Posts Tagged values

435 — Smoother Mergers and Acquisitions — Participation Brings Higher Success Rates

Six out of ten acquisitions fail to meet their financial goals. Usually the operational and financial plans are realistic, but they don’t meet expectations because people and cultural issues prevent proper company integration.

Manage Uncertainty

When properly managed, a good merger process will strengthen both cultures, retaining key people and yielding the hoped for synergy that sadly eludes most acquisitions. Culture conflict is particularly acute when the two cultures are quite different, for example in size, centralization, openness, and formality. Even though details of what will happen cannot be known in advance, the process for merging the cultures and managing uncertainty can be clear.

The merger process will be unique to every merger but typically includes: scheduling regular update meetings, a dedicated process for posting and answering questions, and a way to include people who want to be involved in decisions. Post this decision process and invite comments for improvements. Participation is the key to success.

Communicate, Inform, Involve

Frequent and open communication reduces water-cooler talk — that is often misinformed and reinforces fears. Explain simply and clearly the acquisition’s purpose and goals. Make sure that people can personally identify with the combined company’s vision and mission.

Whether in reality, or in people’s imagination, acquisitions affect everyone. Involving those affected in the acquisition decision process — without slowing or complicating it — takes some skill, but is not as difficult as it might first seem. People want to know how they will fit into the new structure. Too often the merger team rushes to define the new structure, rather than involving employees in setting the new structure and direction, particularly how each person will fit into the new structure, his and her role and tasks. Involvement ensures a stronger plan with everyone committed to their new roles and to making the merger work. Ideally you have one person (or more) on the acquisition team who is focused on culture issues. This person, not consumed by the financial, legal, and logistical problems, provides feedback on the people side to the technical experts.

Example — The Acquired is Participatory

Managing any complex company is filled with uncertainty. This problem is magnified for managers facing a newly acquired company, of which they know practically nothing. Ideally they get help from the place of most knowledge — from the managers in the acquired company. Here is an example.

I was working with the Northern California division of Fortune (name changed) when it was acquired by a competitor, Allied (name changed). Anticipating what would happen if they did not act, I urged the Fortune managers to take control of the merger process before the Allied team came on-site. The Fortune management team was very apprehensive, “What could we do? Do we have the authority to do anything? What if we do something and they change it? Who should we ask for permission? etc., etc.”

The Acquired Managers Take Control of the Process

The Fortune team was a sophisticated leadership group that over three years had built open communications and strong relationships at all levels of their Division. Their early discussions of the merger, often about operational details, evolved into a realization that they could best serve the merger process by acting as facilitators between the two companies. So they planned a series of meetings and invited the leadership from both companies to meet, identify issues, and make decisions. They also decided to present the same open and inviting stance they had learned, not the defensive or protective one they had left behind, that still characterized other Fortune divisions, and also the acquiring company.

When the Buyer is Autocratic

They knew Allied had a centralized leadership style, concentrated in their mid-west headquarters. Allied middle management was used to taking orders and giving orders. They did not use, nor understand, participatory decision-making. The incoming Allied management team accepted the Fortune manager’s invitation to meet, but at the initial meeting I could tell, from the Allied manager’s words and faces, that they found the experience confusing. Understandably they had expected to meet people like themselves, managers who acted defensively, withholding information, jockeying for position, and highly deferential to superior authority. Instead they met a deliberately relaxed, friendly, open, candid, and non-deferential management team.

I was concerned by this, because I know that authoritarians usually interpret open behavior as weak. It tempts them to go for the jugular. Indeed a few of the younger managers from Allied were provoked by what they thought was vulnerability in the Fortune managers, and became openly hostile and aggressive. It was almost embarrassing to see these young managers strutting their stuff. But the Fortune managers knew better than to react to this. While they were concerned about the hostility, they controlled their impulses and maintained the open dialog, which, over several meetings persuaded most, though not all, of the Allied team to act similarly.

After several meetings I felt that the Allied vice president recognize the maturity of the Fortune managers, the sophistication of the process they had initiated, and the major benefits it was bringing to the merger.  But he had another problem. Above him was Allied’s top management that tolerated no challenge to their decrees. He rightly saw the dialogue of the joint meetings as a potential problem if it moved in a direction that conflicted with directives from his bosses, or with his own plans.

These joint planning meetings, conducted over several months, had many rough spots but when the dust settled the Allied vice president said that the Northern California Division merger process had been the smoothest and most successful of the many Divisions under his authority.

