Leadership Turn

Yahoo and Microsoft—dot com meets Internet idiot

by Miki Saxon on February 3rd, 2008

Logo courtesy of David Armano by way of AbleBrains

To a great extent, mergers succeed or fail based on cultural compatibility and leadership’s ability to integrate the two cultures.”…at least 60 percent of all mergers fail to achieve their goals, according to research by consulting firm Oyster International. That’s partly because leaders fail to recognize that people issues are just as important as market synergies, says Mark Williams, a Bethesda, Maryland-based organizational psychologist and author of Fit In! The Unofficial Guide to Corporate Culture. “ The informal cultural issues that can sink the merger are often underwater and underground,” Williams says.

According to three Booz Allen Hamilton experts writing for HBS Working Knowledge there are Nine Sins that can cause a merger to fail and although it’s way down in seventh place it’s the one that everyone is talking about.

Sin number seven: cultural disconnect
Bringing disparate groups of people together as one company takes real work and represents an effort that is often largely overlooked. Culture change management is not indulgent; it is a critical aspect of any transaction. However, simply acknowledging the issue or handing it off to specialists is not enough. Management must set a vision, align leadership around it, and hold substantive events to give employees a chance to participate. Detailed actions and well articulated expectations of behavior connect the culture plan to the business goals.

Nothing I’ve ever read leads me to think that Steve Balmer is going to show any great sensitivity on this issue let alone work on it personally—after all, he has really important stuff to do.

But to some, the more discord the better—the headhunters in the Valley and Kirkland are drooling and I doubt that Google is shedding any tears over the the bad cultural match.

Of course, there’s always a chance that they won’t screw it up.

I love Steve’s final comment over at AbleBrains, “On the flip side, I hear that Microsoft employees are pretty bored and bordering on complacent these days and things over at Yahoo are downright depressing. Maybe such a deal might actually get both engineering teams energized and ready to fight the fight against Google! Now that would be a fight I’d pay to watch. Hell, I’d want to get into the middle of it!”

Steve’s right. It’ll be better than anything Hollywood could come up with and a lot more fun (and interesting) than the upcoming election.

What do you think will happen if the cultures come together?

Your comments—priceless

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