Ready. Set. Ego.

There is little in business that is not embossed with the boot marks of ego.  Now I’m just a humble verger, not smart enough to be able to describe the line between ego and courage or ego and decisiveness or even ego and enthusiasm, but I do believe that some level of ego is essential for a business leader.  And I know (we all know) that too much ego poisons.

We’ve all worked on deals where there was a clash of titanic egos.  But I worked on a deal a few years ago where the clash was not between egos of differing sizes but of differing types.  That subtlety went undetected, leading to enormous problems and a huge drain of value from the deal.

This was the case of a wholesale securities brokerage acquiring a company that developed securities-pricing software.  Both were leaders in their markets.  And both had commensurately large egos.  The brokers moved enormous sums of money around each day and thought they were hot shit.  The software designers were the creators of a system through which those enormous amounts of money could move at proper prices.  They thought they were hot shit.

The management of the buyers thought of the software guys as techno-nerds and had no conception that they had egos as big as their own.  Despite knowing well how to stroke the egos of brokers they had no idea how to stroke the egos of software designers (or that software designers needed stroking … or even had egos).

It was a cluster fock.  The large (but fragile) egos of the software guys did not speak up about their gripes.  The large (but blowhard) egos of the broker guys didn’t recognize the underground problem.  One by one the software guys left the brokerage firm and the hoped-for benefits of the deal withered.

Value?  POOF!

Has anyone else seen this kind of similar-but-different scenario trip up their integration process?  I’d love to hear other stories.

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