Precision in verbal engineering
Keep up to date with our most recent blog posts.
Love can be a maddening diversion. Separation equally distracting. Love or divorce - what is the price of disruption in corporate or government liaisons?
As anyone who has ever loved knows, love can be maddeningly distracting. Whether making or breaking of a relationship can mean normality heading to hell in a handcart.
Kraft Heinz saw a merger with Unilever as a match made in heaven. It might have saved Kraft management having Cadbury’s Crème Egg all over their faces had they asked Warren Buffett first given his famous hostility to hostile takeovers.
Mergers are not just synergistic unions to achieved cost savings, they require the harmonisation of sometimes widely diverse cultures. If the process of merger commences with antagonism and resentment, it will not contribute to the perceived benefits of the union. Kraft had form when it took over Cadbury leaving a bitter taste in many mouths.
But even if both parties greet a merger gleefully there are still dangers. The corporate "brain" can only do so many things at a time. Someone in love may be unable to eat, sleep or concentrate; the boards of merging companies may struggle to downsize the workforce, upgrade the IT systems and present a united front while simultaneously maintaining sales, revenues, performance and profits.
The contribution and input from investment bank advisers, stockbrokers and consultants can only go so far: advice is not pixie-dust that once sprinkled magically, and instantaneously, transforms a problem into a solution. Advice is neither direction nor execution; it represents an idea or set of ideas in search of someone to implement it or them.
Like marriage, the full synergistic benefits of mergers and acquisitions are seldom achieved in full. Indeed, Like Godot in Samuel Beckett’s play, sometimes they never arrive at all.
Corporate executives have businesses to run. How ever energetic or talented, taking over another large chunk of business will put them under pressure. Managing the pressure of the process itself can drain resources.
And mergers and acquisitions can result in something that is not focussed, streamlined and consistent. Kraft has form on this too: it decided to demerge its sweets and gum business, that included Cadbury’s, into Mondelez, a separate company, in 2011 having demerged its tobacco and consumer goods conglomerate, Philip Morris, a decade previously.
When Britain joined the European Economic Community 45 years ago it seems to have been a low budget wedding. Brexit, on the other hand, has the makings of a Hollywood blockbuster divorce. Celebrity lawyers calculate how long the new yacht they will be ordering will be depending on the wealth and acrimony of a celebrity divorce.
Before the promised benefits (or presaged costs) of the final outcome of Brexit, there is the cost of the process to be accounted for. And it is not just the phalanxes of civil servants and lawyers and trade negotiators whose noses will be firmly to the Brexit grindstone for many years to come: policy announcements by the British government are already overshadowed by Brexit news.
The amount of time Prime Minister May is devoting to the process means she must be emulating Mrs. Thatcher’s famed ability to survive on a couple of hours sleep a night. For better or for worse, for richer or poorer – indeed in sickness and in health, Brexit will prove a costly distraction from the day-to- day running of the country.