Example — The Acquirer is Participatory

A Texas chemical plant “A” was under threat of closure. We worked with the managers helping them build a participatory workplace that dramatically improved productivity while rebuilding the self-confidence of the A management team. When an adjoining chemical plant B declared bankruptcy the A managers propose to corporate that they acquire and merge the two plants. Though surprised by this local initiative, corporate agreed.

A was a vast international Corporation with sophisticated, detailed procedures. B was a standalone plant largely operating from the seat of its pants. Managers at A planned to bring order and stability to B. Managers at B feared stifling and suffocation from the order and procedures of A. While the A managers held most of the cards they did not know the plant B equipment and they wanted to retain if possible the experienced plant B employees and managers. What followed was a merry dance that lasted many, sometimes excruciating, months.

When the Acquired is Autocratic

Just as in the previous example the autocratic managers from plant B interpreted the openness of plant A managers as weakness. Plant B managers quickly became aggressive, thinking they could gain the upper hand. Plant B managers were confused when plant A managers did not fight back or fold but simply held their ground, restating their position, mostly about bringing more order and predictability to plant operating procedures and how the plants would be physically joined.

The confusion reached a head when the general manager of plant B resigned. He failed to see how plant could be run without his familiar top-down control style. His view of the participatory decision process was that he was being stripped of authority, that is, he was being asked to resign. When the plant A management team refused to accept his resignation he was totally confused. From his experience how could he run a plant if he didn’t have complete authority.

He wasn’t alone. Most of the original managers and supervisors could not understand participation. To help them learn, the plant A management team assigned some of their lower-level managers and supervises to act as “buddies”, working side-by-side with their counterparts at plant B. As these buddies develop stronger interpersonal relationships most of the plant B employees began to see that they were not being rolled over but were being welcomed. But it took a painfully long time for this to happen.

I was most impressed at the fortitude of the plant A managers in tolerating the kind of disruptive, sometimes childlike, acting-out behavior from plant B. I put it down to the sophisticated maturity of the plant A team that they kept the long-term goal clear — “Use the merger process to demonstrate the values that renewed our plant and made it so successful.” The A management team demonstrated participation, trust, openness, teamwork, tolerance, compassion and true leadership.

Though physically the merger of these two plants was extraordinarily complicated, merging the people side was more so. In the long run both cultures merged beautifully, almost doubling plant capacity at a very low cost. Corporate was delighted.

cc 435 — © Barry Phegan, Ph.D.

Posted in: Topics and Issues — Operations

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328 — Promotions and Transfers

Use this process to pick the best candidate, satisfy everyone involved, and develop the culture. This is a variation of the process described in 327.

Imagine that you are filling a vacant position by making either a lateral transfer or a promotion. You have advertised the vacancy throughout your organization, and have eight internal candidates. How can you choose the best candidate in the best way? Try this well tested process. It:

•  Guarantees a good decision, i.e. a highly qualified candidate.
•  Gives all the applicants feedback on their strengths and weaknesses.
•  Clarifies to everybody what is required to do the job.
•  Leaves all the applicants satisfied with the process, whether or not they were selected.
•  Develops the company culture, by demonstrating good values.
•  Ensures the person selected will be supported, i.e. it builds success into the position.

Begin by Announcing The Selection Process

Tell the candidates that you want them to be involved in the selection process. Schedule a meeting with the eight candidates and the people who would traditionally make the selection, e.g. the Superintendents, Department Manager, and HR manager. At the start of the meeting, describe the selection process, e.g. “We will ask you to develop the selection criteria for the job. Then we will ask you to secretly rank yourselves, and any of the other candidates that you know well, against your criteria. Then we will look at the results and decide what the next step should be.”

Agree On The Selection Criteria

First ask the candidates. Using a flip chart or whiteboard, go around the group and ask the candidates to brainstorm selection criteria, “What should be considered when judging applicants for the position. What qualities should the successful candidate have?” Allow one criteria from each person. Write down just what the person says. Number each item and do not allow discussion. Go around and around the group, until everyone is finished. (You will probably have between ten and twenty items.)

Now ask the managers, “Are there any criteria you would like to add? Any significantly different criteria that aren’t on the chart?” If they have any, add them to the list.

Ask the applicants to group similar items. Do this by starting with the first item and saying, “Are there any other items similar to this one?” Mark similar items with a color, symbol, or letter. Go to the next unmarked item and repeat the process. This step will generate discussion, and build a common understanding of the criteria. The list will now be reduced to between five and twelve criteria. Ask the group to give a descriptive word, or name, for each group of criteria. This will probably mean highlighting one or two words that are already in each criteria group.

