Published articles

Since its formation, Mediation has regularly published articles and been quoted in the major economic newspapers. Below you will find a few excerpts.


Les Echos - 17 april 2001, excerpt

The seven necessary thresholds of growth  

If growth is not always easy, it is sometimes because it happens too quickly. Growth takes time – any company must cross seven different thresholds. That is what is suggested by an analysis by Nicolas Rousseaux, head of the consulting firm Mediation. Nicolas Rousseaux looked at “adolescent” start-up companies – those that have grown but are not yet fully adult, or “grown up” as he puts it. “They are start-ups that have managed to survive. By definition, they have had to undergo rapid growth, in terms of financing, staffing, even their market offering. We need to identify the major difficulties, the major cultural shocks that face such companies and are specific to them as they become ‘grown-ups’.” (…)

1. From entrepreneur to manager. In undergoing such rapid growth, a start-up sooner or later faces the need to structure itself. The entrepreneur has to learn how to manage a growing team, put in place cost-control procedures, delegate power. (…)

2. From sole individual to social entity. Growth in staff numbers is difficult, in that it deprives founders of the personal control of their ideas, while at the same time conferring anonymity. (…)

3. From idea to brand, from innovation to banalization. In its first year of exsitence, a start-up works at bringing to market the innovation that warranted its creation. It must then face up to the commoditization of its initial idea it it becomes accepted in the marketplace.

4. From independence to accountability. The management team are initially charged with creating the conditions necessary for implementing their project. In a second phase, they must account for their actions and results in order to survive. They must prove that the innovative approach they are taking is viable, since they depend for financing on their shareholders and creditors: they must submit accounts.

4. From anonymity to credibility. A recently formed enterprise that is developing a novel approach faces a double problem: it is unknown, without any references, and is providing a new service or product that comes with no guarantee of efficacity, trustworthiness or suitability. 

5. From birth place to growth place. Moving from the premises where it was created to a necessarily more impersonal premises changes an enterprise’s entire complexion.

7. From supply logic to demand logic. The supply logic is inherent to a start-up because it is using a novel approach. It creates a need with its supply. (…)

Les Echos -  16 November 2003, excerpt


"Les Echos" continues its series of surveys into mergers and acquisitions. Once two companies have decided to get together, the union has to be implemented. While there are a number of necessary formal phases, there also has to be a great deal of pragmatism. Although combining management methods and production tools represents a major challenge, integrating teams and cultures is also an essential pre-condition of success.

Mergers: succeeding in unifying methods, tools and cultures (2)

Marrying teams remains a difficult art. Concern for a harmonious merging of corporate people and practice comes up against the inertia of routine.

Bringing two enterprises together also means in large measure unifying teams and cultures. (…) The risks involved are all the greater because the specific character of each of the two companies often goes deeper than is at first apparent. “It is absolutely essential to take into account not only the overall culture of the two companies, but equally their operational culture, which is embedded in concrete habits and methodologies and which is far less immediately obvious”, stresses Nicolas Rousseaux, head of consultancy Mediation.

This consultancy firm utilizes in the merger context a “corporate” approach, consisting of interviews with key decision-makers as well as a cultural “deep-core sampling” process. Based on some 70 criteria, this approach seeks to identify, among both managers and workforce, the peculiarities of exisiting operational cultures, with the intention of surfacing the strengths and weaknesses of the two merging entities. Groups then work on defining a new common culture. This is a good way to minimize the risk of conflict as well as avoid losing disaffected managers to the lure of the headhunter. (…)

Les Echos -  19 may 2003,  excerpt

The government unconditionally hands over to Crédit Agricole the keys to Crédit Lyonnais.  

Casa (Crédit Agricole SA) and the lion bank (Crédit Lyonnais) are organizing their integration

(…) The integration committee, comprising top management and other delegates of both banks, is the central hub organizing the merger.

The first stage in implementing the merger was to choose a consultancy firm. (…) Following two months of discussion, the two groups have jointly hired the Paris office of BCG and given the brief to Philippe Morel and Jacques Chapuis, who have both already worked on the Carrefour-Promodès merger and the Lafarge-Blue Circle project.

Casa has also hired other firms to work on more targeted projects. Eurogroup is to work on strategy, Mediation on cultural issues, and Altedia on communicating the share options reserved for employees expected in the autumn. (…) The merger teams meet in  “data rooms” and “tea rooms” set up in the two Paris headquarters in boulevard Pasteur and boulevard des Italiens. Support groups from the two banks are providing legal and IT back-up. Leaders have been named for future implementation teams and the consultants are preparing mini-seminars for merger preparation.

