Blue suits mix with meditation

Merger means bridging a generation gap as well as a cultural divide

YOU do not often hear merger and acquisition specialists talking culture when it comes to business. That is for later - at the Met or on weekends in the Hamptons. But last week was an exception. If they had one worry about the proposed ingestion of Lotus by IBM, it was about the two companies' starkly different personalities. Could they really be meshed together?

For decades, IBM was synonymous with starchy formality. The "Big Blue" tag attached to IBM was born of its obsession with that single colour. The logo was blue and its products - in the beginning huge mainframe computers as large as your living room - were painted in exactly the same hue.

Anyone who worked in the company was for years expected to wear suits, preferably a staid tone of blue, with white shirts and ties. For women, skirts were the rule.

True, since taking over two years ago, Louis Gerstner has moved to exorcise some of the stuffiness. He actually encouraged employees to dress down at work. Plans have also been laid to move the company out of its expansive, rather overwhelming, headquarters at Armonk, New York. But IBM is still associated in most minds with formality and a lumbering bureaucracy.

Lotus is part of the younger generation in the computer industry and has a decidedly different personality. Like Micro- soft, Apple or Oracle, the company has stood for youthful innovation and creativity.

Mitch Kapor, who founded Lotus in 1982, was a former disc jockey and devotee of transcendental meditation, who contributed profits to causes such as Nelson Mandela's African National Congress. As a boss, he offered unusually generous leave policies as well as benefits for spouses in homosexual relationships.

Jim Manzi, who took over from Kapor in 1986, has maintained the spirit. At a company party three years ago, he made an appearance in drag. It is hard to imagine Mr Gerstner going the same lengths to entertain the IBM workforce.

It is no surprise that Mr Gerstner has insisted to Lotus that it will be allowed to stay at its base in brainy Cambridge, Massachussetts, in the shadow of Harvard, and work as an independent unit of IBM. He understands the rule that hitherto seemed to make hostile takeovers in this industry an impossible notion: the only value of such companies are the brains within it. Antagonise those brains to the extent that they flee, and you are buying an empty shell.

In spite of its leaden reputation, IBM so far seems to have staved off that eventuality at Lotus. Morale at Lotus has been sliding in recent months, along with company profits. Although asked by Mr Manzi to keep mum about the proposed takeover, employees who have talked seem generally to be excited about the prospect.

Workers who might have been tempted to desert may actually see their prospects brightened by Mr Gerstner's intervention.

Particularly vital is the attitude of one Raymond Ozzie, the principal brain behind the Notes system. Lose him and IBM would lose the genius it is hoping to tap. It is no surprise that colleagues have taken to referring to Mr Ozzie as the "three-billion dollar man".

Mr Ozzie has indicated that he is willing to stay with Lotus, so long as the IBM takeover can be achieved amicably. He sees in IBM the cash he will need to realise the full potential of the system that he designed - cash that Lotus does not have.

"IBM is a tremendous company," he told the Wall Street Journal last week. "They have a lot of interesting technologies and resources that could be brought to bear at scale that has never been available to Lotus before."

So far so good, Mr Gerstner. But if you are planning to visit the folks of Lotus in Cambridge, just remember to loosen that tie.