Mergers and Acquisitions-Busting a few Myths

During my long career, I am lucky to have been asked to facilitate 12 major mergers/acquisitions.  Each project lasted between one to five years; nine were successes; two was total failures (I was fired twice)  and one is still far too early judge.

Lots of myths exist in the domain of mergers/acquisition.  Mergers and acquisitions are a nightmare, filled with power struggles and severe anxiety.

The prevalent myths about the boundless opportunities of a merger remind me of the “happy happy fun fun” times promised around holiday time, when families get together, people get depressed , fat and/or drunk and trauma rooms fill up with attempted suicides.

In this brief post, I will share my lessons learned about the fascinating area of organization development in mergers and acquisitions.

  • There are no mergers-just acquisitions. One company becomes dominant and in a Darwinian struggle, the acquired company is partially digested. Even in the best of cases, the acquiring company remains with a case of mild indigestion whilst the acquired company is dominated.
  • It is impossible to take the best of two cultures and form new improved culture. The very claim that this can be done is pure alchemy, fake news and charlatanism. What does occur is a protracted Darwinian struggle between a stronger and a weaker culture which fizzles out about 10 to 15 years later, or when people from legacy companies leave or die.
  • Interpersonal trust is the most important glue that was ever invented. Trust is built in face to face meetings, intensive travel and lots of informal quality time together. Building trust in conference calls or on-line chats is like using a shower curtain as a condom.
  • For about a year, everything is a struggle: budget codes, travel policy, nomenclature, titles-it becomes a fucking bloodbath unless decisions are taken early. The more buy-in and agreement one tries to establish, the longer it takes to make decisions and the worse the fighting becomes. Fast authoritarian decisions taken quickly work best.
  • Managers who cannot build relationships of trust and transparency across geographical borders should be axed if they cannot adjust with 3 months.
  • If things are broken in the senior management team, the merger will fail. The senior management team is where most OD effort is needed.
  • Mergers and acquisitions are very painful for a long time. Expectations must be adjusted accordingly.
  • Cultural differences are important, but far less important than competency of senior management who manage these differences. Too often, poor management will blame cultural differences for problems that management could have solved if more brain power was available.
  • Many people who were competent in their legacy companies become incompetent because their former skills are not scalable or relevant.
  • Due diligence before mergers/acquisitions is highly flawed and tainted.  After the ink has dried, those who lied and/or misrepresented need to be pardoned or removed
That is no country for old men. The young
In one another’s arms, birds in the trees,
—Those dying generations—at their song,
The salmon-falls, the mackerel-crowded seas,
Fish, flesh, or fowl, commend all summer long
Whatever is begotten, born, and dies.
From Sailing to Byzantium-William Butler Yeats
“A revolution is not a dinner party, or writing an essay, or painting a picture, or doing embroidery; it cannot be so refined, so leisurely and gentle, so temperate, kind, courteous, restrained and magnanimous. A revolution is an insurrection, an act of violence by which one class overthrows another.”
Chairman Mao
A merger is a nightmare.
Chairman Allon

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Does OD respect human differences? Well, it depends

Natalie believes that transparency is foolishness; it betrays human weakness and weak people get screwed. So she always keeps her cards close to her chest. She is seen as non cooperative and “needs some training in communication skills”.

Nir believes that all systems are corrupt and or inefficient, and the only way to be effective is to bypass the system. Nir is labelled a cowboy who needs to be coached on being a game player.

Ngai is certain that emotions need to be hidden at work, especially if there is a conflict. The best way to deal with a conflict is to wait until it goes away, or ignore it so that it does’t get worse. Ngai keeps all her emotions to herself and she has been given feedback on her introversion in team meetings. She was told to “better advocate” her departments agenda.

Anil  believes that his boss should be consulted on any deviation however minor from procedures  otherwise he is showing disrespect. Thus, he often says to his peers that “I need to consult my boss”. Anil is seen as a shirker.

