513
n
The urge to conquer
for size is not necessarily going to make a company more
successful.
This reminds me of the Aboriginals on the Micronesian island of
Ponapae. What in their society contributed to a man’s prestige
was owning a very large yam. This cultural trait had come into
existence because it represented an indication of a person’s skill
as a farmer. However, gradually people’s efforts to obtain or grow
one big yam started to be detrimental for their welfare, in the
sense that it distracted effort and attention away from all other
activities, causing malnourishment and hunger. People were
putting all their resources, time, and effort into growing one
giant yam, while their elds were left unattended, their huts
crumbled around them, and their children cried of hunger.
Similarly, striving for size itself may be counter-productive for
companies. It is quite possible that focusing all one’s resources
and efforts on becoming bigger (for the sake of being big) might
actually decrease a rm’s chances of becoming
successful. Gaining size may result from rm
success, but pursuing size, rather than success
itself, may be quite detrimental.
In Chapter 2 I showed why so often companies
seem to grow fast and appear successful while
some years later they are in dire straits. Using
some clear concepts and examples I will now explain where the
urge to grow fast comes from. I will also explain why it doesn’t
work. Specic attention is paid to the phenomenon of acquisi-
tions and to the role of individual CEOs and their ambitions.
I introduce the reader to Heineken (the company; not the
beverage), provide some chilling facts about the success rate of
acquisitions and, to lighten the mood, even share a joke (albeit
not a very good one).
Deal-eager executives – tribal instincts
In this chapter, you will see quite a few references to studies in
cultural and biological anthropology. That is because CEOs are
‘‘
striving for
size itself may be
counter-productive
for companies
’’
Business Exposed52
human too (yes, really) and leading a rm often seems to unleash
some primeval instincts. Moreover, an organization is, of course,
at the end of the day, just a bunch
of people. And bunches of people
– whether a tribe, a company, or
a mob – operate in particular, and
often quite similar, ways.
You will see that, in this chapter, I
also pay quite a bit of attention to
acquisitions. This is because acquisi-
tions especially seem to exemplify
(and amplify) top managers’ urge to rule and conquer. And that
doesn’t always bode well . . . Because where many top managers
seem to be overjoyed by size, they are often outright gung-ho on
acquisitions. These things really push the adrenaline pumps. Take
Ahold’s “fallen-from-grace” ex-CEO (now corporate convict) Cees
van der Hoeven. Ahold actually started out with quite a careful
approach to doing takeover deals, but over the years found itself
completely out of control, like Imelda Marcos in a shoe shop.
My guess is there are two causes of deal-eager executives. It is the
type of person who becomes CEO and it is the type of person we
make them. Let me now discuss the rst with you, and later in
the chapter turn my attention to the second part.
An interesting line of research in social anthropology analyzed
what type of person is more likely to rise through the ranks to
become the head of a tribe. Often, this would be the most erce,
ambitious, and aggressive warrior, who would be willing to take
on all his opponents in the quest for leadership.
Yet, interestingly, although characteristics such as erceness
and ambition would be helpful in becoming tribe leader, these
characteristics were not necessarily positive for the future of the
settlement, since these type of leaders were prone to take the tribe
to war. This would ultimately take its toll on the size, strength,
and survival chances of the tribe. Thus, the same characteristics
that would make people more likely to become the head were
likely to get the tribe into trouble.
‘‘
bunches of people –
whether a tribe, a company,
or a mob – operate in
particular, and often quite
similar, ways
’’
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