M&A WAR STORIES - The Good, The Bad and The Ugly

ALCATEL LUCENT: THE TYRANNIES OF DISTANCE, LANGUAGE, CULTURE AND PERSONALITIES

July 15, 2021 Robert Heaton & Toby Tester
M&A WAR STORIES - The Good, The Bad and The Ugly
ALCATEL LUCENT: THE TYRANNIES OF DISTANCE, LANGUAGE, CULTURE AND PERSONALITIES
Show Notes

 A Frenchman and an American walk into a bar and over pissaladière and fried chilli chicken wings come up with the idea of working together and operating efficiently from their respective home turf to compete cost effectively with  competitors from China and Asia Pacific. What could possibly go wrong

On face value, the merger of Alcatel and Lucent was a necessity to ward off serious global competition from Huawei and other telecom competitors. The combined strength of both organisations made sense and joining their respective technologies even more so. 

BUT - dig down under the covers and there are several ingredients that make a recipe for disaster. French cuisine and America's lack of anything  'cuisine' would result in a disastrous recipe and this was no different in the 2006 merger of US based Alcatel and French based Lucent.  So what were the unsavoury ingredients?

  1. Good old CULTURE. And in this case, cultural differences that played out not only at the company level but also in a national sense.
  2. Tyranny of distance - two company's separated by huge distances and timezones does not make for efficiency leadership and agile decision making
  3. Language and National cultural challenges. THis aspect doesn't need explaining.
  4. Disconnect and delay between strategic vision and execution at the operating level
  5. Limited ability to compete cost effectively on a global stage

As always, there are good and not so good lessons to be learned, but you might need to listen to the podcast to find that out.