Fishburn Hedges

20.05.2010

The last week has seen one of the most rapidly-assembled mergers in living memory, with the political marriage of convenience between Conservatives and Liberal Democrats, celebrated today with the publication of its programme for government.  

However, while it all seems rosy now, the litany of failed mergers in the corporate world suggests there may be trouble ahead. 

Lessons from business

Speeches, photocalls and general bonhomie between the leaders have all been designed to show a seamless transition and an easy integration between the parties in a united, collaborative government. 

Academic studies, though, have shown that many corporate mergers simply don’t add the value they are expected to. 

Lack of effective engagement is often one of the causal factors: a failure to unite employees from two previously competing organisations - who have previously followed different visions, strategies and values - in pursuit of a new sense of shared purpose.

Without sufficient focus on building that collective vision, and clear ways of working to support it, the merged entity can too often be akin to a house built on sand. 

Parallels with the coalition

There are clear parallels with the new coalition arrangements. 

Our new leaders and their parties come from very different perspectives but are now now meshing ideologies, policies and priorities to create a single governing entity. 

They have articulated underpinning principles, but this can only be the start.  The leaders and officials will have to build on these agreements with a concerted programme of activity to inform, involve and support employees and party members.  

This is as crucial in this situation as it is in corporate mergers: employees and members need to understand the vision, so they can see where they fit in and feel more confident about the future. 

Greater confidence and belief will help to keep the marriage together during moments of tension or disagreement on the road ahead.  

A complex challenge

In many ways, the unique circumstances of this marriage raise the stakes. 

In a corporate merger, leaders have time to stimulate and support a collective vision and cohesive culture. The change is permanent and there’s no turning back. 

Here, not only is the marriage temporary, but the parties join only at the point of government. They continue to operate independently – and in rivalry – at local levels.  

The Leaders will face a real balancing act as they seek to gain sufficient understanding and acceptance of the coalition arrangements whilst ensuring that the parties maintain their sense of distinct identity. It’s not a task that can be left to chance.

Getting it right

Messrs Cameron and Clegg must therefore communicate relentlessly their collective vision, their rationale for working together and what the merger does/doesn’t mean for their parties. 

They must celebrate successes, however small, as these provide ‘proof points’ to bolster credibility and strengthen commitment. 

They must make sure their members – within and, crucially, outside Westminster – can raise questions and receive answers. 

Finally, they must react and respond to criticisms or inaccurate statements from anyone involved in the merger, before these fester and undermine confidence. 

As many businesses have found out, striking the deal is the easy part. Making a merger more than the sum of its parts is far, far harder.