Washington DC
Was there anyone who honestly believed the Alcatel-Lucent merger would deliver as promised? Six consecutive quarters of losses after only seven quarters of attempted integration finally forced the ouster of Chairman Serge Tchuruk and CEO Pat Russo this week.
The simple truth is that the vast majority of large-scale mergers of this nature rarely deliver as promised. Of course, most large-scale mergers of this nature are not mergers. They are acquisitions, pure and simple. The dominant, acquiring organizational culture almost always crushes the acquired culture, despite contrived projected financials and pre-deal rhetoric about synergies and mutual best practices. The Alcatel-Lucent deal was further complicated by matters of divergent national cultures, too.
Why do we continue to accept inflated expectations surrounding big mergers? And why upon their failed-merger departures do executives like Tchuruk make matters worse by saying things like, "I am proud that Alcatel-Lucent has become a world leader in a technology which is transforming our society," with Russo adding that "I am very pleased with the progress we are making." (Fortune Daily Briefing, July 29) It is hard to tell whether the words or the deeds are worse, since language masks the real merger challenges and then spins the results so as to reduce our ability and willingness to learn from merger history.
Was there anyone who honestly believed the Alcatel-Lucent merger would deliver as promised? Six consecutive quarters of losses after only seven quarters of attempted integration finally forced the ouster of Chairman Serge Tchuruk and CEO Pat Russo this week.
The simple truth is that the vast majority of large-scale mergers of this nature rarely deliver as promised. Of course, most large-scale mergers of this nature are not mergers. They are acquisitions, pure and simple. The dominant, acquiring organizational culture almost always crushes the acquired culture, despite contrived projected financials and pre-deal rhetoric about synergies and mutual best practices. The Alcatel-Lucent deal was further complicated by matters of divergent national cultures, too.
Why do we continue to accept inflated expectations surrounding big mergers? And why upon their failed-merger departures do executives like Tchuruk make matters worse by saying things like, "I am proud that Alcatel-Lucent has become a world leader in a technology which is transforming our society," with Russo adding that "I am very pleased with the progress we are making." (Fortune Daily Briefing, July 29) It is hard to tell whether the words or the deeds are worse, since language masks the real merger challenges and then spins the results so as to reduce our ability and willingness to learn from merger history.