Building Culture in a Merger

July 26, 2014

High-fiveWhen two organizations merge or there is an acquisition, the ability for the two cultures to work well together is paramount. This aspect is most often the stumbling block that prevents the merged unit from being successful.

Managers often assume this will happen naturally over time, so they give this aspect little attention when planning the merger.

WRONG!

Achieving a stable culture where people are at least supportive if not enthusiastically driving a singular mindset is the most significant challenge for most change efforts.

Do not assume things will work out; instead, take a highly proactive approach to defining a new culture.

In every case, even when the action is described as a merger of equals, one group will feel they have been “taken over” by the other.

Curiously, in many instances, both groups feel they have been taken over because employees in each former group need to modify their procedures to accomplish the union.

Usually, one of the parties is assumed to be in the driver’s seat, so it is the other party that needs to endure the bulk of changing systems.

Lack of trust and genuine animosity lead to resistance when it comes to blending the two groups into one. It is common to have the conflict occur as passive resistive behavior.

People will have the appearance of agreeing, but subversively undermine the other group however possible. This kind of “we – they” thinking can go on for years if allowed.

What actions can management take to mitigate the schism and promote unity? Here are a dozen ideas that can help:

1. Start early -

Do not let the inevitable seeds of doubt and suspicion grow in the dark. Work quickly after the merger is announced to have teambuilding activities. Openly promote good team spirit and put some money into developing a mutually supportive culture. Good teamwork is not rocket science, but it does not occur naturally. There must be investments to accomplish unity.

2. Have zero tolerance for silo thinking -

This is hard to accomplish because human beings will polarize if given the opportunity. Set the expectation that people will at least try to get along at all times.

Monitor the wording in notes and conversations carefully and call people out when they put down the other group. This monitoring needs to include body language. Often rolling eyes or other expressions give away underlying mistrust.

3. Blend the populations as much as possible -

Transplant key individuals from Group A with counterparts from Group B. If this is done with care, it will not take long for the individual cultures to be hard to tell apart. Sometimes the transplanting process is unpopular, but it is an important part of the integration.

4. Use the Strategic Process -

It is important to have a common set of goals and a common vision. If the former groups have goals that are not perfectly aligned, then behaviors are going to support parochial thinking.

When conflicts arise, check to see if the goals are really common or if there is just lip service on this point.

5. Reward good teamwork -

Seek out examples of selfless behavior from one group toward the other and promote these as bellwether activities. Verbal and written reinforcement from the top will help a lot. You might consider some kind of award for outstanding integration behavior.

6. Model integrated behavior at the top –

Often we see animosity and lack of trust at the highest levels, so it is only natural for the lower echelon to be bickering.

People have the ability to pick up on the tiny clues in wording and body language. The leaders need to walk the talk on mutual respect.

7. Co-locate groups where possible -

Remote geography always tends to build polarization in any organization. If merged groups can be at least partially located under one roof, it will help to reduce suspicion by lack of contact.

If cohabitation is cost prohibitive, it is helpful to have frequent joint meetings, especially at the start of the integration process.

8. Benchmark other organizations -

Select one or two companies who have done a great job of blending cultures and send a fact finding team made up of representatives from each group to identify best practices.

This team can be the nucleus of cooperation attitudes that can allow unity to spread through the entire population.

9. Make celebrations include both groups -

Avoid letting one group celebrate milestones along the way while the other group is struggling. Make sure the celebrations are for progress toward the ultimate culture instead of sub-unit performance.

10. Align measures with joint behavior -

Make sure the performance measures are not contributing to silo thinking. If the goals are aligned for joint performance, have the measures reinforce behaviors toward those goals.

Often, well intentioned measures actually drive activity that is directly opposite to the intended result. One way to test for this potential is to ask, “what if someone pushes this measure to the extreme – will that still produce the result we want”?

11. Weed out people who cannot adjust -

A certain percentage of the population in either group are going to find it difficult to get over the grieving process. Identify these individuals and help them find roles in some other organization.

It will help both the merger process and the individual. On the flip side, identify the champions of integration early and reward them with more exposure and more span of control.

12. Create incentives for the desired behavior –

People should be encouraged in every way to act and think in an integrated way. This can be encouraged by having the incentive plans pay out only if both units perform seamlessly.

