Comments

Tom, they're not "unassisted suicides" because this is where one person voluntarily and with dignity dies. Most of these mergers are reckless car crashes in which innocent parties get killed or maimed and the driver walks away unblemished - and often times gets to drive a bigger car as a result!

Posted by Mark J Foscoe at February 9, 2006 10:22 AM

Richard D. Parsons has been a dino-fossil "leader" of TW for far too long - his head on a platter I say ... slow to axe him because he's a "diversity" guy Black "CEO" Brother in law's son leads HBO [Black] - thinks the same.

Plus TW headquarters at Columbia Circle - greed giant ego CEOesque monolith to their failure to provide benefit for shareholder owners. Via le Icahn takeover / breakup / whatever. "Small fast precision" wins the day ...

Posted by Sean at February 9, 2006 10:34 AM

Sean, you certainly have a way with words! I like it.

Posted by Tom O'Leary at February 9, 2006 10:58 AM

Hey Tom - when do you arrive in Bellingham? Just in Seattle visiting [Super Bowl robbery!] and got a parking ticket but was able to talk my way out of it somehow ...

Posted by Sean at February 9, 2006 11:20 AM

We should be there in May! First spending a week or so with my wife's sister in the big city of Buckley, WA then off to Victoria BC for a week or two to visit her brother, so we'll probably settle in to Bellingham in early June!

Why doesn't it surprise me that you were able to talk yourself out of a ticket! Fair play to ya!

I listened to the game on the Internet (radio - free!). I was sure that I was moving to the city of Super Bowl Champs - supposedly the refs played a part in the Seahawks demise. But good sportsmen don't make excuses. They just play harder next time around.

Posted by Tom O'Leary at February 9, 2006 11:47 AM

I think you have nailed it Tom. After reading Bossidys Execution book I am much more focused on alignment of strategy, operations, and people. I seldom see this alignment in these mergers. I do see the transaction fees for the brokerage houses and the new stock grants to the executives. "Synergy" as a basis for merger just doesn't hold water. I personally would not invest in any company were Icahn's name surfaces -too many skeletons of now dead companies.

Posted by walter white at February 9, 2006 12:35 PM

Tom, it's much easier to involve yourself in acquisition or divesting, than concentrating on the day to day business. Let's face it, on your resume which looks better, grew the company by 5% year on year or grew the company by 200%..(spent only $10bn doing it!). If CEO's would take the brave stand and focus on the business rather than what they think shareholders want, we might have more successful well liked companies.

Posted by Bob Hail at February 9, 2006 12:53 PM

Tom, cannot agree with you on these thougths - at least not totally.

Yes, clearly it is not the best thing for the CEO to get trapped in the M&A mania wave. and TW is one of the best examples for it

But you mentioned Big Farma - and this is a clear example of the opposite. The competition on the generic drugs market is so harsh that there is no way round than merging and using economy of scales and expanding the market share.
Inveting in R&D is not the way out as well - cause the will mean a suicide for generic drugs companies cause in short and even medium term they cannot compete with the original drugs makers

And this is only one example of where mergers can do good.

Of course I cannot see much reason in P&G buying Gillette but I cannot admire Steve Job's vision in his effort to team up with Disney

Posted by Sergiy at February 9, 2006 2:50 PM

I couldn't agree more in the case of Oracle. Perhaps we should spell it SINergy!

Posted by Mark D Polino at February 9, 2006 4:07 PM

i have said it many times (and it bears repeating)
synergy is 1+1 ... more than two parts is not true
synergy, and almost always bad news.

not that 1+1 is always a success story.

-ski

Posted by ski at February 10, 2006 7:04 AM

As someone who survived 5 buyouts in 8 years and watched the last one turn 3 $10 million companies into one $9 million one, I can identify with this. Pity the poor folks who have no control or share in it, but have to show up to work every day....until they don't. That's what we talk about a lot on the Cranky Middle Manager Podcast... http://cmm.thepodcastnetwork.com Tom, the invitation is always standing when you want to drop by......

Wayne

Posted by Wayne Turmel at February 10, 2006 9:49 AM

From personal experience, mergers don't always work out this way. I am currently one of many people who are working very hard to find and create some synergy (hate that word!) between two different cultures. But, we are making it work and we are succeeding. Maybe hard working front line folks who are tasked with making these things happen would be better served with concrete and helpful advice rather than the constant "all mergers suck" rant.

Posted by Mike at February 10, 2006 9:59 AM

Tom,

Remember that most people in the scientific community define synergy as a situation where the sum of the parts are simply "different" from the whole...

Or as Buckminster Fuller described it: synergy means the behaviour of the whole system is unpredicted by the behaviour of their parts taken separately...

With that taken care of - perhaps we could discuss the predictability portion of the statement. You have commented on the subject so many times it would seem that you are able to predict the behaviour of the "whole system" despite the fact that it is not congruent with the sum of the parts... when will we/they learn?

Posted by Tchad at February 10, 2006 10:42 AM

Great point Mike about valuing front line staff. Mergers usually take no account of their feelings and front liners are simply left to pick up the mess. As you know my opinion is that front line staff know all the answers all the time so I am with you 100%

Mergers are usually only about money and as we all know money will never be the motivation of the vast majority of people who go to work.

Posted by Trevor Gay at February 10, 2006 6:11 PM

Sure you can "buy" all the customers but as a customer what customer wants is the value product or service not more co-customers.

Posted by Frank J. Foti at February 13, 2006 4:11 PM