My claim is that OD does not accept or respect any of these deeply cultural-related behaviours since OD efforts will always focus on changing these behaviours. We all agree that conversion therapies for homosexuality are both evil and nonsensical. But there is no agreement that OD’s non acceptance of cultural differences is any better. So yes, OD is the very first not to show respect to more than half of the world population.




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When harmony trumps truth

Truth has many adversaries. Of course nowadays, fake news is the number one public enemy of the truth. Yet fake news is but one of many. 

W Somerset Maugham’s classic The Moon and Sixpence tells of Charles Strickland, for whom beauty is more important than any other human value, truth and integrity included. Thus, the shock value of the novel, both then and now.

Yet truth has another adversary: the preference of harmony in social relations; this presents a huge challenge for fast moving organizations which need to transmit accurate information quickly to get the job done and remain one step ahead of the competitors.

Eddie, VP of Asia based in Taiwan thinks that Sandra, his peer and young US-based  VP of Strategy should not meet with Mr Ocampo.

Mr Ocampo serves as a potential clients’ Manila-based CEO, who known is to be very conservative. Eddie firmly believes that much more harm will come than good from such a meeting.

Yet Sandra asked the CEO (Stan), who told Eddie, to set up a meeting between Sandra and client Ocampo.

When asked by Sandra what messages she should emphasize when she meets with Ocampo, Eddie stated that “your message should be low tone and understated, because of the complex nature of such meetings”. Sandra thanked Eddie for his input and promised to “send you my PPT slide pack for your further comments.”

Eddie is not “afraid “to tell Sandra or Stan the truth. But Eddie thinks that there is no value in doing so. Quite the opposite; Eddie believes that telling Sandra or Stan “the truth”  will destroy harmony and upset the smooth chain of command, which is far more mission critical than any bothersome fact. 

Sandra met with the client in a short and tense meeting, during which the 69 year old Ocampo felt very uncomfortable with 31 year old Sandra. Ocampo also made sure that young Ms Sandra waited one hour and 45 minutes in the waiting room.

Eddie is ok with this. He thinks he has been a good corporate citizen.

Sandra told Stan that “Eddie screwed things up, because he thought I was treading into his territory”. Next month, Eddie to going to a course on Authentic Communication, which has been commissioned by VP HR Gloria Ramsbottom, to enable better alignment between corporate and field organizations.







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Trust me and then I’ll follow the process. Follow the process, then I will trust you

Ethan, the common  boss of Mark (USA) and Eddie (Taiwan), asked me to work with these two highly talented yet chronically uncooperative executives on “better aligning” themselves to get things done without bogging Ethan down.

Mark (Corporate Strategic Account Management) told me that Eddie (Taiwan Sales CEO) refused to enter account information into the SCDB, the sales control data base. Mark emphasized that data entry is not “elective”, and Eddie is in breach of discipline. Eddie, according to Mark, does not follow process- how can I trust that he is not withholding information and other forms of local monkey business”? To Mark’s credit, the SCDB has been extremely useful all over the world, except in South East Asia, China, Russia and Taiwan.

Eddie claims that Mark is hounding him and :”throwing a book of rules at me”, rules with do not make sense because of the manner that deals are done in Taiwan. Eddie told me that he will not waste his time on secretarial duties of data entry, “but if Mark trusts me, he will know everything he needs to know, and more”.

Eddie and Mark have both been coached before, and the coach gave them 3 rules* to follow- which they did not, although they claim they did.

After speaking with Eddie and Mark, I referred back to Ethan who had a hard decision to make-does he want to sell in Taiwan or not? Because if he does, corporate process, not individual behaviour, needs to change.

Ethan dropped the mandated use of the SCDB, Mark received guidance from me on effectively managing Eddie while Eddie consulted with me on what to tell, and not tell, Mark. I back channelled all this information to Ethan, who made all the decisions, using me as a channel.

