The ‘culture from hell’ is often birthed by the inappropriate coupling (Merger, Acquisition or shotgun wedding) of two antecedent cultures, who haven’t really spent sufficient time dating to notice that they are actually incompatible.
An M&A between two companies is often driven either by the surface attraction of quick riches or the fear of being left on the shelf. Without due cultural diligence by the Senior Leadership Teams on both sides, this leads to a forced marriage. The progeny is a dysfunctional and uncared-for corporate climate.
The recent failure of Unilever and Kraft Heinz to get hitched is a relief for everyone. If the marriage had happened it’d have been one of those where the guests would be murmuring "I give it a year". Unilever, full of flair, innovation and commitment to purposeful business; Kraft Heinz steadfastly pursuing efficiency, practicality and rigorous focus on quality. Vive le difference, but the honeymoon would have been short.
Many mismatched M&A’s do not have the prescience (or was it luck) of Unilever and Kraft, and they fail to cancel the wedding in time. They waltz up the aisle oblivious to the warning signs, believing that if they only commit to the sacred vows of M&A they will be blessed. The culture, that is the offspring of this hurried union, grows up with conflicted value sets, lacks productive alignment, and little sense of identity or engagement.
Don’t get me wrong, I am not against shaking up the status quo, stirring the melting pot, or blending diverse backgrounds. I am an advocate of it, but it needs to be done consciously and by organic design. The infant culture needs to be parented as carefully as any new born. If it isn’t nurtured, research and experience shows, it will grow up insecure, poor at communicating, listless, and under achieving.
We are already seeing an increase in M&A driven by the effect of massive technological change.
One of our clients, an old established software organisation has courted and acquired an exciting and passionate young company in its market. These two face the challenges of integration while maintaining the gravitas of one and the vitality of the other.
They have asked Maynard Leigh to help with the new partnering and fostering of a healthy culture. We are helping them do this by:
1. Ensuring they produce and promote a compelling and cohesive vision of the future
2. Bringing a robust focus to ‘doing things right’
3. Spending time investing in building the trust, relationships and alignment.
Many years ago I worked in a culture from hell. The department was the result of an acquisition. The leadership had failed to provide a clear sense of direction – just a list of tasks, without input or outcomes. We were wage slaves, feeling purposeless. There was no career projection, and therefore no meaningful learning opportunities, and no appropriate investment in relationships; trust was eroded resulting in no openness, and even less fun. The dark shadows of this culture, which no customer was ever allowed to see, were rarely illuminated by the light of acknowledgement or recognition.
In his book 'The Culture Cycle', James Haskett estimates that an effective culture can account for upwards of 30% of the differential in corporate performance compared to less culturally vibrant competitors. However, knowing that culture makes a difference is a long way from being able to foster a healthy one.
What’s needed in companies is an approach recognizing that sustained cultural change demands more than compliance. It requires wholehearted engagement, from top to bottom, which goes deeper than commitment. It involves both values and meaning.
Leaders are happy to proclaim to the waiting troops that "our commitment is to be one company, blah blah; all pulling in the same direction blah blah". However, they have little real idea of how to promote and construct the alignment vital to the success, or to help people share, emotionally connect to, and embody a cohesive set of values.
Our clients will often describe the new forms of behaviour they want to see: "people being more proactive" "less silo mentality", "a readiness to speak out", "more creativity and innovation" and so on. Individual behaviour lies at the heart of cultural change, and that needs a framework every bit as robust as the strategic thinking.
Senior Leadership Teams generally seem more comfortable with the strategy than with the mechanics of behaviour change, and of actually getting people acting differently.
It's akin to the optimism of a parent at the start of a four hour trip with a car full of kids - proclaiming that we are going to have a peaceful journey with no fighting, arguing or tears. And then the reality of the road trip from hell begins. The strategy is useless without the skills to implement a productive culture.
1. Using a wide range of stakeholders to identify the driving forces behind any change process
Given the challenge of sustaining any cultural shift, there needs to be an absolutely compelling reason to attempt it.
Culture change efforts are generally more successful when there is a clear link between culture and business strategy. In practical terms, we look for something so irresistible that almost everyone in the company recognises that change has become unavoidable.