Rank Order The Criteria

Now ask the applicants to rank order the grouped criteria. You might begin this by writing the new grouped criteria “titles” on a fresh sheet. “Which of these is the most important?” Allow discussion. It will help build consensus. Rewrite the criteria in the new rank order.

“Now we you have the criteria rank ordered let’s give each a percentage that will total 100%. What percentage, goes to the first? . . . . . and the second?” The total should be 100%. Again, allow discussion. You want consensus.
Now ask the managers, “Any comments on this list? Does it look OK to you? Can you go along with this as the basis for the selection?”

Prepare a Criteria/Candidates Matrix

Take a piece of notepaper. Write the ranked criteria in a wide column down the left side. Draw a horizontal line across the page separating each criterion. Draw narrow vertical columns to the right of the criteria, one for each candidate. Put candidates initials at the top of each narrow column. Write “Criteria” at the top of the wide criteria column. You now have a grid, or matrix, with criteria as rows, and candidates as columns. If any of the criteria have factual or answers, e.g.”EE Degree”, or “Years on the job.” ask each candidate to say what is the correct answer or number for their name. Now make a copy of this page for everyone in the room.

Rank Order The Candidates

Hand a copy to everyone in the room and say, “For the people you know well, rank order them, 1 high through 8 lowest, by how you see them on each of the criteria. Take your time. We will tally the results. This is a secret ranking. Your individual rankings will not be discussed. The tally will not necessarily be a decision. After we tally the results, we will all decide the next step.”

Make a separate tally for the applicants, and for the “management” group. Because people may not know everyone well enough to have ranked them on every item, you will have to decide how to fairly tally the results. This may take several minutes.

Take the two scores and draw each on the easel pad so everyone can see. Say, “Look at the results and see what you make of them. Take your time.” . . . “When you are ready I would like to hear from each of the applicants and after that, from each manager. Then we will have a general discussion.”

The Group Agrees On The Final Action

Perhaps one or two candidates are obvious leaders, or something else appears. Wherever the group seems to be headed, encourage them to discuss where to go with the results. There may be an obvious decision, they may wish to pass the results to managers to decide, or something else may emerge. You are seeking a consensus from everyone on an appropriate next step. This is somewhat like step four of the Four Step Decision Process.

Do a “Plus/Delta” on the meeting. Thank everyone for participating.

Getting the Customer Involved

If the customer for your team’s work is another person or another department you can ask their opinion on selection criteria. For example, in manufacturing the customer for Maintenance is Operations. At one Texas chemical plant the maintenance manager decided to ask the operators for their opinion on what was important in a maintenance supervisor. To the maintenance manager’s surprise the operators did not rank technical maintenance skills highly at all. What the operators valued was a person who could quickly bring together the right people to solve the problem. When the maintenance manager used this new criterion it caused the selection and promotion of the first female mechanic to supervisor. She was a great success in what until then had been an all male supervisor group.

cc 328 — © Barry Phegan, Ph.D.

Posted in: Company Culture Leadership -- Specific Tools

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418 — Building Independence by Self-Shrinking a Large Group to a Working Team

The workplace is filled with opportunities to tap into the spirit of Independence, a powerful value that runs deep in every individual and throughout our nation. Engaging this spirit is highly motivating, as the following story shows.

I grew up in Australia, not knowing the meaning of the Fourth of July. Recently I moved to the small town of Larkspur just north of San Francisco where I regularly enjoyed our hometown Independence Day parade — a delightful expression of grass-roots America. John Adams and Thomas Jefferson died just hours apart on July 4th, 1826, the 50th anniversary of the signing of the Declaration of Independence. The Declaration, a major life achievement for Adams and Jefferson, capped the long effort of the colony to break free from the oppressive, often authoritarian control of England.

History is filled with stories of oppressed people struggling for their independence. Modern corporations can tap into that same spirit we each share — to be independent adults, free-thinking, responsible, valued and creative.

An Opportunity for Employee Independence

In a California unionized facility of a national company, I worked with the managers to establish employee problem-solving teams. One particular issue — Forced Work at Weekends — was contentious and divisive. Some employees liked the overtime pay. Many hated the disruptions to their family life. Management invited volunteers to form an employee group to study the issue and develop alternatives.