The cultural dimension will be one of the central issues in the merger. “Two traps could lie in wait for us”, a Crédit Lyonnais communication to its staff implies: “Navel gazing and hypersensitivity”. According to one consultant, succeeding in this kind of exercise calls for a culture that is “strong and cohesive, in order to be able to be decisive. That’s all the more difficult when it is a friendly takeover/merger”.

La Tribune -  10 December 2001, excerpt

How to survive a corporate merger

SURVEY • Corporate mergers, on the rise for some years, are testing management’s mettle. 

Taking a position   Sometimes this phase takes place in a stressful climate. “The nervous tension and stress experienced during a merger are the same as those described at the time of a bankruptcy”, recalls Nicolas Rousseaux, chief executive of Mediation, change audit and implementation firm. Moral harassment, excessive workload, unavoidable weekends away, loss of support staff, withdrawal of telephone and computer, office closure – all these are part of the “hard” version of a merger. Other causes of disillusionment can surface for all staff, despite the relative protection afforded by labor law. Nevertheless, no-one buys a company – or a skill set – that is worthless. Those managers who are “absorbed” are competent and are expected to apply their skills in the service of the new entity. (…)

The Wall Street Journal - 17 avril 2001, page 23, extrait


Winning at Mergers : Keeping the Stars On Your Team 

John Kelly was sitting at a beachfront restaurant during a holiday in Spain when his mobile phone suddenly went off. On the other end was a headhunter with the news that Mr. Kelly's employer, KPMG, and Ernst & Young had just announced that they were considering a merger. Would Mr. Kelly like to bail out? Well, the two accounting firms didn't merge after all, and Mr. Kelly has stayed put in London in the three years since, but the story illustrates an important point about mergers and acquisitions. Usually, when one is launched, the alarm bells go off : "Layoffs!" But in fact, acquirers often have the opposite problem : holding on to the key people, not just at the target company, but also in their own ranks. "It's a massive challenge to retain the right people," says Mr. Kelly, who ironically is a merger integration expert himself. (...) 

As Mr. Kelly knows from personal experience, the headhunters start circling within minutes. As do the competitors. And they know to come back again three months later when morale at the merged companies typically hits a low, says Nicolas Rousseaux, a merger integration expert. And then they try to lure away the executives who have survived, figuring that they must be the very best, says Nancy Hubbard, another expert. (...) 

There's a lot of talk about the so-called soft issues and corporate culture, and specialist outfits like Mr. Rousseaux's Paris-based Mediation have sprung up to help. The experts say more needs to be done. (...) 

Pharmacia's Mr. Coissac thinks merging the two corporate cultures is the key to success. As soon as he secured the key people after the Pharmacia-Monsanto Co. Merger last year, he turned to outside consultants to launch a year-long program of coaching and integration seminars to allow managers to express their fears and figure out a way forward together. These days, the experts say the general modus operandi - a.k.a. methodology - for a good merger goes something like this : Successful acquirers plan ahead, way before the merger is even launched. (...) 

(...), if you're having a hotshot fantasy about how you would threaten to walk if your acquiring company doesn't, say, triple tour bonus, uh . . . The consultants advise their clients not to succumb to such blackmail. 
"You're just not," Mr. Rousseaux says, "going to be able to build anything with those kind of people."

Pouvoir d'entreprise - september 2000


Mergers: The corporate culture dilemma

By Nicolas Rousseaux

Many mergers fail because of cultural clashes. Rather than passively accepting such incompatibilities, it is far better firmly to impose a new corporate culture on the created entity.

On 10 July 1998, just one month after the announced merger between Compaq and Digital, Eckhard Pfeiffer, Compaq’s charismatic CEO, sends an email to all his teams: “When companies merge, developing a common culture focused on the future is a critical element for success. Creating a strong culture will be no easy task”.

Nine months later, on 19 April 1999, during a crisis weekend, Eckhard Pfeiffer tendered his resignation.

The collapse in Compaq’s share value in the first quarter of 1999 (a fall of 50 percent between January and March) precipitated his fall. In explaining to Wall Street analysts their late announcement of poor results for this fateful quarter, the company’s top management pointed an accusing finger at “the lack of compatibility between Compaq’s and Digital’s reporting systems”. Quite symbolic.

Meanwhile, 1,400 of the 1,900 employees at Digital France (74 percent of the workforce) had refused the contractual conditions of the merger and opted to take advantage of the redundancy package offered by Compaq. Eckhard Pfeiffer, who had succeeded in increasing the Texan company’s turnover by a factor of 10 in eight years to reach $31 billion, had failed to achieve its merger. Once again, cultural incompatibility had reared its ugly head.