Project concluded a month ago. Sales in Taiwan flourishing. Mark was moved out of his role, which was split in half, with a dedicated Asia executive being appointed.


*3 rules

No surprises. No backstabbing. Consult one another before making decisions.






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The Israeli election teaches 2 quick lessons about Israeli organizational life

I followed the Israeli elections on local media as well as on foreign media. Many reports expressed dismay about the tactics used in the last few days of the campaign during which many parties called out to their supporters: “vote for us, we are losing”. This type of campaign is called “Gevalt”, and implies impending doom. The use of this tactic shocked foreign media.

This blog of mine is not abut politics, yet the lessons to be learnt from the use of the Gevalt tactic merit a short focus on  its underpinnings , since Gevalt is so applicable in organizational life.

A “gevalt” campaign rests on two pillars-fear and compassion.


Fear of impending doom serves as a massive motivating factor in Israel, internally and externally. If “they” win, “we are finished”. Israeli society is post traumatic, both from the holocaust, the periodic wars and the constant threat of terror. What separates us from them is very often a myth, but fear is real and fear ignites, augments and enhances the survival instinct. The post traumatic symptom which is most common is the survival instinct, which serves as a magic trigger for action.

So if you manage a project in Israel, a statement like, “if we fail, HQ will close us down” is much more effective than a detailed plan on how to succeed. Or, if a product fails on first try, the panic mode of 24/7 will be more effective than a detailed fix-it process which may take longer yet solve the root cause of the problem.


When an Israeli politician admits that he may be losing, what he (or she) may be saying is that “I am like your father; I make mistakes but I care for you. Show me compassion when the going gets rough, because I busted my ass to bring you up/take care of your interests.

So if you manage a Israeli team, an appeal for help is far more effective than promising a bonus or a weekend in an resort in Cyprus or Greece. “We take care of each other” works far better than using a formal system such as compensation to harness people in tough times. Btw, when push comes to shove, Israeli organizations do not generally fire people at the drop of a hat, unless the downsizing comes from a global company which needs to chop a given number of heads from each geographical site.


Using a survival motive and appealing for compassion are great motivators in Israel. There is no such thing as an overdose of either. Our society is post traumatic and emotionally high strung.

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In the room, people come and go talking of…..Meetings in Israel

To lead you to an overwhelming question …
Oh, do not ask, “What is it?”
Let us go and make our visit.
In the room the women come and go
Talking of Michelangelo.
The Love Song of J Alfred Prufrock- TS Eliot

Meetings in Israel have many unique characteristics: loose agendas, going out on a tangent most of time, argument, reopening of decisions, debating for debating sake and yes-but-ism.

There is yet but another challenge (for the non Israeli) in our meetings, and that is the frequent coming and going in/out of the meeting room.

The latter is the subject of this post.

Today, I stood outside the Lord Balfour Room and asked those coming in/going out of the room what their story was. The meeting in Balfour was scheduled to start at 1000 AM. It started at 1017.

At 10.22, Alisa and Fatima came into the room. They were both on the same train that ran late; both mentioned that the air-conditioning on the train was malfunctioning and thus, they had stopped  to get a bottle of water with ice before entering the room. The ladies asked me to carry in the ice bucket.

At 10.27, Maor left the meeting room, because his son had called him to ask if he could have the car in the afternoon, and if so at what time. “And Dad, by the way…” Maor went back in at 1040.

Sivan left the room at 10.42 to take a call from her Dad’s doctor,  for which she had been waiting for  3 weeks.

Miki, Simon and Iggie had a double booked meeting and arrived at 1045.

CFO Riki left the room 3 times: once to speak to a supplier who had not been paid; once to field a call from a board member and once to smoke.

The meeting which was supposed to end at 1130 ended at 12.30, so lunch was ordered in and the discussion went on for another hour, even though a third of the people invited had left.

Why does this happen?

