Manage Conflicts Between Line of Business Silos to Ensure a Successful Acquisition of a Competitor

In an article published on the TechCrunch site on May 9, 2013, titled Microsoft To Fold Yammer Sales Team Into Office 365, Identity Surfaces As A Core Focus, Alex Williams the author of the post notes “Microsoft also is making a point to focus on identity management and other issues as part of its road to full integration [of Yammer].” (quoted from Alex Williams’ article as published on TechCrunch. A link to the entire article has been provided here).

We’re not sure what Mr. Williams means by “identity management.” But we think it’s safe to assume he’s referring to “identity management” as the task of managing public perception of the product brand of the SharePoint component of Microsoft’s Office 365 offering as well as the same brand messaging for Yammer as the two products are integrated.

We’ll spend a couple of posts to this blog on the news Mr. Williams reports in his short post. A lot of tech businesses have attempted the same type of identity management in the past. This activity comes up as businesses are folded into one another as marketplaces consolidate. More often than not the efforts fail. As the emperor’s new clothes fall away, what looked to be a promising marriage of two organizations disintegrates into not much more than one business digesting another. It makes sense to eliminate competition, but buying them out is a comparatively costly method.

Most of the difficulties arise between line of business units (LoBs). Usually, as in this case, the recently acquired business is a direct competitor of an LoB with a lot of power in the acquiring business’ organization. Rather than fostering a healthy environment of contention, a decision is made to “fold” or “integrate” the acquired business into the new parent, as Mr. Williams has noted in his article.

Almost always this decision works to the detriment of the acquirer. More on this topic with the next post to this blog. If you’re grappling with a decision about whether or not it makes sense to buy out your competition, drop us a message. We would welcome an opportunity to learn more about your objectives.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

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