Coalition – the business of politics – merger or acquisition?

Much is being made of the arranged marriage between the Conservatives and Lib Dems (the Con-Demned, as they have been described elsewhere). But, I see the coalition as less of a merger and more of an acquisition.

Take one party (“the party of the first part” as the Marx Brothers would say), which knows it is not really big enough to succeed on its own in very difficult trading conditions, where finance is extremely tight. It looks around and decides that it needs to acquire another party to give it the size and extra products that could appeal to a wider market at home and abroad and enable it to take some tough cost saving measures that could enable it to survive and achieve great results.

After all the negotiations and due diligence, Heads of Agreement are drawn up, the deal is done and the joint press conference takes place with good humour, bold plans and lots of talk of synergy and the usual guff.

However, the ‘party of the first part’ knows that the key to success in all this is sound post-acquisition management and decides to do it in a way that usually defeats most businesses.

First of all, take all the brightest and best of the acquired party’s talent and give them the tough jobs, the jobs where services must be kept yet costs must be cut. Give their sharpest intellect the job of identifying and implementing the whole raft of cuts to departmental budgets. Give their elder statesman a role that he will want to make a decent fist of because it is his last, and only, chance to make his mark. Have a committee to ensure the coalition – sorry, acquisition – stays true to its original intentions. Take the newly-acquired CEO and make him your deputy and keep him close by. Make sure he is as closely identified with the popular as well as the unpopular decisions that the leadership has to take.

You know what – the Conservatives could teach companies a thing or two about acquisitions, sorry mergers, sorry coalitions!! (If someone gives me an advance, I will work this up into a proper article or even a book!!!)

NB – I have tried to ignore that the ‘coalition’ is really a joint-venture. This is a ghastly structure which never works as one side tries to claim all the credit and shovel any blame to its greedy and unreasonable j-v partner and each clings to their differences rather than focussing on how much greater than the sum of the parts the whole can be.

Published on May 17, 2010 by Neil Thomas