Tuesday, December 04, 2007

Does the language used in a merger define the future of a company? From Synergy Drive to Sime Darby

A lot is being said about the success of the merger of Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope Plantations Bhd to become one of the world's leading leading plantation group with a landbase of 543,000 ha that originally was named Synergy Drive.

The merged entity, now renamed Sime Darby, today made a has made a stunning debut on Bursa Malaysia with its shares surging by 25.8 per cent.

Everbody talks positively about the entity, and all seems to be well.

Allow me to look a little bit behind the scenes and analyse the language that has been used and how it might or might not indicate the potential for the company. Not all of what is given below are direct quotes, but I hope that the sources used quoted correctly without using their own words too often.

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First, the company has been renamed to Sime Darby, its old name that was in use before the merger and the name Synergy Drive. The reason given by Chief Executive Officer Datuk Seri Ahmad Zubir Murshid was that a consultant recommended the name Sime Darby after conducting a survey and Datuk believes that "the existing Sime Darby name carried a fair value in terms of market brand." (NST, November 29, 2007).

The Star quoted Datuk as well, saying that "the new Sime Darby, which will re-list tomorrow, strongly reflected the long-standing brand and equity market values as a conglomerate with multiple core businesses locally and internationally." (The Star Malaysia)

He also stresses that "said the company is effectively bringing together more than 400 years of plantation know-how." (Business Times, November 20, 2007). In the same paper, Datuk stated that "Together, we will combine our knowledge to benchmark the best sustainable practices across all our plantations."

He also talks about "balance cycle of the core business", "integration of plantations", "cost efficiency".

There is nothing wrong or right about the language patterns. They show, to me as LAB Profile Trainer used to look behind the language that people use to detect their behaviour, that it is not the language of change, revolution, major initiatives and so on.

This is okay, because too many mergers created chaos and overpromised. As such, caution and a more defensive language is suitable.

However, accepting the fact that language is an expression of what we think and knowing that top management sets the course and culture of an organisation combined with the scope of challenges faced by Sime Darby - e.g.; globalisation, competition, merger integration), I surely hope that the team behind the merger and in the seats of the company is more proactive.

Why is that? This is because the current language used in above examples shows more a conservative style, think and wait approach style, problem oriented and not necessarily a future driven and goal oriented "let's do it" approach.

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