SIZE BEATS PUNY - FIGURE IT!

I’ve been listening to the arguments all week. It’s become increasingly clear that size matters. That’s why China is now tipped by the Economist to overtake the USA as the world’s biggest economy by the end of this year.

It’s why the Astra Zeneca takeover by Pfizer makes so much sense….. but I’ve got a bit confused by this. Apparently the most significant recent breakthroughs by pharmaceutical companies have actually been achieved by midsized companies.  The fact is too many big mergers have been disasters for us to assume this one will work.

The Huffington Post notes that 70 to 90 percent  of mergers fail . Here are a series that we can all recall - AOL and Time Warner - disaster; EBay and Skype - disaster; Quaker buying Snapple for $3.6 billion and then selling just 27 months later for $300million and worse, Daimler Benz buying Chrysler for $36 billion and then paying Cerberus Capital $650 million to sever the ties a few years later.

My biggest concern is this Pfizer/Astra Zeneca story is about innovation and learning. No wonder that tiny little academic institutions like Oxford, Cambridge and Harvard with student populations of just 22,000, 18,000 and 21,000 respectively are struggling when there are mighty organisations like the Indira Ghandi University (3.5 million and number one in the world); The Payane Noor University, Tehran (800,000 and number 8) and even the lowly Modern University for the Humanities in Moscow at 48th in the league table has 100,000 students.

So innovation and excellence go with size.

I’ll say that again so you can fully appreciate how absurd the equation of scale with excellence is.
Innovation and excellence go with size. Unless you mean “go” in the “disappear, are absent from and destroyed by” sense of the word because the reality is, as we should by now have learned, scale fails. Creativity is killed by size.

John Lewis Christmas 2013 created by a little agency - Adam and Eve

Any of you who are thinking of setting up Goliath Advertising Inc. forget it.  The hot agencies in the UK right now are I’m told Adam and Eve, Weiden Kennedy, Droga5 and Corner. None are big and although Adam and Eve was bought by Omnicom it is still aggressively independent. More start-ups like the Counter are happening whereas Abbott Mead,with as many as 400 staff as the London number one agency, is described by some as a “behemoth”.

This mad merger will probably happen but I doubt, no,  I do more than doubt, I’ll be confounded and astounded if there’s any addition of value, innovation or human  advancement as a result of such folly. Ian Read the Pfizer CEO will get rich plus a few others but breakthroughs, achievements and success - forget it. Big isn’t beautiful it’s just barmy and the mid-sized and small businesses are where the big brains will go. Oh and to Oxford, Cambridge and Harvard too.

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