Victims of cultural shock

Cultural shock following a corporate merger has many victims in the headquarters of large groups, even when the merger appears to be working.

 The tricolor telecoms Polytechnicians at France Telecom found themselves up against the mavericks at Orange, led by a hippie capitalist feng shui devotee.

Just think of the Chrysler boss’s hand to hand with his counterpart at Mercedes-Benz. The taciturn Robert Eaton, holed up in his Detroit citadel, finally succumbed to the onslaught of Jurgen Schremp’s light brigades. It was the Germans who gradually took over the reins of the new entity by taking advantage of their more opportunistic culture. Or take Luc Vandervelde, Number 2 at Promedès, appointed by Daniel Bernard to lead the Carrefour-Promedès merger operation, who, finding himself increasingly isolated, threw in the towel after eight months to join Marks & Spencer. Culture, once again.

Paribas stars abandon the BNP ship? Culture, yet again. Alcan-Péchiney-Algroup’s suicidal overbidding with the European Commission? Culture, I tell you! Even the popular press has understood the cultural condition of companies: France Telecom buys Orange in Great Britain and there you have it, the very conservative École Polytechnique telecoms graduates head to head with Her Majesty’s “mavericks”, led by Hans Snook, a hippie capitalist feng shui devotee, one of whose claims to fame was to have been imprisoned by the Chinese for having made an unauthorized visit to the tomb of Confucius. A €40.3 billion operation’s profitability will thus be  measured by the yardstick of the cultural power relationship between the two groups.

Conceptual vagueness and lack of references

The problem is that, through over-use, the term “corporate culture” has become a catch-all encompassing all the reasons why even the best planned mergers fail.

It is true that there is some vagueness about these themes, which explains the current conceptual disarray. Corporate sociologists, ethnologists, psychologists, statisticians and Organizational Development specialists all have their own pet therories.

However, two major schools of thought can be distinguished: the “organics”, for whom culture is the intersection of different data/givens (essentially, historical, social, national and psychological) that constitute the context for action, a sort of heritage to which one has to adapt in order not to be devoured; and the “constructivists”, who, by contrast, claim that culture is the sum total of convictions carried into action, which can be directed and enriched. In the first case, one is passive; in the second, voluntary action is primary.

But even with this approach, the techniques of cultural architecture are not well known. Companies that “know” how to create a culture often do so by using their own alchemy, which is not made systematic and is often confused with the “genius” of the founder or of a significant group (Jobs and Wozniak at Apple, Marcel Paul for EDF, Polytechnicians at the SNCF). Those very rare cases that have systematized their approach have made of this skill – built on experience over time – a veritable industrial secret. Look at Michelin.

Corporate culture is so essential that… there is no-one with direct responsibility for it. Alongside the Chairman and the CEO, there is typically an HR Director, a Communications Director, a Director of AF… No high-level manager is specifically in charge of cultural levers.

It is such a context that explains why management is so often caught short by the cultural undertow effects provoked by a merger, or by other significant strategic shocks: alliances, partnerships, restructuring (reorganization), divisionalization, privatization, market deregulation….

 “By laying the weaknesses of the two protagonists in a merger alongside each other, it is possible to anticipate potential conflicts caused by: conspiracies of silence, reluctance to share information, power struggles…

Rule #1: Adopt a voluntarist attitude…

The operational mode is quite straightforward and rests on three conditions.

The most important is to give unhesitating preference to the “constructivist” analysis of corporate culture. In other words, consider that a culture is constucted according to the voluntary action of its leaders. It is therefore necessary to forget the vision of the Levy-Strausses of the economic world that concentrate on “tribes” (a fashionable concept totally bereft of operational effectiveness), which maintains that corporate culture results from an organization’s lethargy.

A vision should on the contrary be simple, pragmatic and voluntary. Corporate culture is defined as the totality of conditions for action in a company. These conditions are the product of a conviction (not of a coercion) which, rather than being part of a company’s formal dimension (ie, its strategy, structure, processes), are lodged in its informal dimension.

This informal dimension comprises three elements:

The leadership traits of its managers, ie, their ability to drive forward, their will and their vision;

Symbols, ie, signs, appearances, explicit values, habits;

The socialization system, whether this is individual behavior, relationships between groups, towards external partners and customers…

All three elements need to be taken into account when determining the character of the new organization that will be created from the merger that is under way.

