M&A – respect and contempt

Why are some mergers and acquisitions brilliantly successful, while most under-perform miserably?

In my experience, it has nothing to do with the numbers – critical mass, cost-savings etc.

It’s something to do with mutual fit. But it’s much more to do with mutual respect.

When Saatchi & Saatchi merged with Garland-Compton - the hottest creative ad agency in the world (but with a somewhat iffy reputation for strategic thinking) went to bed with an excellent strategic agency, who served Procter & Gamble and Rowntree, two of the most demanding and professional clients. So certainly there was a good fit, but, more than that, the people inside the merged business respected and valued each other for their complementary skills and talents from day one.

The result was an inexorable rise to number one, first in the UK, then worldwide.

More recently, when the Interpublic holding company merged two of its global networks, Lowe and Lintas, there were apparently the same ingredients. A leading creative agency with a strong strategic one. But there the comparison ends. Contempt, “sharper than a serpent’s tooth” (as King Lear puts it), was the order of the day. Particularly on the side of the dominant partner, Lowe.

The result? Two plus two equals one. Mass exodus of clients and staff, and a slump in all key markets around the world. (The agency I had chaired in Sydney went from Top 5 to bottom of the Top 50 inside two years.)

It’s never struck me that M&A marriage brokers know this, focused as they are on the numbers (and in particular their own bonuses).

Poker and the Creatives

At the same time as my day job in the mail-room of JWT at 40 Berkeley Square in the mid-1960s, and playing rock music with the Idle Hands, my main source of income came from poker. Four hours a day, five days a week. I did two shifts – over lunchtime and early evening.

Initially I played with the school in the media department. They were far too good for me. Cautious. Analytical. Poker-faced. And in my youthful, impoverished state, I certainly could not afford to lose. What I gained, though, was a good working knowledge of both strategy and tactics.

Luckily, one day I was invited to sit in with the creative department school. This was the life. Not great at the game, all of them earned substantially more than me, and I could walk away from the table with winnings regularly.

As a bonus, they were such a joy to be with. Open, talented, witty. I don’t remember all their names forty-five years later. Two that vividly remain with me are the outstanding Australian artist and designer, Ken Done (above), and the delightful young writer Llewellyn Thomas, son of Dylan Thomas.

It’s not that I learned much about poker from that school. What I did begin to appreciate was something much more important - the way that highly creative people are, how they function.

Strategy first?

We had a Creativity Research Network meeting yesterday at beautiful Kent University in Canterbury – Creative Campus was the theme of the day – and it was followed by the opening of the newly transformed foyer of their Marlowe Building, just one of the Creative Campus initiatives.

Making the necessary unveiling speech the Senior Deputy Vice-Chancellor, Professor David Nightingale, observed that many of the most interesting innovations are born out of individual and team passion, not resulting from any particularly well-formed strategy. In fact, he went on, so often the strategy is only formed once a new idea has been both born and successfully implemented.

It made me think of my time at Saatchi & Saatchi. I had been brought up before Saatchi in highly disciplined, “professional” advertising agencies, where the strategy would be sweated over for months, sometimes (as with P&G) years. When, and only when, that phase was totally complete would the creative people be approached to start work.

What I discovered at Saatchi’s was that, invariably, the best, the most exciting and salient work would be created in exactly the opposite direction. Long before a strategy had been formulated (or even thought about in any depth), the creatives would be presented with the product or service and challenged to come up with something brilliant. When they had achieved that, the strategy behind their work would be formulated and researched.

The work was then presented to client in the usual sequence: strategy then creative. After all, that’s what clients imagined to be the only “professional” way. How shocked they might have been if they had discovered the truth.

It changed my own thinking dramatically. In fact, there may be something profoundly dulling in the traditional sequence. How inspiring that Professor Nightingale should know all that.

Do you have examples of brilliant new ideas preceding strategy?