1 Personal issues can be dealt with on company time.

2 Immediate responsiveness is more valued than keeping to the plan.

3 People multi task all the time as a way of life and if there is a gap, they retro fix it.

4 Keeping to plan/schedule has some espoused importance but other things are “equally important” and everyone  must  decide his/her  priorities. Besides that, shit happens.

5 Some of the decisions that were made in the meeting can be revisited by people who were not in the meeting when the decisions were made, so  lack of discipline is complemented by lack of consequence-all of which is compensated by deep commitment and willingness to do everything to get the job done! 🙂

Is this chaos? Yes for the outsider; No for the local. Why? That’s another post. 

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Good teamwork is a result of compromise between strong people and their respective agendas

枪杆子里面出政权 (Political power grows out of the barrel of a gun) Mao

This is no country for old men (Yeats)


Much advice is available about how to improve team work-leadership, recruit for attitude, culture, team bonuses and what have you. If you ask me, the most critical piece of advice is often missing. 

It is critical to  ensure that power is balanced between team members, without which team work is impossible.

Frank is CFO; he is also the watchdog of Carmen, the main investor and director of the board. Efraim is R&D manager and CEO,  Chris run Sales. Eve runs HR and Administration. Dr Paco is Director of Clinical Trials whilst Claire runs purchasing.

Frank not only sets and controls budgets, but he controls budget utilization within each departments’ budget. Frank brings each and every purchase order of more than 3000 Euro to Carmen for approval. Eve must bring each and every job offer to Frank, who gets Carmen’s approval, or disapproval.

The team work in the team is atrocious. Efraim cuts Frank out of loop, and by passes process left right and centre. Eve has a slush fund for bonuses. Dr Paco once threatened to hit Frank after Frank said, “we pay you too much for too little.”  If Claire has to make a 10,000 Euro purchase, she makes five purchases of 2000 Euro each. When Frank calls her to task once too often, she tells him to “fuck off”. This happens several times a month.

Efraim has had 3 management coaches and the team has gone offsite for three times in five years. Twice, Frank was not able to attend for health reasons; he apparently  suffers from painful hemorrhoids.

There is no teamwork because Frank has too much power. Carmen runs the business, not Efraim. And Frank is COO in disguise, not CFO. In its present configuration, this team will never work well together.

Teamwork is the result of pragmatic compromise between strong people and their respective and often conflicting agendas. Too much emphasis on shared values and lovely-dovey do not create teamwork, any more than universalism creates a peaceful world.

Strong people work together well, especially if they are equally competent.  When some are strong and others are weak, there is a massacre.

I am sorry that I have not mentioned gender until now, but it is irrelevant to the issue at hand.




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The outdated profession of organization development-an example

Barry has just raised 15 million dollars from investors by promising  to deliver a product within 2 years that will detect pain in canine and feline pets in order to advise the owner whether or not a trip to the vet is necessary.

Barry knows that 2 years and 15 million dollars are not enough. More likely, he will need eight years and  triple the amount of money. It may even be necessary to purchase another company which specializes in canine ophthalmology at a hefty price.  Only Barry knows this.

As CEO, Barry will provide unachievable goals to his staff. Milestones that need 9 months will be planned for 3 months; each staff member will be burdened with the work of 4 people. There will be no link between the plan and the do-able.

Barry will burn out most of the people who work for him. They will be replaced and the board will probably accept the derivative delays that stem from employee turnover. Every single plan and budget will only serve one purpose-managing the investors’ expectations. 

Employees will bitch, morale will be low, many engineers will suffer from insomnia and digestive problems. Barry will divorce, see a shrink and age. Ten years later, Barry will be a very wealthy man, and his company’s history will appear in almost every business magazine.

Classical Organization Development has no added value in such a situation, because transparency and a healthy work environment are building blocks of our outdated profession, which is geared to a world that is almost disappearing before our very eyes.

What can be done for start up? That is a different post. 




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Don’t mitigate an organizations’ pain

There have been screaming matches between Sales and R&D (Dev) ever since the market release of the last product.

