The Worst Merger since Time Warner and AOL?

The Evening Standard (London, England), July 2, 2015 | Go to article overview

The Worst Merger since Time Warner and AOL?


Byline: Anthony Hilton city comment

THE proposed merger between insurance broker Willis and pensions and benefits consultant Towers Watson may not yet qualify as the worst deal in history that accolade probably still belongs to Time Warner's purchase of AOL. But these are early days give it time.

Professional services firm Towers Watson has long been an organisation that defies management. It is staffed by people who generally speaking are far more interested in their relationship with their clients and using their professional skills than they are with being managed in to achieve some transitory corporate objective or other. That indeed is why the clients like them.

The role of the chief executive in an organisation like this is akin to herding cats. Some, by dint of their own personality and interpersonal skills, can actually drive the firm forward but they tend to be few and far between. More find that because the senior players in the firm own the client relationships, there is not a great deal the nominal chief executive can do to assert authority.

This is because it is a hallmark of professional services firms that the more money a partner or senior employee brings in, the less notice he takes of management. If these problems exist when a firm is on its own, they are magnified when it tries to merge with someone else. Indeed, it is widely believed that the only way professional firm mergers can have a chance of success is if they are limited in scale and ambition.

If the acquirer is massively bigger than the firm being taken over, those who don't like it either knuckle down or get out. But if the firms are of similar size, and the deal is being billed as a merger not a takeover, then forget it.

It simply means no one is in charge.

Thus even the split of board positions and of senior management roles so proudly announced as part of this deal is not a source of strength but of weakness. It reeks of a compromise and tough decisions kicked into the long grass in order to get the deal done.

What is curious is that these facts must be obvious to most of the people employed by the two firms, given they live with the reality every day, but they are going ahead anyway on the basis that this time it will be different. The idea of a culture clash does not seem to have occurred to them. They talk blithely of savings of $150 million (PS96 million) or so in five years when they are likely to lose that and more in staff and client defections in 12 months. Their competitors must be rubbing their hands with glee at the thought of the business soon to drop into their laps.

And that $150 million is a joke anyway. There is no mention of the additional costs of complexity, which are likely to more than dwarf those savings.

But as a more general point, no one goes into a takeover to make savings over five years they are made in the first 12 months or they don't get made at all. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Worst Merger since Time Warner and AOL?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.