Many workplaces play people off against each other, creating a culture of what they call ‘healthy competition’ – with rewards for meeting targets, pitting each member of the team against their peers and showcasing the stars who perform best. But is this a healthy working environment? Sure – it might see some people thriving, shooting [...]
[An edited version of this article appeared in the June 2016 edition of Training Journal] It’s boom time again for Mergers and Acquisitions. 2015 set a new record for global M&A activity, according to MergerMarket’s Global and Regional M&A: 2015 report, with a total value of $4.3 trillion, a 30% increase over 2014. Activity was particularly strong in the US (up 40%), Asia-Pac (up 43%) and Japan (up 91%), and in the Pharma, Consumer and Financial Services sectors. In Europe, where activity value increased 22.4% on the previous year, the UK accounted for 38.7% of deal-making, its highest share on record. While we might assume that unrelenting competition, a slowdown in emerging markets, and continuing troubles in the eurozone are driving this upswing as Boards seek to strengthen strategic positions, market commentary suggests that – in the US, at least – relative market strength is the predominant factor. Writing in KPMG’s 2016 report, US Executives on M&A: Full Speed Ahead in 2016, Global Head of M&A, Philip Isom, commented that ‘The U.S. continues to be the favoured M&A destination because of its relatively healthy economy.’ Business giants are not penguins: when they huddle together, it is not necessarily for warmth against a cold wind. This is, perhaps, just as well: given the track record of M&As, any deal motivated principally by survival should ring alarm bells. ‘Survival’ is not readily divisible. While remaining competitive in the face of declining confidence in organisations’ ability to generate growth organically had been a key factor in respondents’ 2015 replies, their primary motivations in 2016 – whether in relation to geographic reach, business lines of customer base – were all expansionary. Counting returns or counting chickens? But whether their intentions were in growing sales or shedding costs, the challenge of extracting value remains. Like any promise, the intentions behind any M&A must be realised, and history makes uncomfortable reading. Most of us can readily recall a number of well-documented, high-profile deals that should never have been done: the stories of the New York Central and Pennsylvania Railroads, of Daimler and Chrysler, and of AOL and TimeWarner should sound alarms down the years. And many other deals may have seemed like worthy or potentially profitable adventures, yet the shareholders involved will still have been fortunate to break even on their previous investments. The danger that the promise will evaporate, with wealth destroyed rather than created, is not a new phenomenon and it has long been recognised. McKinsey & Company’s 2010 report, Perspectives on Merger Integration, commented almost blithely that ‘Anyone who has researched merger success rates knows that roughly 70 percent of mergers fail.’ Further back in time, The Hay Group’s 2007 report, Dangerous Liaisons: Mergers and Acquisitions – The Integration Game, surveyed 200 European M&As and concluded that: ‘After a merger, more than 90 per cent of businesses believed they had failed to achieve their original aims.’ […]
Change comes attached to a quite a range of adjectives nowadays : inevitable, constant, accelerating, stimulating… ‘Big’ comes up a fair bit too. Despite Darwin’s efforts, discussions in the fifth floor and above favour revolution (although the chosen word is ‘transformation’) over evolution. But a recent blog posting by Neil Morrison, Group HR Director at [...]
If you want the pot of gold, you need a rainbow. If you want a rainbow, you win by including as many of the colours as possible. A rainbow with only one colour is just a stripe.
As an employee, my main concern while reading PwC's The Future of work – a journey to 2022 report was not so much that the two other alternative worlds that it envisages as co-existing with a ‘Green’ scenario’ were less attractive (the Blue World represents an amped-up corporate world that I found reminiscent of the backdrop painted in the film Rollerball, while the Orange World combines organisational fragmentation and outsourcing with a hefty dose of networking and technology), but that the prevalence of opportunities to locate oneself in a specific world would most likely be arbitrary.
Maybe it’s one of life’s lessons - albeit one of the ones that takes a little longer to sink in than, say, simultaneous equations or how to lie while smiling - that rewards and promises are far from the same thing, and that the things we see as being our longed-for ‘just desserts’ can quite often turn out to be, … well, just deserts. And life has a way of putting the sand into sandwiches.