Strategy guru Gary Hamel earned a reputation for casting aspersions on the myriad acquisitions of the go-go dotcom era. He believed that, almost without exception, acquisitions were a poor substitute for strategy. Companies, said Hamel, bought what they couldn’t create.
That sure seems to be the case with the announcement of PricewaterhouseCooper’s acquisition of strategy consultant Booz & Company.
Strategy consulting is where the big bucks are nowadays. Industry analysts say traditional accounting and auditing fees earned by the PwC’s of the world are flat at best, while strategy shops such as Booz grow at 20 percent annually.
So, unable to build much of a consulting practice of its own, PwC bought one.
The Omnicom-Publicis merger is another example of buying what one cannot build. The mega coupling had nothing whatsoever to do with enhancing the strategic or creative work it did for clients. Rather, both would say they’re combining in order to compete with Google in the uber lucrative search and ‘Big data’ categories. Neither Omnicom nor Publicis possessed the smarts to do it alone. So, they’re getting married.
And, then, of course, there’s the human carnage that goes along with any merger between large entities. ‘Redundancies’ and ‘rightsizings’ leave thousands of souls looking for new jobs. And, many of the downsized zombies are middle-aged, high priced managers who, frankly, are virtually unemployable.
And, so, the top guys at Booz will walk away with ungodly amounts of cash, and the big dogs at PwC will get what they couldn’t create. But, to me, it’s yet another example of a large American company failing at what our country used to be best at: innovation.
Right now, Corporate America needs a whole lot more strategy and far fewer mergers.