IMI: Based on your current work - if you only had 6 words of advice to give a business - what would they be?
EM: Succeed Globally with a Culture Map
IMI: What does this mean?
EM: Today, whether we work with colleagues in Dusseldorf or Dubai, Brasilia or Beijing, New York or New Delhi, we are all part of a global network (real or virtual, physical or electronic) where success requires navigating through wildly different cultural realities. Unless we know how to decode other cultures and avoid easy-to-fall-into cultural traps, we are easy prey to misunderstanding, needless conflict, and ultimate failure.
Yet most managers have little understanding of how local culture impacts global interaction. Even those who are culturally informed, travel extensively, and have lived abroad often have few strategies for dealing with the cross-cultural complexity that affects their team's day-to-day effectiveness.
To help people improve their ability to decode the cultural differences impacting their work and to enhance their effectiveness in dealing with these differences, I have built on the work of many in my field to develop a tool called the Culture Map. It is made up of eight scales representing the management behaviours where cultural gaps are most common.
The eight scales are based on decades of academic research into culture from multiple perspectives. To this foundation I have added my own work, which has been validated by extensive interviews with thousands of executives who have confirmed or corrected my findings. The scales are:
- Communicating: explicit vs. implicit
- Evaluating: direct criticism vs. indirect criticism
- Leading: egalitarian vs. hierarchical
- Deciding: consensual vs. top down
- Trusting: task vs. relationship
- Disagreeing: confrontational vs. avoidance
- Scheduling: linear-time vs. flexible-time
- Persuading: applications-first vs. principles-first
Many organisations struggle with the integration of acquired companies due to uncertainty at three levels. Firstly, formulating and communicating a coherent business strategy pre-supposes an in-depth knowledge of the acquired assets, resources and capabilities.
It takes time, however, for employees to get to know their counterparts, and for trust to develop to a point where meaningful discussions regarding merged objectives and capabilities can take place. So 'hoped for' synergies in Production, Operations, Customer Service, Sales, Marketing, Finance, IT and HR may not accrue as quickly as desired.
Secondly, even within organisations, different entities, divisions and departments operate in specific ways, subject to local management, commercial or regulatory factors. The resulting orgnanisational culture may have developed over some time, and therefore managers and employees may be reluctant to change the way they work overnight. Sales territories offer a particularly thorny subject for merging entities, for example. On the flipside, “quick win” synergies on the supply chain side may be negotiated rapidly in the form of volume purchase agreements with a rationalised supply base.
Finally, the systems that collect, store and disseminate information, the lifeblood of the organisation, are inevitably based on different technologies. Unsurprisingly, however, the one resource that requires instant homogenisation is the information resource, whether that be with respect to products, customers, markets, employees, locations, or overall financial health. For employees in many merged organisations, the first and most obvious manifestation of the new organisation is their newly acquired email address.
Cloud Strategy is helping organisations to assimilate new business activities following a merger in three ways.
1. Managers know that mergers require strong leadership at the strategic level.
Where energy and commitment are required to knit the two organisations into a cohesive whole. The key driver of this cohesion is trust, and trust is only built over time through good communication. Research suggests that post-acquisition integration speed and leadership has a positive impact on the commitment decisions of employees to stay with acquired firms during the integration process (Schweizer and Patzelt, 2012). Cloud based platforms can offer a “staging area” for interaction with both internal and external stakeholders. Customers will need to be informed quickly of the new commercial arrangements, financial stakeholders will be keen to see their portfolio impact, and employees will want to get to grips with their counterparts by understanding their respective roles and responsibilities. Private cloud solutions can be implemented rapidly to deal with these urgent communication requirements.2. All organisations can benefit by re-looking at customer requirements, and how they are organised to meet those requirements.
Mergers offer the ideal opportunity to reconsider basic concepts such as the customer value proposition, the revenue model, the cost model, and relationships with key partners. Innovative thinking will be prompted by freeing employees up from the constraints of legacy processes and applications. Once again, the rapid deployment and reversibility of cloud based platforms encourages such creativity. If the “sum is going to be more than the parts”, then all actors involved need to be able to rapidly envisage and communicate what that “sum” is, and cloud prototyping can reduce this timescale to a matter of days and weeks, rather than months and years.3. Finally, and perhaps most visibly, organisational integration is achieved by integration at the level of data structures.
Such that newly acquired colleagues can identify, communicate and share resources with each other. At a more advanced level, this involves rolling out common platforms across all the functions of the enterprise. The cloud provides a flexible infrastructure (and ultimately, a target development platform) for such legacy integration projects.By swiftly addressing these 3 questions (joined up strategy, business model innovation and data level integration), and taking the time to plan and pro-actively implement the organisational change that accompanies a merger, organisations can achieve faster integration of acquisitions, reduce stakeholder uncertainty, and improve the retention of key resources.
