Two Companies, Two Governance Models
Two logistics firms merged eight months ago. Company A was project-driven with a 12-person PMO, stage-gate delivery and a business case for everything above €50k. Company B grew through product teams, has no PMO, and approves anything below €250k at team level. The combined group now has 210 initiatives, two portfolio committees that meet separately, duplicate CRM and warehouse-automation projects, and capital spend running 18% over plan. The CEO has asked you to deliver a single governance model within five months. Culture is the visible problem: Company B's leaders describe Company A's process as bureaucracy and have twice declined to attend A's portfolio committee; A's PMO describes B as uncontrolled. Headcount synergies depend on the integration delivering this year.
1. Diagnose the situation using organisational competence thinking. Which organisational competences are misaligned, and what does each misalignment actually cause?
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The visible symptoms - 210 initiatives, 18% overrun, duplicated projects - are outputs. The organisational competences behind them are what you can actually change.
Governance. Two committees with different decision rights means no single portfolio exists. 210 initiatives is not a discipline problem; it is arithmetic - nothing in the system says no. The overrun follows from capacity being committed twice to CRM and warehouse automation.
Management systems. The €50k and €250k thresholds are not 'different cultures', they are incompatible control systems. An initiative's approval route currently depends on which legacy company raised it, which is indefensible to an auditor and to the CEO.
Organisational structures. B's product teams have no seat at A's committee and no route to portfolio decisions, so declining to attend is rational self-protection, not sulking. Meanwhile A's PMO has assurance duties with no authority over B's spend.
Organisational culture. A equates control with predictability; B equates autonomy with speed. Each reads the other's behaviour as evidence of incompetence. This is the misalignment most likely to sink the design, because it determines whether the new model is used or worked around.
A missing competence worth naming: organisational learning. Eight months in, there has been no joint post-decision review, so both sides are still arguing from reputation rather than evidence.
2. Sequence a five-month design. What would you standardise, what would you deliberately leave alone, and why?
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Principle: standardise decisions, not delivery methods. A single portfolio can only exist if everyone uses the same decision rules; it does not require everyone to run work the same way.
Month 1 - one inventory, one forum. Merge the 210 initiatives into a single list with owner, spend, benefit, and stage. Do not stop anything yet. Constitute one portfolio committee with a defined decision right: approve, defer, or stop above a single threshold. Invite B to co-chair the first three sessions - co-chairing removes the status loss that pure attendance implies.
Month 2 - decide the rules, in public. One approval threshold, one business-case template scaled by size (a two-page case for €50k–250k, a full case above). Publish the decision-rights matrix so B's product teams can see exactly what they still decide alone. Run a joint prioritisation workshop on the top 30 initiatives, not all 210 - this is where duplication gets removed and where B's leaders experience the model as useful.
Month 3 - consolidate. Merge the two committees, close the duplicate CRM and automation projects with a documented stop decision, and redirect the released spend.
Month 4 - pilot. Two joint initiatives, one from each heritage, run under the new rules with explicit success criteria for the governance, not just the delivery.
Month 5 - codify and hand over. A short governance handbook, plus a review cadence.
Left alone deliberately: B's sprint cadence, A's stage-gate reviews for capital projects, and team-level tooling. Fighting these buys nothing and costs the goodwill needed for the threshold change.
3. B's leaders remain resistant. How do you handle the political and cultural dimension without simply escalating to the CEO?
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Escalating early would win the model and lose the merger: B's leaders would comply formally and route around it, which is exactly the failure mode a governance model cannot survive. Work the interests instead.
Identify what B actually fears. Probably: slower approvals, loss of autonomy, and A's PMO judging their work. Each has a cheap remedy that costs A nothing. A fast-track for low-value work under a raised threshold protects speed. A defined 'no business case under €X' protects autonomy. Independent review rather than A's PMO reviewing B protects status.
Give B something to own. Co-chairing the portfolio committee, or leading the joint prioritisation workshop, converts them from subjects of the design into authors. Resistance by a co-author is much harder to sustain publicly.
Use evidence, not process arguments. The duplicate CRM and warehouse-automation projects are the strongest available case, because duplication is a shared loss, not an A-versus-B issue. Quantify the duplicate spend and present it jointly with a B counterpart.
Address the A side too. A's PMO will need to give up the assurance monopoly; if it does not, B's suspicion is confirmed. A visible concession from A buys more than any amount of persuasion aimed at B.
Keep a threshold for escalation. If B declines the single committee after co-design, that is a decision to opt out of group governance, and it belongs with the CEO - but framed around the CEO's own integration commitment, not around B's attitude.