Unhappy clients have communicated thousands of complaints which are besieging management! It is now very hard to get the  Sales and Dev teams to sit in the same room in order to solve problems. There are nasty emails threads going back and forth with personal insults, buck-passing and character assassination.

Stan, the CEO, has no time to deal with this. The investors are on his back for a faster return on investment. He needs to replace his CFO who he caught “chirping” to the board about revenue forecasts. Stan  expects the head of Sales, Lucien, and the head of R&D, Deepak, to be mature and handle the issues at hand like adults. “Boys”, said Stan, “get these teams aligned. Use HR or a consultants as needed”.

The HR manager ran an on-line survey to see what needed to be done to “calm things down”; staff described their level of pain as 9 (on a ten point scale). Job satisfaction was rated high (8) and interdisciplinary teamwork was low (6).

A consultant was hired  to do outdoor training to lower group pain. A  yoga coach  was hired to relieve the stress/pain of the last few months at the individual level. Lucien and Deepak were given each individually 2 hours of anti-stress coaching provided by an on-line vendor via Skype. As is said in the Merchant of Venice, the goal of both interventions was  “Hiding the grossness with fair ornament”.  Act 3, scene 2. Or as is pointed out in a comment (in Hebrew) below by a reader  Mr. Koren, the emphasis was placed on feeling well, not getting better.

However, this mess  was all about the risk taking behaviour of CEO Stan. In order to show his investors a pattern of growth, CEO Stan had oked the design and release of a totally immature project, which no one yet knew how to design let alone build. Sales numbers were high because the install base is in the third world, where agents pay off corporate purchasing to buy almost anything.

The product, now released, has cause huge pain. Sales cannot deal with the angry clients and expects R&D to send people to the client site to get the product working. R&D expects Sales to “manage the the customer” until a half decent “fix” can be concocted.

The moral of this story is that organizational pain is an important indicator, and thus need not be/must not be suppressed. Quite the opposite, the pain can lead us to the dysfunction, albeit not directly.

Mitigating  pain symptoms  in organizations is often the least indicated solution to organizational problems. Mindlessly mitigating pain is a happy happy, wow wow, useless useless exercise which has corrupted organizational development of the worst kind.

Oh yes, coaching for individuals is often (certainly not always)  the mother of all pain mitigation elixirs. Coaching for the individual often means, “Let’s work together on how you overcome other peoples’/system problems”.





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Tell tale signs that an organization will not make its commitments

The commitment

The fully functioning product which you purchased will be delivered, installed by Nov 4th and set to go the very same day.

What happened on Nov 4th?

The product was delivered in May, however it had not yet been fully tested. 60% of revenue generating features were “still in the pipeline”. The client threatens to litigate although the vendor is blaming the client for “having misled us on the level of site readiness and employee skill”.

The scribbling on the wall 

No one should have been surprised because the slip was scribbled on the wall, if you just know how to read it.

Here are a few clues that will allow you to perhaps foresee the crash, albeit not prevent it.

  1. The client “over buys”, meaning he presses for a client commitment because he himself is in trouble. For example, the client needs to increase market share by 30% “or you are out of a job”.
  2. The aggressive commitment is made by shoving it down developers throats. Nay sayers are pushed aside and people with high confidence and low technical savvy take over.
  3. Employees indeed are willing to make aggressive commitments, but only like this: “when Silvan delivers his piece, and QA has signed off, and the real-time folks deliver their piece, I”m sure we can make it, even if it’s a bit challenging”.
  4. Risks, obstacles are smoothed away by fancy verbal tap-dancing. Certain things are no longer documented and status reports are cryptic and ambiguous.
  5. More people are thrown at the job, but the number of skilled people is in decline because the top professionals have left or checked out.

When you foresee all this shit, it still cannot be stopped. Often, this is the way that the particular business cycle functions and everyone is making lots of money despite this apparent insanity.

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