LONDON, Jan. 23 1973 ‘A merger of the British Overseas Airways Corporation and British European Airways into a new airline was announced today by the British Airways Board. The board, which runs BOAC and BEA, both state‐owned, said it was going to phase out their names and replace them with the single name of British Airways.’ New York Times
It’s a curious thing to read. It’s so bare in its announcement. But a year later came the news that: ‘On March 31, 1974, BOAC and BEA were merged to formally establish British Airways. The combined entity began operations together on April 1. … 1974-77 was a difficult period of time due to all regional divisions in the integration.’
I joined British Airways more than 25 years later, yet colleagues were still ‘them and us’, on BEA and BOAC. Long servers knew which airline each had come from and retained the cultural norms and attitudes of ‘their airline’. Over the years, I’ve noticed the strength of cultures, and it doesn’t have to be at an organisational level. Try merging two teams and you risk getting cultural dissonance. Look at a more recent example in the Boeing/McDonnell Douglas merger.
As McKinsey notes, ‘Cultural factors and organizational alignment are critical to success (and avoiding failure) in mergers. Yet leaders often don’t give culture the attention it warrants—an oversight that can lead to poor results. Some 95 percent of executives describe cultural fit as critical to the success of integration. Yet 25 percent cite a lack of cultural cohesion and alignment as the primary reason integration efforts fail.’
McKinsey defines ‘culture as the outcome of the vision or mission that drives a company, the values that guide the behavior of its people, and the management practices, working norms, and mind-sets that characterize how work actually gets done.’
What McKinsey doesn’t mention is the link between culture and identity which I think is a critical factor. A merger could be felt as a form of identity theft, and I wonder if exploring mergers from the perspective of identity would be useful in making them more successful.
This idea came to me as I read Tim Harford’s book, Messy. In it, he says, ‘Attempting to put two tight-knit teams together in a single organisation can present the organisation’s leaders with a severe headache’. He goes on to discuss the 1954 Robbers Cave experiment.
The goal of this study was, in the words of Maria Konnikova, the writer of a Scientific American article, ‘multifold: to see how quickly group identity could become established among strangers, how fixed or flexible that identity was, how it would play out in competitive settings with other groups, and how the group conflict dynamic could be mitigated after the fact.’
It turns out that in the experiment the two groups could be harmonised up to a point, but as Konnikova says, ‘Alas, it’s easier to bring together eleven-year-old boys in a camp, who have everything in common save for an arbitrary group designation. It’s tougher to do so in the real world. Subsequent studies have shown just how easily groups are formed, on the most arbitrary of bases —and how hard they can be to unform. As the stakes rise, as the diversity increases, as the group identification becomes based on something more than a random division into cabins, so too does the difficulty of unraveling the enmity increase. … Groups form easier than they fall apart.’
As groups form, they develop a group identity. I was struck by an 8 February 2020 article, on a UK football team West Ham titled ‘West Ham’s culture and identity are slowly being stripped away as Man City prepare to pile on the pain’. The byline reads, ‘Relegation is a serious threat this season but the biggest concern for West Ham fans is the direction in which the owners have steered the club off the pitch’. The story is that the owners persuaded supporters to believe, on a ‘shonky sales pitch’, that moving from their original stadium to a new one ‘was the path to a better future’.
The outcome of this is ‘a sense that supporters could live with defeat and disappointment on the pitch. What they cannot stand is having their identity taken away. [Manchester] City may tear them apart on the pitch tomorrow but West Ham’s owners are stripping the culture away from the club. That will do more lasting damage than any relegation.’
The article links the well-researched field of culture and identity. (Google scholar lists 4 million items on the search term). The West Ham move is not a merger, but it seemed to me that, as in a merger, the strength of identity, at both group and individual level is a force to be reckoned with. To me, this article implied a form of identity theft.
Going down the identity theft route a bit, the research articles I found all showed a connection between the theft of identity and the emotional toll it takes. For example: ‘This exploratory study examined the psychological and somatic impact of identity theft and coping methods utilized by victims. … The majority of participants expressed an increase in maladaptive psychological and somatic symptoms post victimization. … The results from this study suggest that victims of identity theft do have increased psychological and physical distress, and for those whose cases remain unresolved, distress is maintained over time.’
A bit more digging about and I uncovered a 2018 research article, Individual and Organizational Identities in Merger Contexts: A Boundary Perspective. It’s a fascinating article, examining individual and group identity in terms of boundary theory. One of the researchers eight propositions discusses the relationship between individual identity and the merged organization’s identity. Here again, it comes close to the notion of identity theft – the authors quote at a group level: ‘These situations of seeing our company’s identity being violated kept accumulating’. And at an individual level: ‘The company born from the merger made me a bit uncomfortable because it no longer has anything to do with me. It doesn’t look anything like me; it isn’t a place I would choose to work today.’
The authors of this paper report that ‘This was the first study to explore the interface of the boundaries between individual and organizational identities in merger contexts’ and, like them, I’m left wondering whether mergers could be more successful if, in merger situations we took close account of the possibility that group and individual identity are important factors that are not usually considered in the planning and activity surrounding a merger.
If we don’t do this, we risk people feeling a similar distress to that felt in individual identity theft. What’s your view? Let me know.
Image: Identity theft