If something awful happens with the business during the integration, don’t panic. Often by working through a crisis or emergency, the vestiges of the old order are wiped out and a strong joint identity emerges.

Use any type of problem as a way to draw people together in a stronger union rather than a reason to focus blame on one particular group.

The road to a fully functioning integrated culture can be long and frustrating. By following the ideas given above, an organization can hasten the day when there are few memories of the old cultures, and people feel a sense of belonging to a single new order.

Bob Whipple is CEO of Leadergrow, Inc. an organization dedicated to growing leaders. This information was extracted from “Trust in Transition: Navigating Organizational Change” – now available at www.astd.org/transition


Don’t Eat Dessert First

July 19, 2014

Cheesecake with fresh strawberries on white plate closeupAs a leader, how many times a week do you say, “We’ve got to motivate our people?” When you do, you make a mistake that often leads to lower rather than higher motivation.

Seeking to motivate employees is the most common thought pattern leaders use every day, so what’s wrong with it?

Trying to motivate workers shows a lack of understanding about what motivation is and how it is achieved.

Leaders who think this way want to eat the dessert before the entrée. While the temptation for the tasty stuff may seem irresistible, it is not a wise strategy because after dessert, the main course is less appealing.

Leaders do not make the necessary mind shift to do the things that actually do improve motivation. So, what is the dessert and what is the entrée?

The entrée is the culture of the organization that either enables or extinguishes motivation. The dessert is how satisfied people feel at any particular moment.

Why do many leaders try to reverse the conventional order; try to motivate people by making them feel good?

1. Poor understanding of motivation -

The notion that by adding perks to the workplace we somehow make people more motivated is flawed. Over 50 years ago, Frederick Herzberg taught us that increasing the so-called “hygiene factors” is a good way to sweeten things (reduce dissatisfaction in the workplace), but a poor way to increase motivation.

Why? – because goodies like picnics, pizza parties, hat days, bonuses, new furniture, etc. often help people become happier at work, but they do little to impact the reasons they are motivated to do their best work.

2. Taking the easy way out -

Many leaders believe that by heaping nice things on top of people it will feel like a better culture.

The only way to improve the culture is to build trust.

By focusing on a better environment, managers enable people to motivate themselves.

3. Using the wrong approach –

It is difficult to motivate another person. You can scare a person into compliance, but that’s not motivation, it is fear.

You can bribe a person into feeling happy, but that’s not motivation it is temporary euphoria that is quickly replaced by a “what have you done for me lately” mentality.

4. Focusing on perks -

Individuals will gladly accept any kind of tasty dessert the boss is willing to dish up, but the reason they go the extra mile is a personal choice based on the level of motivational factors, not the size of the cheese cake.

Putting the entrée before the dessert means working on the culture to build trust first.

Improving the motivating factors, such as authority, reinforcement, growth, and responsibility creates the right environment. Motivation within people will happen. Then, when dessert is added, it is much sweeter.

Why do I make this distinction? I believe motivation comes from within each of us.

As a manager or leader, I do not believe you or anyone else can motivate other people. What you can do is create a process or culture whereby employees will decide to become motivated to perform at peak levels.

An example is when you set a vision and goals then allow people to use their initiative to get the job done as they see fit.

How can we tell when a leader has the wrong understanding about motivation? A clear signal is when the word “motivate” is used as a verb – for example, “Let’s see if we can motivate the team by offering a bonus.”

If we seek to change other people’s attitude about work with perks, we are going to be disappointed frequently.

Using the word “motivation” as a noun usually shows a better understanding – “Let’s increase the motivation in our workforce by giving the team the ability to choose their own methods to achieve goals.”

An organization where all people are pursuing a common vision in a healthy environment has a sustainable competitive advantage due to high employee motivation.

The way to create this is to build a culture of TRUST and affection within the organization.

You accomplish this through consistency and by letting people know it is safe to voice their opinion without fear of reprisal.

You work to inspire people with a vision of a better existence for them and by really hearing their input. Doing this helps employees become motivated because:

• They feel a part of a winning team and do not want to let the team down. Being a winner is fun.
• They feel both intrinsic and extrinsic rewards when they are doing their best work and that is what drives their behaviors.
• They appreciate their co-workers and seek ways to help them physically and emotionally.
• They understand the goals of the organization and are personally committed to help as much as they can in the pursuit of the goals.
• They truly enjoy the social interactions with peers. They feel that going to work is a little like going bowling, except they are distributing computers instead of rolling a ball at wooden pins.
• They deeply respect their leaders and want them to be successful.
• They feel like they are part owners of the company and want it to succeed. By doing so, they bring success to themselves and their friends at work.
• They feel recognized for their many contributions and feel wonderful about that. If there is a picnic or a cash bonus, that is just the icing on the cake: not the full meal.