2. Prepare leaders to be able to win people’s hearts and minds
Persistent cultural change relies heavily on whether senior management plays its part in identifying, articulating, promoting and supporting the changes. Whether it’s a CEO, a head-teacher or a supervisor on the shop floor, leaders often shape the culture of the team, department and organisation. Their approach and behaviour are crucial in determining the success of any change. As with any leadership, they need to add value, demonstrate authenticity and have an impact.
3. Discover the ‘What’s in it for me’ reasons for people to get on board
People like change, while rather disliking the prospect of being personally changed. So they need a powerful reason to alter behaviour, whether a push due to pain, or a pull from something attractive, such as the chance for promotion or personal recognition. People need a personally compelling reason to change and the belief that’s it's all worth it.
4. Create a sustained internal campaign to keep spreading the word through sharing examples of changes that have been successful
Whether the required shift starts to happen and then persists depends critically on the ability of leaders, champions, and those promoting cultural change to communicate and present their vision of the new way of working
5. Identify potential active supporters of the cultural shifts needed – seek those with key networks
Any persistent culture shift relies initially on the activity of internal champions. They usually form a select group, yet have a disproportionate influence on the wider organisation. Engage them to actively promote the change and the benefits associated with it.
6. Create opportunities for line managers to ‘rehearse’ the vital behaviours that need to be modelled for the change to work
People need to be able to experiment with new behaviours and be allowed to fail without recrimination. This can prove a major challenge for companies burdened with a critical or punishing culture.
Consultants from Maynard Leigh Associates worked closely with both the HR director and the CEO of Carlsberg to shift the culture toward that of a learning organisation, with a special emphasis on coaching. This was based around a 360° feedback process that was also supported by one-to-one coaching before and after the analysis.
Around 40 senior people from C-T attended a two-day programme exploring in depth the reasons for coaching, and to practice and rehearse the skills required.
Colin Povey, the company's then Chief Executive, explains:
"The energy and creativity produced by the team at Maynard Leigh have really helped us to raise our game. I am convinced that without their support we would not have been able to introduce so effectively the level of coaching skills required in today's business environment."
7. Develop a varied support programme underpinning the desired behaviours
Change at the individual level often involves people acquiring new capabilities, such as increased emotional intelligence, the ability to work in a team, new attitudes to decision making and authority, more attention to quality and generally higher levels of performance. This is where development programmes can really make a difference.
To learn more about creating a culture of wholehearted engagement download our award winning publication 'How to Sustain a Healthy Culture'. Awarded "Outstanding Paper of the Year" by The Editorial Board of Training and Management Development Journal.
About the author:
Stuart Makenzie is the CEO of Maynard Leigh Associates – one of the World’s leading behavioural change and performance impact programme providers. Maynard Leigh designs and delivers outstanding frameworks for organisational change. Stuart, together with the Co-owners, pioneered using psychological insight and techniques from the performing arts in business, since 1989.
Stuart is an executive performance coach with a background in film, theatre and TV, as an actor, director and writer. He has helped thousands of professionals, from graduates to CEOs and Vice Presidents, reach their true potential. Stuart has been instrumental in devising long-term learning & development training solutions for the world’s largest leading organisations such as: Hewlett Packard, Ernst & Young, BP, Credit Suisse, PWC, Carlsberg and The Financial Times.
Maynard Leigh’s Story…
Each coach who works for Maynard Leigh derives from a professional theatre background and undergoes rigorous vetting during the hiring process. This level of talent, knowledge, experience and expertise, guaranteed from their training style, instils trust that the coach knows what they’re talking about. Their knowledge on performance impact and behaviour is second to none, simply because, “it’s in their bones”.
Learn more about Maynard Leigh – About us.
Who has Maynard Leigh worked with and why? – Client Stories.
Maynard Leigh is running the two-day Masterclass - Leadership Impact for leaders who want to learn how they can create a healthy culture, by using inspirational leadership skills, and by engaging their employee's hearts and minds. More details here.
For more information about interpreting company culture, read Harvard Business Review’s Leader’s Guide to Corporate Culture.