Twenty-four people volunteered. Management decided to select twelve people as a workable group. I suggested they facilitate a problem-solving meeting with the volunteers with the subject, “Reduce the 24 volunteers to a working group of 12 people.” The management team was skeptical that the first-line employees could successfully reduce their group’s size. However they had already accepted the logic of the cultural Golden Rule: “If people are affected by a decision, they should be involved in it.” Because it was my suggestion, and because the meeting was potentially difficult, they asked me to facilitate the discussion.

Creating an Effective, Self-Determined Work Group, or “Look, We Shrank Ourselves!”

All 24 volunteers came and I outlined a process they could use to cut their numbers. “First, you decide on your selection criteria. Then you vote and rank order everyone against the criteria. You take the top 12 and see if they are OK. The results are in your hands.”

Everyone agreed and I could tell they were very excited by the sense of control they would have over this decision. The criteria they listed were fairly straightforward. The final group should represent:

    • Each department.
    • Different age groups.
    • People who want to work weekends and people who don’t.
    • People who are angry and outspoken and people who will speak up for others.

I passed out copies of a sheet of paper with everyone’s name on it and asked them to keep their selection criteria in mind while privately ranking their top 12 candidates. This took 10 minutes or so. I tallied the results and made a copy for each person. I asked them to look at their selection of top 12 vote getters and compare them against their selection criteria, “If we go with those top 12, do they represent the areas you said should be represented?” The response was a resounding “Absolutely!”

Everyone left the meeting surprised, impressed, proud, and pleased with what they had accomplished. Those who did not make the cut may have been disappointed, but because they were part of the decision, they were very satisfied with the result.

Management was more than pleased

The management team’s response to the 12 names was; “That is an exceptionally good group. We couldn’t have done better ourselves. If we had done the selection, there would have been a lot of opposition to our decision, particularly from those not chosen. I think we’ll use this process again.”

cc 418 — © Barry Phegan, Ph.D.

Posted in: Topics and Issues — People

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121 — The Structure of Culture, The Five Levels

 

You don’t need to know the structure of your brain or personality to change your attitude and behavior. Similarly you don’t need to know the structure of you company culture in order to change it. However for those managers who’d like to know the basic structure of culture, here are the five distinct parts or levels. In a well developed work culture, these parts are balanced. The first three you can analyze, the last two you can’t. See also Balance The Two Halves of Culture.

1. Physical Objects — equipment

bridge 039This is the first level of any culture. It includes tools and objects people use to build and make, the clothes they wear, the structures they live and work in, the products they trade or sell, and the art they create and cherish. This is the level of physics and chemistry, equipment, hardware, engineering, and technology. (more…)

Posted in: About Company Culture — Structure

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133 — Splitting Thoughts and Actions Cuts Profits

For many employees, what goes on in their head is not what they show through their words and actions. This split between thought and behavior is stressful and unproductive, a waste of company resources — bad for people and bad for business.

One of the many threads that led to my interest in culture was the book Something Happened by Joseph L. Heller of Catch 22 fame. In his book, Heller chronicles the inner life of Bob Slocum, a corporate middleman acutely conscious of company politics and power.

Like your average corporate employee, Bob Slocum struggles with what to say and what not to say in a meeting. He tries to interpret comments and glances in a hallway. He is uncertain about where he stands in the eyes of those above him. He does not say what he thinks. The contrast between his thoughts and actions, his feeling and words is jarring. What is real and unreal, true or false, rapidly blurs.

This describes my own experiences in my 20s, first as an employee, and later as a supervisor and manager in several companies. Later I thought, “If Slocum experiences corporate life like I do, perhaps others do also. Why don’t we talk about this at work?”

Dividing Thought and Action

We each adopt to the world of work. If we don’t we are ejected. I learned, as most of us do, that at work we discuss the abstractions, the ‘quantitative’ details of production — the numbers. In business meetings we rarely discuss the hard data of our immediate concrete experiences of work. We do not put these personal facts on the table. We sit in meetings thinking constantly, saying little. If we do talk about our feelings, it is at lunch, at the water cooler, in the restroom, after the meeting, or to our spouse in the evening, or to our friends at social gatherings.

Joining Thought and Action

Companies with well-developed cultures build relationships and trust that allow people to say what they are thinking, to be what they long to be, to hold together thought and action, to bring more of themselves to work. These companies are highly energetic and creative, a pleasure to work in, very productive, and exceptionally profitable.

cc 133 — © Barry Phegan, Ph.D.

 

Posted in: About Company Culture — Person and Behavior

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