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Death of a firm

In the words of the cliche, the imminent disappearance of the HBH name was shocking, but not surprising. Ian Cundell offers a personal view of a cultural clash that doomed what looked like the perfect merger.

There is a biological idea called Random Genetic Drift. It's fairly simple: Divide a population and the halves drift apart - genetically speaking - until, in some cases, they can no longer interbreed.

Companies have their own equivalent of this phenomenon. People who share a common training, share a common professional language, perhaps even went to the same school, end up in different companies. They experience a myriad of different influences, sometimes subtle, sometimes profound. Differerent clients place different demands, and different partners play the corporate games in different ways. They drift apart. Corporate culture is born.

Herring Son and Daw and Baker Harris Saunders looked a perfect match. They were the same species, trained for the most part at the same professional school, with complementary skills. But genetically they drifted apart. They couldn't interbreed. Two utterly different cultures clashed.

The consequences are well recorded. The merged group often gave the impression of lurching from crisis to crisis and, between crises, the two halves of the merger seemed to be in a state of armed truce. In truth there was, occasionally, outright civil war.

Yet there had been vision. HBH had been first to the market with corporate real estate consultancy, through CPC, yet this came to nothing. There were huge cost problems in America, but it was obvious that directors given resposibility for CPC did not understand or appreciate the concept and equally that senior management saw it as a part time job. Surely, no way to develop an idea.

Things improved when Baker and Harris took charge and the market largely saw it as reverse takeover. But I doubt that they were ever allowed to take the helm properly, and it surprised few when they too gave up in frustration, allegedly amid further merger talks.

Those trying to push innovation found themselves constantly frustrated. People who played the pointless political games better prospered. Those who just wanted the commitment that would allow them to do their job well looked on in dismay.

The cancerous disaffection spread and those who weren't pushed began to jump. By my count the company lost twelve directors in 1994 and a total of about thirty five professional staff (surprisingly few through redundancy). No people business can withstand that rate of attrition.

Lambert Smith Hampton's 'federal' approach looks designed to avoid cultural clash, and word is that, so far, it has worked. If it can recover from the truama of rationalisation, those who survived the bad years should at least be able to get on with their job. I hope so. Without 'breeding' there is only extinction.

© 1996 Ian Cundell

Originally published in modified form in Estates Times