For an organization, “culture” means how people interact, what they believe, and how they create.

If you could peel off the roof of an organization, you would see the manifestations of the culture in the physical world. The actual culture is more esoteric because it resides in the hearts and minds of the society. It is the impetus for observable behaviors.

Achieving a state where all people are fully engaged is a large undertaking. It requires tremendous focus and leadership to achieve.

It cannot be something you do on Tuesday afternoons or when you have special meetings. Describe it as a new way of life rather than a program. You should see evidence of this in every nook and cranny of the organization.

Do not skip directly to dessert by attempting to motivate people with special events or gifts.

Instead, dine with your people on motivating factors and build the meal around a culture of trust.

The end result is that many people will choose to be highly motivated, and the organization will prosper. Then, if you give some tangible perks for reinforcements, they will be like a wonderful dessert that is more meaningful and longer lasting.


Build More Trust with Your Boss

July 13, 2014

Threatening boss.How much better off would you be if your boss trusted you more in the future? There are literally hundreds of things you can do to increase the trust that your boss has in you.

Here are ten of my favorite ideas to consider. If you do all ten of these things, chances are you will enjoy a healthy trust level with your boss.

1. Be Trustworthy.

In every situation, you need to show integrity and commitment to do the right thing. If there is a lapse, the boss might not pin you down immediately, but each minor slip or major gaff is going into the cerebral cortex of the boss for evaluation.

You can tell when things are not going well by the way the boss acts toward you. It is almost like that instinctive feeling you have when your mate is angry with you.

Nothing needs to be said overtly; you just know. Pay attention, and if there is the possibility of damage, get some remediation going quickly.

2. Show More Trust.

My “First Law of Trust” states that if you want to see more trust coming your way in a relationship, you need to extend more trust to the other person.

Trust is reciprocal, and normally extending more trust will cause an automatic reaction in the direction of higher trust toward you.

3. Increase Communication.

Voids in communication work to deteriorate trust for several reasons.

First, the boss may become distracted by other things and not feel as close to you.

Second, if there is some doubt about how you are reacting to things, many bosses will assume the worst.

Third, the boss may hear things from others about you that are not true or are distorted in some way. You need to ensure there is enough air time to keep the relationship fresh and positive.

The caveat here is to avoid being a pest. It is a fine line from not having enough interface to over communicating.

If you are in doubt, just ask your boss if your pattern of communication is close to optimal.

4. Clarify Expectations.

You may be doing great work but not be dead center on the objectives of your boss. That actually puts your efforts slightly at cross purposes to the boss.

If you start getting some pushback or more micromanaging than in the past, you are likely off on a tangent relative to your boss’s desires. Get this corrected as soon as possible.

5. Don’t Assume.

When we presume to know what the boss is thinking, we sow the seeds of lower trust.

Human beings have a unique way of not divulging full intent, so by assuming you know exactly what the boss wants without verification, you are taking a big risk.

You may be able to get away with it for a while, but sooner or later you are going to disappoint. It is far better just to verify you understand the intent of your boss whenever there is a potential lapse.

6. Call Out Trust Issues.

Do it delicately so as not to offend. If your boss is taking shortcuts or doing marginal things in terms of ethics, it is important to have a channel to ask questions.

Use Socratic Questions rather than accusatory statements as a preferred approach.

For example, rather than saying, “I think you are wrong to move some of the inventory into the sales category for this month,” a far wiser approach might be, “In what ways might the auditors misinterpret our motive if they discover we moved some inventory into the sales category?”

7. Admit Mistakes.

Occasionally you will make a mistake. When you do, it is usually a good idea to admit it to your boss.

I learned that lesson early in my career when I made a serious blunder that my boss would not have known about if I did not reveal it.

I immediately blew myself in by saying,

“You would never know this if I did not tell you, but here is what happened…”

That little speech made a material difference in my career for the next 25 years. Nothing shows integrity and builds trust faster than to fess up to something that would never be discovered if you did not reveal it.