Which is precisely what Eckhard Pfeiffer was not able to do. Compaq’s ex-CEO considered corporate culture as merely a lever for communication, expressed in the best possible language: “In taking advantage of our past and present strengths and considering what we want to become, our trans-functional team has developed a new set of values destined to form our common shared platform”.

… and control a huge potential for violence

When a merger is under way, it is unrealistic to imagine that the two actors are going to couple under their own steam, brought together by the sheer irrepresssible force of love. Quite the contrary, the two protagonists face to face take a malicious delight in eyeing each other up. It is by very quickly laying each organization’s weaknesses alongside one another that it is possible to detect and anticipate the location, level and type of potential conflicts between the two. Such conflicts can have any number of causes: misunderstandings, reluctance to share information, conspiracies of silence, imbalance between discussion of profitability (cost reduction) and discussion of motivation (together, we can achieve more), delays in appointing an executive board, contracts lost through latent uncertainty, lack of responsibility, etc. ….

A merger between two entities contains an enormous potential for violence at all levels of the corporate hierarchy. This is because a merger calls into question the history, the heritage, the stability, the workplace, the job one has, the future of the brand with which everyone identifies, etc. …. This profound, brutal, immediate questioning of a company’s “fundamentals” is of concern to all personnel in the two entities, which lose their distinctiveness in the act of merging.

Rule #2: Make audit a driving force for the merger

The second rule is to avoid confusing the diagnosis of corporate culture with its normalization. The role of a expert consultant in an “audit”-type project is to be inspired by the rules in place in the Art School rather than those followed by a radiology specialist. At times of transition, managers need to look at their organizations as individual entities and independently from their business, as human artefacts that can be transformed. Better to be a Velasquez than a Doctor Schweitzer!

Audit is a magical moment, when the intuition of possible change can “overturn everything”, to paraphrase one bank CEO. During a recent merger, he experienced the feedback from the cultural audit, in particular the measure of the power relationship between the company’s two dimensions – formal and informal – as the realization of a possible reverse merger scenario (in which the target company takes power in the acquiring company). Which is what later proved to be the case.

The audit thus tends to reveal the political situation in the company (discovery of assumptions) and a tool for taking control of its destiny. The difference between the medical auditor and the artistic auditor is that the former limits himself to determining the options while the latter brings a vision (the dream of soldiers in whom Napoleon drew up his victories).

 “Managers need to look at their organizations as individual entities and independently from their business, as human artefacts that can be transformed.”

This second, evidently more effective approach enables, for example, a management team that faces an internal cultural transformation challenge provoked by the merger of two entities to be brought into alignment. Or again, before the launch of a merger, it enables a phase of due diligence to be undertaken on different sensitive issues: identifying the entities’ respective performance levers; measuring the success track record in each one; carrying out a motivation/stimulation check-up in each; determining the match between the two entities’ characteristics and those of current or future partners; identifying inconsistencies between the internal/external communication styles of the two; measuring the leadership positioning and influence in each. All of this is a far cry from the classical tools typically used for assessing the social climate.

Rule #3: Define a cultural reference model

The third rule for preventing a merger from coming to grief on cultural problems is to put in place as soon as possible some structural points of refence within the new organization. The most important of these is the corporate culture model to which the newly constituted group will refer. This model determines, at the heart of the new entity: the action drivers, constraining factors, the desired culture (without categorizing it), and the foundation of a medium- and long-term policy that is unaffected by day-to-day operational constraints.

Using this approach, a young four-year-old start-up was able to move from an oral to a written culture, in an effort to stabilize its growth and prepare for its stock-market flotation, without reducing its dynamism or stifling its creativity.

In the same way, Claude Bébéar, for example, was able to develop the Axa Group by constructing a cultural model based on his integrating expertise. The creation of a company university in Bordeaux and a company-wide Axa language, well before the acquisition of Compagnie du Midi, further contributed to the insurance group’s continuing success.

Not without good reason, the Schneider Group chose to take the opposite route, preferring to retain the brands of each of the companies it acquired over time (Télémecanique, Merlin Gérin, Square D, Modicon). In his own way, Didier Pineau-Valencienne learned the lessons of the psychodrama he lived through during the acquisition of Télémecanique, by deciding not to prevent employees from declaring their allegiance to one or other of the group’s brands. There again, the merit of the scheme was the clarity of the model chosen.

 Companies that ‘know’ how to create a culture often do so by using their own alchemy, which is not made systematic and is often confused with the ‘genius’ of the founder or of a significant group.

