We are not here to drain the pool - Companies smother the culture they purchase.

Large companies purchase smaller ones to enter new markets, buy IP or get an edge that they couldn't otherwise make happen.  It is crazy but then they often integrate those acquisitions into themselves often killing the creative spark and culture that made that acquisition important, to begin with. Does anyone know of a company that succeeds with acquisitions without smothering the culture that they purchase?  

ROLM and the pool metaphor that wasn't a metaphor

IBM acquired ROLM in the mid-80s. ROLM was a market leader at that time and one of the companies that prided itself as a Great Place to Work (GPW). ROLM created a place with a completely different culture from that of IBM. 

There was a story that IBM showed up to the first all-hands meeting with the employees and said 

We are not here to drain the swimming pool.

IBM then went on to do everything they could to make ROLM conform essentially draining the pool that didn't fit their model. IBM moved its people into ROLM bringing IBM's culture to ROLM rather than protecting ROLM's successful culture. IBM-owned ROLM lost its market leadership and went through the typical partial ownership, sell-off, rebranding, spin-off, and shutdown. You can read someone's take on the culture clash https://narayansmusings.wordpress.com/2014/03/31/down-memory-lane-rolm-corporation/


Where it worked

I can only think of a couple examples where it has gone well.  Berkshire tends to purchase companies and leave them alone.  Apple bought NeXT computer.  That brought Steve Jobs with it and he took over the reins at Apple with people he brought from NeXT. Facebook bought Instagram and it didn't die.  Maybe because both companies had compatible "internet tech cultures" 

Where it didn't work

Pretty much every Google purchase.

Capital One bought a small software company that made secure Kubernetes Containers something that Kubernetes was missing at that time.  CapitalOne thought they could enhance the product and then get into the software business selling the containers.  Their banking culture was in no way aligned with a small agile very targeted software company.  They spent years working on the containers.  They had no idea how to license it or how to charge for it.  The secure containers team got sucked into big bank culture and lost the urgency required for a startup.  Eventually, they just closed down the project having never used anything they purchased.

others to be added

Revision History

Created 2022 04


Popular posts from this blog

Understanding your WSL2 RAM and swap - Changing the default 50%-25%

Installing the RNDIS driver on Windows 11 to use USB Raspberry Pi as network attached

DNS for Azure Point to Site (P2S) VPN - getting the internal IPs