8. Watch The Body Language.

Most of the clues that you are going off course with your boss in terms of trust will not come verbally or even in e-mails.

The information will come “in between the lines,” and you must be adept at picking up the signals. Particularly watch for changes in body language.

In electronic communication, the body language is there if you know how to read it.

Watch for the use of pronouns and distribution changes. Those areas often contain vital information. Also watch the speed of returned messages.

A change there is a signal that needs to be understood. Sometimes it is a simple case of overload, but other times it is a manifestation of lower trust.

9. Show Appreciation.

Do not go overboard and become an overt sycophant, but do have an attitude of gratitude when the boss does positive things for you.

In this area, the observation of body language is particularly critical. Watch for changes in gestures to recognize if you are laying it on too thick.

10. Care About Your Boss.

In the hubbub of daily activities, it is easy to forget that your boss is a person with hopes and dreams.

Get involved in his or her personal goals in a prudent way. Find out about the family situation, if that is acceptable, and inquire about how things are going.

Do not do this in a manipulative way but in a sincere caring way. People do nice things for people they like. If you truly care about your boss, that will encourage a reciprocal feeling within that person, and the relationship will grow stronger.
There are dozens (perhaps hundreds) of other ways you can enhance the trust level with your boss and build a strong relationship that will endure.

Follow these ten rules and you will be well on your way to a healthy relationship. That philosophy the cheapest and most effective insurance policy you can acquire in any organization.


Why Some Bully Managers Last

July 5, 2014

aggressive businessman bullying colleaguesA student in one of my graduate leadership classes posed an interesting question. If bully managers cause so much grief, why are so many of them allowed to remain in power?

The question got me thinking of the many reasons bully managers, even the extreme ones, seem to hang onto their positions. Here are some of the reasons.

1. Weak Leadership Above – If a bully manager is allowed to remain in place, it means the leaders above him or her are not doing a good job. If those in charge look the other way while a manager is abusing people, then they are the real culprits.

It is rather easy to spot a bully manager when doing a 360 degree review process, so once one is identified, if the person is allowed to stay in a management position year after year, I blame the top leadership.

Also, weak leadership might look the other way because the bully has powerful allies. Bully bosses intimidate people at their own level and higher in the organization. They know the buttons to push or people to pressure in order to get their own way. If a weak leader is afraid of the bully, that can be a reason this person is allowed to continue.

If the bully is the top dog and not beholden to anyone, there is no force from above to curtail the negative behaviors. In this case, barring some kind of epiphany, the bully will keep on with the same conduct until he or she leaves.

Attempts from below to enlighten this person will usually be fruitless; they may even exacerbate the problem.

2. Sufficing –

A bully manager does elicit compliance because people are fearful. The unit reporting to this manager will perform at a credible level, even though people are unhappy and underutilized.

The crime is that the unit could be so much better, and the lives of the workers could be richer if the manager was replaced by someone with higher Emotional Intelligence.

Many units get by sufficing on a culture of compliance and avoidance and do not even realize the huge potential they are missing.

3. Being Clueless -

I have written on this before. The idea is that most bullies simply do not see themselves accurately. They would view themselves as being tough or having high standards of conduct.

My observation is that most bully managers are genuinely proud of their prowess at getting people to behave. They have no impetus to change, because their twisted logic reinforces the behaviors that elicit compliance.

They often view themselves as smarter than the people working for them and bark out orders because they sincerely believe they know best.

Another clueless possibility is that the entire corporate culture is stuck in this Ebenezer Scrooge mentality.

Hard as it is to fathom, there are still old style companies where management likes to terrorize. The same holds for family businesses where one generation intimidates the next.

4. Lack of trust -

A bully manager trashes trust on a daily basis without realizing it. When trust is low, all other functions in the organization operate like a car would run on watered-down gasoline.

The irony is that when the bully manager sees things sputtering and not working well, the logical reaction is to jump in with combat boots on to “fix” the problems.

That bullying behavior perpetuates the problem in a vicious cycle of cause and effect. If there is no external force to break the cycle, it will just continue.

5. Short term focus -

Most bully managers have a fixation on short term actions and do not see the long term damage being done to the culture. They would describe “culture” as some squishy concept that is for softies.

If you propose ideas to improve the culture to a bully manager, he or she will start talking about performance and accountability. Holding people accountable is a very popular phrase in management these days.

