen…we use the word Anschluss in a sentence, who else would do that? But it’s a great description of what happens when you push two companies together. Corey tells a great story about a merger where the integration task force is made up of the same managers who drove both companies into the ground in the first place. Good thinking huh?
9:59 “Corporate Culture” is thrown around a lot, but what does it actually mean? Mergers usually make cultures turn inwards, as opposed to out towards the customer. And guess who’s usually caught in the middle? That’s why they call us middle managers, baby.
13:08 A sadly familiar story of what happens to good managers in bad mergers. Sound like anyone you know?
19:20 Reorgs are just Mergers and Acquisitions without money changing hands. Nothing says failed strategy like reorganization. Check out my blog about this from a few months ago…
Oh, and here’s another chance to bash HR.
25:52 When all the chaos is over, are you left with your best people? I tap dance on the line between stereotype and observation. So what else is new? But why are people the last things considered if they’re your greatest resource?
28:40 Oh and customers don’t enter into the conversation much either.
Resources:
Society of Human Resource Managers
International Association of Business Communicators
And on a completely unrelated topic, Corey’s brother hosts a podcast here on TPN-
Drop me an email, join our frappr map, generally join the fun. Also, don’t forget about the listener survey.
March 27th, 2007 at 6:54 am
Executives like to see their name in the papers and on the evening news…big mergers get them there…they also like to hobnob with hot shot bankers and lawyers…mergers do that too…but when the press is gone and they have to do the basics of management…communications, change management, leadership, etc…they are a deer caught in the headlights
March 28th, 2007 at 5:09 am
At the end of the podcast, you asked for people who disagreed with you and your guest to write in. But what’s to disagree with? Like you, I have gone through various re-org’s and so-called “mergers”. You are SO right — the only reason they’re called “mergers” is that “Anschluss” is too hard to spell! Each of these changes brought our company down another peg, and took us further away from our core strengths. Now, our situation is worse then ever, thanks to the geniuses in the “C suite” whose greed dwarfs their business IQ. Great podcast!
March 28th, 2007 at 6:38 am
Executives like M & A for three reasons
1) as noted by Mary, they get their name in the paper
2) they grow the company fast, fast, fast which is a good message to send to Wall Street
3) M & A creates chaos for years so, instead of being held accountable, they can say, “Well we’re busy with the merger so we really can’t generate the resutls we should.”
Interestingly, Jack Welch who did as much of this as anyone and had one of the best batting averages advises that the entire integration should be done within 90 days.
March 31st, 2007 at 11:37 am
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April 6th, 2007 at 12:38 am
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April 9th, 2007 at 7:56 am
Wayne,
Just listened to your podcast, excellent material. I heard about you at PodCamp NYC, you were held out as an example of a success.
The discussion surrounding the importance of human capital in a merger is very applicable to Internet firms. When my previous company was acquired there was a concerted effort to make sure there wasn’t a talent flight. Sure we didn’t merger the two companies, but people still had it high in their mind.
keep up the good work
Rob