After decades of trying (and failing) to find a partner in Europe, KLM Royal Dutch Airlines eventually decided to create a partnership with Alitalia in 1998. Executives and employees were excited at both companies. The numbers added up; the partnership showed synergies on paper. Integration activities were initiated quickly in 1999. In 2000, however, the alliance was over.
A Perfect Failure
KLM cancelled the partnership. Dutch top management blamed Italian politicians. At other levels, The Dutch pointed at flaws in the Italian culture: a chaotic organization and lack of follow-through. Trust quickly started to fade. The Dutch assumed that the relationship was broken and consequently demolished the entire partnership, leaving the Italians flabbergasted.
In the aftermath, the Dutch were being accused by the Italians of being too methodical, rigid, aggressive and even arrogant. While eventually the Dutch blamed the failure on financial risk due to untrustworthy politicians, my observation was -and still is today- that both sides pointed fingers and did not perceive their differences as a gap that needed to be bridged.
Culture Eats Strategy
While a full assessment would likely show more complexity regarding the KLM-Alitalia break-up, clearly cultural differences played a major role. Building a business case showing synergies is not hard. Especially in international business, the hard part starts with what is often described as the soft part: how to work together. Culture indeed had strategy for breakfast in this case.
The Same Things Differently
Not perceiving, ignoring, or not addressing the gaps that exists between how people in different countries -or between different companies for that matter- conduct business, can have a devastating impact on partnerships. It is crucial to understand that everybody does the same things differently.