Imagine a world where there was less need to talk about holding people accountable because the culture they worked in was one that automatically extracted their maximum discretionary effort.

If the vast majority of workers in a unit habitually performed at the very peak of their potential because they wanted to, then accountability would take care of itself.

6. Lack of skills -

Bully managers often have not had good leadership capabilities built in through training and mentoring. You cannot blame a tyrant if he or she has never been shown a better way to lead.

Bully managers are often accused of having a “my way or the highway” attitude toward people, but I would contend that many of these misguided individuals simply feel “my way is the only way I know how to get things done.”

For these leaders, some intensive reprogramming can be an effective antidote only if they come to the table eager to learn new ways.

7. Fear means people will not challenge -

Most workers are not going to be willing to challenge a bully boss. The fear of getting their heads chopped off for leveling with the boss makes the prospect of telling the truth feel like knowingly walking into a lion’s den.

Every once in a while there is a person so foolish or confident that he will just walk into the lion’s den because there is little to lose. This person can help provide shock therapy for bully leaders by providing data on how the behaviors are actually blocking the very things the leader wants to accomplish.

These people might be called “whistle blowers” because they provide an errant manager, or the leadership above, with knowledge of what is actually happening.

Occasionally, a bully manager is so extreme that he or she must be removed and replaced by a more people-oriented manager. Unfortunately, it is also true that many bully bosses have the ability to remain in place for long stretches.

This adhesion to power is extremely costly to the organization in terms of current and future performance along with a prime cause of high turnover. If you have a bully manager reporting to you, get him or her some help through training.

If that does not work, move the bully out of a leadership role and put in someone with high Emotional Intelligence.


Is Labor an expense or an asset?

June 28, 2014

 

Construction workerI am surprised by how different managers view the commodity called “labor.” In most organizations, the perspective is that labor is an expense.

It is handled on the financial statements as an expense. In most cases labor is the highest monthly expense for an operation. It is the payment made in order to secure the resources needed to create the products or services sold by the organization.

As the largest expense for many operations, labor is watched and managed very closely. The profitability of the operation is directly impacted by how many workers there are, so all kinds of techniques are used to keep this variable under tight control.

You want to have exactly the right number of people on the roster, so perhaps you utilize temporary workers during peak times to mitigate overtime. You need to be careful because you still have to train the temporary workers so there are no safety issues or quality lapses.

In most professional settings, the workers are stretched to the elastic limit and beyond. Managers ask individuals to take on responsibilities that were formerly done by two people or even more.

This is done in the pursuit of maximum productivity, which is thought to be the prime governing mechanism for profit.

In the budgeting process, managers at various levels play games trying to pump up the size of the workforce realizing there will be cuts down the road. Alternatively some managers cut the estimated number of people to the bone in order to show positive yearly trends in productivity.

The sequence goes on year after year in the majority of organizations. The game is well known by managers at all levels, and the posturing or tactics sometimes go beyond annoying and are truly outrageous.

In the significant minority are organizations who view employees not as expense items but as assets. Oh sure, most companies have a value on the plaque in the lobby that states, “People are our most important asset,” but the managers’ daily actions reveal the hypocrisy of that platitude.

If people were the most important asset, then during times of low demand, the managers would be selling inventory or buildings and training the employees for future service. Instead, you inevitably see layoffs or at least furloughs to control labor expenses in slack times.

What if we really did think of employees as assets rather than expenses? Would that provide some unique and amazing possibilities for profits? I think so. Here are some benefits you would see…

1. People would feel valued.

In most organizations, people feel like pawns. The investment is always minimal, and the expectation is that employment is a temporary condition at the whim of management and the vicissitudes of the fickle marketplace. Treating people as valued assets would bring out the best in people because they would feel more engaged in the business. The magnitude of this effect can only be estimated, but it is a lot larger than most leaders realize.

For example, several studies have shown that the productivity multiplier between low trust groups and high trust groups is two to five times. When people are engaged in the work, they perform significantly better because they feel valued.

2. Development of people would be emphasized.

The mindset of treating employees as assets would lead to continual training. When you invest in an asset, you take care of it and make sure it is performing at peak levels. This creates a situation where employees truly want to stay with an organization, which reduces the issue of turnover.