However, the corporate cultural model is not the only indispensible structural reference in the context of a merger. Another essential ingredient is to put in place, at the heart of the organization and at the very highest level, close to the Chairman or CEO, a structure responsible for cultural problems over time (and not merely at the time of the merger). French corporate groups have not yet reached this level of cultural sophistication. Even those companies that are known to have integrated the cultural dimension into their strategies, such as Carrefour, Accor, Axa, to name but a few, have not yet gone so far as to include a Cultural Director in their executive boards. But all that may be about to change in the very near future.

Executive summary

  • Corporate culture is all things to all people. Yet, while everyone today agrees that it constitutes a key ingredient in a strategy’s success or failure, especially in mergers, few actually use it as a lever for action.
  • There are three reasons for this confused situation: a plethora of more or less scientific theories on the subject; company experiences or examples that are the result more of alchemy than of architecture ; and a lack of cultural decision-making consistency at the top of the organization.
  • Corporate culture can, however, constitute a powerful and unique competitive advantage. But only if its influence is carefully defined (all the conditions of action that come from conviction: leadership, symbols and socialization system) and a careful balance is maintained in the power relationship between an organization’s visible and invisible dimensions (notably its “political” situation).
  • The final stage involves determining precisely what references are necessary for creating a cultural model adapted to the structure that results from the merger. Determining the two companies’ contributions hinges on the choice of engines for action and their validation, as well as on the way in which the basis for corporate policy is characterized, expressed and codified.

[Curriculum vitae/Biodata/Biodonnées]

NICOLAS ROUSSEAUX is the founder of Mediation, an international consulting firm that assists managers to work on their companies’ cultures in order to prepare or implement major strategic movements. Created in 1996, Mediation is one of the first firms to have put in place implementation methods based on an active acknowledgement of corporate culture.

M Rousseaux is author of two books on the corporate world: Management Meanings, an essay on the future of managers in Europe (Éditions Village Mondial, 1996) and Enterprise Worship (Éditions Autrement, 1988), a multidisciplinary analysis of the growing importance of corporate culture. Holding a Diploma in information and communication science, he has lived and worked in some 50 countries.

Le Figaro Economie - 6 December 1999, excerpt

NICOLAS ROUSSEAUX President of consulting firm Mediation, motivation specialists  

Managing cultural differences

How far does managerial buy-in contribute to the success of a merger?

Studies carried out in the United States and the UK show that 85 pecent of failures are tied to problems of corporate culture – which comprises communication, management, nationality, integration method. In Europe – and particularly in France – in the past few years, top managements have come to realize this and the cultural dimension is given far more recognition. But that realization has not yet reached the point where culture is taken into account ahead of the purchase decision. The merger choice is always made by finance people, following a classical strategic vision of external growth. The question of cultural shock is only a secondary consideration.

Once the decision has been made, how do you get the teams to collabrorate?

In any merger, the first thought is for organization charts, strategy, sales networks, production capacity…. It’s just as important to consider what I call the invisible dimension: people, team spirit, work habits, the strengths and weaknesses of each company, language, etc. With our clients, we use a system of “cultural deep-core sampling”. Based on in-depth interviews with all categories of personnel across the company, we aim to identify in each organization the sources of energy and weakness, and to determine the risks (potential conflicts, pockets of resistance) to be avoided and the opportunities to be seized. This mapping of the two companies then enables top management to decide quickly on a communication strategy designed to avoid the risks and to put in place appropriate motivational tools.

Is it absolutely necessary to merge the two cultures?

It all depends on the companies. Rare is the merger in which two companies combine their strengths, manage their weaknesses and create a third culture. Far more typical is the scenario that I call “cultural tidal wave”. The stronger culture, typically that of the acquirer, wins the day and leaves its mark. In the Axa-UAP merger, for example, Axa’s very powerful corporate culture very rapidly took the upper hand. You can also see a “showdown”. Both companies have powerful cultures that cannot be ignored. In such cases, they either retain their peculiarities or they merge only in certain activities. The merger takes place only on an operational level and only very slowly. A merger can just as easily take 20 years as two years – there is no single typical situation and no single solution. It all depends on the relative weight of the companies, on their history and on the levels of resistance.

What kinds of resistance are typically met?

The timetable is always the same. To begin with, disbelief: it isn’t possible. Then, anger. Then, waiting for the new organization: appointments, territorial division. Finally, reaction: Do I stay, do I go? Some companies, having played the cowboy too much despite management’s declared intentions, have provoked wholesale exoduses of talent. How can companies make the most of a merger if they don’t retain their best talent? This is a real challenge for top management, who have to make a quick announcement of their strategic plans and work with HR management to find the best motivational tools. Once confidence has been eroded, it is very difficult to get it back.

L'Expansion Management Review December 1995

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