Why business is like... Marriage

Mergers are often compared to marriage, which is accurate in one sense, at least - they often fail. Divorce rates are sky-high, and M&A has been said to destroy value in more than 70% of cases, the Daimler/Chrysler and Time Warner/AOL nuptials being prime examples. So it seems curious that M&A is once again on the rise, surpassing even the dot.com era figures. If our objective is sustainable growth, shouldn't we be looking elsewhere for inspiration? And can the field of human relationships provide any more useful analogies?

by Jenny Harris
Last Updated: 31 Aug 2010

Some relationship counsellors suggest cohabitation first - or, in business terms, a strategic alliance, which provides a way to dip a toe in the water. But research by Boston Consulting indicates that loose arrangments are just as hard to manage and frequently fail. Surprisingly, marriages that follow a period of cohabitation are even more likely to fail, perhaps because of the difficulty of shifting gear from a low-commitment relationship to something deeper. Which is interesting but not very useful if you're looking for a constructive model for growth.

So if neither marriage nor cohabitation offers much other than a warning sign, where should we look next? Maybe polygamy is a better means by which to expand the family unit. Johnson & Johnson, one of the most profitable companies in the world, has never undertaken a major merger, preferring instead to acquire smaller businesses and nurture them rather than absorb them. Its success over 100 years would suggest that this form of getting it on provides a more reliable model for sustainable value creation. We don't recommend that you apply the same rationale to your home life. Unless you live in Salt Lake City.

Jenny Harris is Young Businesswoman of the Year and director of JRBH Strategy & Management


Find this article useful?

Get more great articles like this in your inbox every lunchtime

Mike Ashley: Does it matter if the public hates you right now?

The Sports Direct founder’s response to the COVID-19 pandemic has drawn criticism, but in the...

4 films to keep you sane during the coronavirus lockdown

Cirrus CEO Simon Hayward shares some choices to put things in perspective.

Pandemic ends public love affair with Richard Branson et al

Opinion: The larger-than-life corporate mavericks who rose to prominence in the 80s and 90s suddenly...

The Squiggly Career: How to be a chief strengths spotter

When leading remotely, it's more important than ever to make sure your people spend their...

"Blind CVs don't improve your access to talent"

Opinion: If you want to hire socially mobile go-getters, you need to know the context...

The highs and lows of being a super-achiever

Pay it Forward podcast: techUK boss Jacqueline de Rojas and Google UK's marketing strategy and...