Turnover is often the most controllable expense in an organization, yet the true cost is hidden somewhat. World class organizations achieve turnover rates below 5%, while many organizations habitually live with a 30% or higher turnover rate. Which would you rather have?  You do have that choice.

3. The culture would be uplifting.

When employees are learning and growing, they become more valuable not only for what they can do but for how they influence others. The workplace takes on a feeling of freedom and joy rather than of being an oarsman on a Viking ship.

When people are treated like assets, they band together as a strong team or family that is unstoppable. The power of synergy is obvious, and the productivity gained from lack of quarreling is immense.

4. The focus would be on the right stuff.

In most organizations, the daily focus is myopic. People are grumbling about each other and trying to protect their turf and future. The atmosphere is one of scarcity where the resources are not there to do what is needed to survive.

When people are assets, the atmosphere is one of abundance where there is high value internally, so people focus on the customer and on the mission of the unit. Since there is no longer a need to protect your back, you have the ability to move beyond just satisfying the customer or even delighting the customer to actually amazing the customer. That focus becomes a competitive weapon which further entrenches security for the future.

5. Organizations could be made flatter.

The need for numerous hierarchical levels has to do with control. When people are treated as expense items, they need to be kept in line. That means the span of control for any one manager cannot be too great. There is a lot of accounting work that needs to be done in order to assure the expense of labor is optimized.

When people are treated as assets, trust grows naturally. That dynamic means less supervision is required, so over time the hierarchy can become more flat. The overhead cost savings available to most organizations is staggering.

These are just five ways an organization can prosper by considering employees as assets instead of expenses. The operation can be much more profitable with this kind of mindset. Try it in your organization and experience the difference for yourself.


Why M&As Fail

June 24, 2014

HindenbergAccording to one study, (Selden & Colvin, 2003, Harvard Business Review) nearly 80% of mergers or acquisitions fail to reach their initial performance targets.

Not all of those crash and burn, but the results are none-the-less disappointing.

The reasons for these failures are as numerous as leaves on a tree. I believe there are some conditions that align to stack the odds in the direction of failure rather dramatically. Here are ten examples:

1. Perspective Problem

When first contemplating a merger, the benefits are rather easy to see and to quantify.

The problems or impediments are far more numerous, yet most of them are hidden from view, like bats in a cave. They will eventually come out and swirl around us, but at the start we do not know the magnitude of the problems.

If we are lucky, and we picked the right cave, the problems will be small and manageable, but if we are unlucky, the sky can turn black with a swarm of issues, and our safety nets are woefully inadequate.

2. Over Enthusiasm

The senior leader “falls in love” with the concept of the merger and loses a sense of reality.

If anyone dares to question the sanity of what is being contemplated, that person is dubbed a non-team-player and sent off to the minor leagues.

Just as love can be blind, managers can ignore the symptoms of problems until it is far too late. Then, all that can be done is to mitigate the damage.

3. Focus on Financials

The deal is conjured up as a financial arrangement having to do with ownership of property, technology, and processes.

The cultural aspects of getting people to work together effectively is assumed until the deal is struck.

The polarization between groups and the interpersonal hassles metastasize throughout the organization and become untreatable very quickly.

4. Wrong People on the Bus

During the run up to a merger, people are aware of what is going on, even though there is a laughable charade of secrecy.

The highest performers recognize the risk and have their alternate landing spot already selected. By the time of the announcement, some of the best people already have job offers elsewhere.

The poorer performers hunker down in the trenches and become problems to deal with after the news is announced.

5. Lack of Trust

The games played during the due diligence and negotiation end up destroying trust within both organizations, and neither group has much trust in the other entity.

Building up a culture of high trust is a daunting task under the best of conditions, and trying to do it amid the chaos of a whole new organization is about as likely as the sun turning blue.

6. Stiffing the Customer

The customers of both organizations don’t care a whit about the integration. They just want seamless service and excellent quality products on time.

When both organizations are urgently focused on stamping out internal problems and redefining their processes, there is little focus on satisfying the established customer base.

In hundreds of ways the poor customer’s needs get shoved to the back burner every day. Since there are alternatives, it does not take long for smart customers to turn elsewhere.

7. Uncertain Environment

People at all levels are petrified. They really do not know their future, and they just hang on until the dust settles.

Teamwork is pretty rare, and everyone is looking out for number one. Meanwhile the work is not getting done as before because people are not getting clear marching orders.