Dr. Fergal Carton specialises in Management Information Systems and Managerial Accounting Systems. Fergal worked as a management consultant for 15 years, starting with the Boston Consulting Group in London. He has been on programme committees for various European conferences (ECIME, CONFENIS, ECIS) and spearheads the FSIC research activity in mobile payment ecosystems. Fergal is Programme Director for the IMI Diploma in Cloud Strategy. [post_title] => Mergers and acquisitions: Cloud Strategy to the rescue! [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => mergers-acquisitions-cloud-strategy-rescue [to_ping] => [pinged] => [post_modified] => 2020-05-11 20:29:59 [post_modified_gmt] => 2020-05-11 20:29:59 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.imi.ie/?p=12742 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 24474 [post_author] => 132 [post_date] => 2018-11-19 16:26:02 [post_date_gmt] => 2018-11-19 16:26:02 [post_content] => [post_title] => Nathan Furr: Innovative Capital [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nathan-furr-innovative-capital [to_ping] => [pinged] => [post_modified] => 2020-05-09 12:35:58 [post_modified_gmt] => 2020-05-09 12:35:58 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.imi.ie/?p=24474 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) )
Billy Byrne
Billy Byrne is an IMI associate on the High Impact Leadership programme.
Related Articles
Iceberg Ahead! How Organisational Culture Can Sink Your Next Merger
If you’ve previously read any articles on the topic of organisational culture, you’ve probably noticed that many include references to icebergs. The metaphor of culture as an iceberg is actually a very good one.
We see only the visible artifacts of organisational culture, the tip of the iceberg, while the underlying assumptions, values and beliefs remain hidden from view, below the waterline. And yet, these hidden values and beliefs shape the way the organisation works on a daily basis.
As occupants of the organisational iceberg we rarely consider what’s keeping us afloat. There is an enormous amount that is unseen, but which is responsible for much of what happens around us. Culture shapes “how we do things around here”.
But beware! The iceberg metaphor also acknowledges that culture can be a hazard.
The Reinforcing Cycle of Culture
Culture is shaped by, and in turn shapes, organisational behaviour. In this regard it is self-reinforcing, and therefore it can be stubbornly stable and difficult to change. If the existing culture is enabling the organisation to achieve great results, then this stability can be a real asset.
However, when two stable cultures meet as part of a merger, underlying assumptions and values come to the surface and can literally sink the new organisation.
How to Sink a Successful Merger
Cultural stability creates challenges once the culture needs to change and adapt. This is a contributing factor in why mergers and acquisitions often run into difficulty. Attempting to merge two different organisational cultures can create enormous tensions.
Organisational members are torn between their attachment to the old culture and the attractiveness, or otherwise, of the new culture. Rarely is the result of a merger the emergence of a composite culture that represents the best combination of the two existing, pre-merger, cultures.
There are two key variables we should consider when two organisational cultures meet. The first is how willing are organisational members to leave their existing organisational culture behind? The second is how attractive to organisation members is the other organisation’s culture?
These two variables provide us with four potential outcomes:
- Assimilation: The new culture can be willingly embraced if the new culture is more attractive than the existing one. For example, organisation members see the opportunity to be part of an organisation that is a technology leader and may be disillusioned with the existing organisation’s failure to innovate.
. - Integration: When organisational members find the new culture attractive, while still valuing elements of the old culture, they strive to establish a culture that is a combination of elements of both cultures. The effectiveness of integration can vary across a broad spectrum, from the “best of both worlds” to the “lowest common denominator”.
. - Separation: There is a real challenge people are wedded to their existing culture and don’t see anything attractive about the new culture. The result can be that the two cultures continue to exist in isolation from each other. This may be sustainable in the short-term but can mean that the expected synergies from the merger are never realised. At an individual level, some individuals will leave the organisation in preference to embracing the new culture.
. - Deculturation: This occurs when organisation members are unhappy in the old culture but feel they don’t fit into the new culture either. They feel that culture change is being forced upon them. This leads to frustration and alienation with the result likely to be a highly dysfunctional business.
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The outcomes described above serve to highlight how organisational culture has a large part to play in any merger or acquisition. Culture changer is difficult and needs considerable effort if it is to be successful.
So, when faced with the iceberg that is culture, it’s important to proceed with caution.
Billy Byrne is an IMI associate on the High Impact Leadership programme.
He is an executive coach, leadership development specialist and an associate at KinchLyons, Organisational Psychologists. Billy holds masters degrees in organisational behaviour and coaching. He is a chartered fellow of CIPD and Council Member of EMCC. To date he has completed sixteen marathons.
