Leader - When turkeys vote for Christmas
November 1999 will be recorded as the month when skeletons joyously rattled their bones. Of course, Jeffrey Archer’s skeletons were so numerous that his particular cupboard had a spare bedroom built in. But deep within KPMG another skeleton has been doing a little overtime. A few weeks ago, KPMG proudly distributed copies of a research document outlining how a high proportion of cross-border mergers fail to add value. In fact, over 80 percent of customers surveyed believed that there was no shareholder value in such mergers. Of course, this is worrying news for those organisations aiming to make a profit out of such activity, such as … KPMG. So, no sooner had the research been released, than KPMG withdrew it. Officially, KPMG claims that synchronised international release dates were to blame for the debacle – but some KPMG partners were less concerned about release dates and more concerned by the fact that they had not seen the report, which includes a virulent attack on mishandled mergers. So what was KPMG thinking? The rationale for sending out the research must have been to flag up the fact that merger projects supervised by “other consultancies” had failed and that KPMG would have handled them better. But whatever the truth, it is clear that this is a slip-up of the first order, and it will take some time for KPMG to regain credibility. A new version of the report will be distributed after the partners sign it off, and it will be interesting to compare the old and the new. The question is, what exactly can KPMG change? The statistics must remain the same and it will be difficult to put a rosier light on a commentary that surrounds unfavourable data. Dotting the Is and crossing the Ts will do little to smooth things over. However, the real problem is not that KPMG’s communications team has perhaps lost a little of its Christmas bonus. The real problem is that, whichever consultancy they’ve hired, most clients have no trust, no faith and can see no benefit in one of the industry’s biggest money-spinners.