8. Spotty Communication

Since a good portion of the discussions are supposed to be secret (which is a true sham since everyone in both organizations knows what is going on) little credible communication is coming out of the top level.

This environment is a perfect incubator for rumors and gossip that only add more instability to an already fragile system.

9. Faulty Assumptions

Many of the procedures must be recast with both groups having to change in some ways. It is common for both groups to feel they have been “taken over” and forced to revamp their culture to accommodate the other entity.

Bitter feelings arise as people would rather live in the world that existed before. Of course that is not possible, so there is a grieving process going on, just when the organization needs people to be at their best.

10. Chaos

You can observe true chaos in one of these situations. It is as if a major earthquake just hit off the coast, and people on the island are scrambling because of the tsunami to follow. Not much constructive work is happening during this time.

These are just ten of the conditions that make the M&A process so chancy. There are dozens of other negative things going on as well. It is no wonder the track record of success against the goals is so low.

My new book, Trust in Transition: Navigating Organizational Change, explains how to improve the odds dramatically by focusing equal energy on the cultural parts of the integration as the mechanical process. Doing this mitigates all of the problems listed above and gives a fighting chance for success, despite the issues.

Trust in Transition Cover060The book will be launched on August 18, 2014 by ASTD Press and is currently available for preorder. The book is about how organizations must do a better job of preserving and enhancing trust when they go through changes such as reorganizations, mergers, acquisitions, or other restructurings. Your purchase of the book includes access to a set of videos that enhance several of the key points. For a video introduction to the book, click here.


New Book: Trust in Transition

June 21, 2014

Trust in Transition Cover060Is it possible to make major organizational transitions without catastrophic loss of trust?  I think there is, but the odds are against you unless you change the conventional thinking process. What is required is a new approach toward navigating organizational change.

My new book, Trust in Transition: Navigating Organizational Change, will be launched on August 18, 2014 by ASTD Press and is currently available for preorder.

The book is about how organizations must do a better job of preserving and enhancing trust when they go through changes such as reorganizations, mergers, acquisitions, or other restructurings.

Your purchase of the book includes access to a set of videos that enhance several of the key points.

There are numerous books on managing change, and many books and articles on M&As. My book is unique in that it focuses on the actions and behaviors needed to maintain the vital trust between people and organizational layers during the process of change.

A link between trust and organizational performance has been demonstrated in numerous studies. The correlation is strong, and the leverage offered by high trust is impressive. Most studies show a two to five times productivity benefit in high trust groups over low trust groups.

Can you name any other single factor that can offer a 200% improvement in productivity?

When organizations contemplate changes, the manner in which the effort is planned, organized, announced, managed, and led has everything to do with the impact on trust.

Unfortunately, in the vast majority of cases, the changes end up having a profound negative impact on the culture just when trust is needed the most. This condition ends up undermining the change effort and leads to a documented dismal track record of almost 80% of transitions not living up to expectations.

Thankfully, failure can be avoided by taking steps right from the start of a change process to act differently and prevent problems from occurring. The old adage of “an ounce of prevention is worth a pound of cure” holds true for this situation.

If some changes in mindset can be accomplished from the earliest plans for a change, the ability to retain or even grow trust during change is possible.

My book is about how to break the cycle of change failure by focusing as much effort on the cultural integration as on the mechanical parts of the change process.

Unfortunately many leaders have had professional training in the MBA schools that emphasizes the mechanical aspects of the change process such as negotiation, due diligence, financial valuation, or legal implications.

These subjects are critical in transitions, but they should not squeeze out the considerations of how to get people to work well together during and after the transition.

The focus on the financial and legal implications of a change are forced on center stage, and what ends up back in the wings is the fragile culture of trust between people in the organization. That is a problem, because the end result is a change effort that works well on paper but often fails to meet expectations in the real world.

The book contains dozens of areas where leaders unwittingly make errors in judgment which undermine the changes all along the way. By following a parallel path that works just as hard on the culture as the deal, leaders can greatly improve the odds of success.

I will provide a series of articles on this blog over the next few months that look at different aspects of the change process to suggest pragmatic antidotes to common problems.

Investing more leadership attention to the culture early in the change process will have a profound positive impact on the success rate.

I hope you find the tips I offer in the book and in future articles to be helpful at preserving trust in your organization. Nothing could be more vital for your ultimate success.


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