The early months of a telecom merger often look deceptively well-ordered on paper.

Most merger models assume the integration will behave like an engineering problem.

In reality, it behaves much more like a political one – and needs to be managed accordingly.

One telecom executive once described this reality as resembling “Noah’s Ark.”

For a moment the metaphor puzzled me.

Then he explained.

Two of everything.

Two leadership teams, two network strategies, two IT stacks, two product portfolios and two operating models. The integration plan presented to the board usually promises to simplify all of this.

In theory the path forward looks straightforward. But that is not how integrations usually unfold.

The political battles usually start within weeks. At the start it is relatively easy to agree on the vision. The strategy slides line up, the ambition sounds sensible and everyone agrees on the destination. The real arguments begin when the conversation turns to execution.

How exactly will the work be done?

Who will run it?

Which systems survive?

Which processes change?

And do the two organisations actually agree on what matters most?

That is the moment when telecom integrations stop being design exercises and become negotiations about how the work will actually be done – and who will do it.

The reasons are not mysterious. The two organisations arrive with different histories, cultures, customers and operational experience.

In most cases neither organisation has a deep understanding of how the other actually runs day to day.

Each side brings its own habits, assumptions and ways of working, and the overlap is often smaller than anyone expected.

Without clear structure the debate can easily become dominated by one function – and sometimes by a single determined individual.

That is why the CEO has to take control of the organisational politics early.

Once the deal closes the integration stops being a design exercise and becomes a negotiation about power.

Unless that negotiation is managed firmly it can quickly turn into a very expensive political debacle.

Left unmanaged, these battles do more than slow the integration down. They distort design choices, protect legacy interests and quietly erode the economics the deal was meant to deliver.

The Technical Reality

That political reality quickly spills into the technical design of the integration.

On paper the plan usually looks straightforward: systems will be rationalised, duplicated platforms will disappear and the technology estate will shrink dramatically.

Integration models often promise dramatic simplification. One plan I recall proposed reducing roughly fifty operational systems to five.

That rationalisation program was abandoned within the first year.

Once engineers began examining the systems in detail it became clear that the simplification assumed in the integration model belonged firmly in what one colleague memorably described as a comforting fiction.

That’s when the politics stopped being theoretical.

Most large telecom systems exist because at some point the organisation discovered it could not function without them. Removing those systems means unwinding operational processes that may have evolved over twenty years or more.

In some cases, the systems are barely documented. The people who once understood them have long since left the business. In other cases, the integration plan assumes those people will still be around to help.

That assumption often proves unrealistic.

Mergers create uncertainty and some of the most experienced staff leave early. Others simply decide they would rather not spend the next two years dismantling the systems they built.

It is not unusual for an integration program to discover that the knowledge it was relying on has already walked out of the door.

In one integration I worked on, the only person who fully understood a critical legacy system had retired – and was living in a different time-zone on the other side of the world.

That kind of detail never appears in merger models.

The Experience Gap

This is where experience starts to matter enormously.

Telecom integrations are unusual programs because they combine engineering change, operational migration and organisational restructuring – all at once.

Leaders who have delivered programs of this scale before recognise the warning signs early. Leaders encountering them for the first time often underestimate the difficulty simply because they have nothing comparable to draw on.

The same question applies to system suppliers.

Large telecom integrations depend heavily on vendors and systems integrators, yet their capabilities are often assumed – rather than examined.

Running a successful product business and delivering a complex integration program are very different disciplines, but that distinction is rarely explored as closely as it should be.

The Financial Reality

The financial reality becomes less tidy once execution begins.

Synergy savings are usually presented as clear headline numbers, but the costs required to deliver those savings rarely appear in the same place.

Restructuring charges, capital investments, transformation budgets and program costs distributed across the organisation can all play a role.

None of this is wrong. These accounting treatments are entirely legitimate. But they rarely produce a single clean picture of the economics of the integration.

As a result, the story often has to be reconstructed afterwards.

That raises a simple question: what exactly are we measuring, and how?

In large integrations it is not unusual to see results assessed against a different baseline from the one used in the original merger model.

Once delivery becomes harder than expected, the measurement method has a habit of changing as well.

That behaviour is rarely malicious. It is simply human nature.

Understand the Political Battlegrounds Early

If this is how integrations actually unfold, a few practical questions matter early on.

·  In your integration, who’s actually managing the politics- and are they equipped to win the battles that matter?

·  Do we have leaders who have delivered something this complex before?

·  What is the Program Director’s track record?

·  And how exactly will success be measured?

Because once the deal closes the merger stops being a financial event.

Delivering a successful product and delivering a business-critical program are very different disciplines.

It becomes one of the most complex engineering and organisational programs the company will ever attempt.

The deal model creates the ambition.

The integration program decides whether it ever happens.

The uncomfortable truth is this:

Most merger models assume the integration will behave like an engineering problem.

In reality, it behaves much more like a political one.

Recognising that early will not eliminate the battles.

But ignoring it almost guarantees the integration will lose them.

And when integrations lose those battles, the economics of the deal rarely survive.

About the author

David Hilliard is founder of Mentor, specialists in strategic program execution.

You can call him on 0118 359 2444 or email david.hilliard@mentoreurope.com.