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Cleaning Up the Promisphere in Companies

Recently, the breakdown in worker/management relationships at RBTT Jamaica and the Fiesta Hotel in Hanover, Jamaica have made me think where I would start, if given the chance, to make a difference in each of these companies.

I would start by working to restore the condition of the promisphere in each company.

What is the promisphere?

The promisphere is the internal environment within a group that consists of promises and agreements that have been made, broken, changed or are hanging in limbo. It also includes promises that are expected to be made, believed to have been made or thought necessary to make at some point in the future.

The total environment of promises collectively work together to create a promisphere.

Just like our physical environment, a promisphere can be polluted. In fact, there is almost no perfect promisphere that exists, simply because groups are made up of people who are imperfect.

In the case of RBTT Jamaica, the workers went on strike on Friday. In the case of Fiesta Hotel, a worker was shot in a recent riot. In both cases, the workers will be back to work on Monday. At RBTT, they have been ordered back to to work by the government. In the case of Fiesta, there was a negotiated agreement, again brokered by the government.

On Monday morning, it is likely that each situation will be a tense one.

There will be a temptation for the leadership of both companies to “grin and bear it” — try their best to “just move on” without dwelling on the problem at hand, or the past. In fact, they will be quite happy if collective amnesia were to set in.

Unfortunately, this remains the best tool that most managers have — an ability to force things to move on, and to avoid talking about the difficult issues at hand.

However, this approach only works to delay troublesome issues, and in the case of the Jamaican workplace, it only serves to allow issues to build a quiet, dark momentum.

A much better tactic is to deal with the promisphere.

In each company I have consulted with that has issues between individuals, or groups of individuals, there has existed issues with respect to the promisphere.

A promise made in public that no merger was underway, was broken when the merger was announced within a matter of days. A promise made to clean up the physical environment is abandoned. An agreement to increase wages is laid aside.

An expectation that the company is a family is willfully violated in a newspaper report. A secret told in confidence is leaked. An expectation that a manager will be around to lead his people is violated with an abrupt resignation.

These are everyday occurrences in business, and they happen between people and groups who are good, bad or somewhere in between.

The point is, that a transformation in the culture of a company, department or team cannot happen unless the following takes place:

  • broken agreements are restored
  • amends are made for forgotten promises
  • apologies are rendered where damage has been done
  • mis-understood promises are openly dealt with

These simple acts take courage, but their effects are powerful. Trust can begin to be restored, forgiveness can start to heal relationships, and the promisphere, which is critical to getting complex work done in groups, can be restored.

A well-working promisphere is not one that is empty of promises — instead it is filled with clarity, and the simple power that comes from human trust and mutual expectations.

Ultimately, and in the real world, all promises cannot be kept.

In a well-working promisphere all members are vigilant for the smallest instances of pollution. They act as if the smallest promise that is broken is easier to resolve sooner than later, and that the collapse of this very fragile entity starts with small instances of overlooked agreements.

The very worst companies do not even acknowledge the existence of a promisphere, and are oblivious to the effect that seemingly simple actions have. They rely on unauthentic and hollow “rah-rah” efforts to get people excited, which fail because they are built on promispheres that result in:

  • skeptical employees that assume the worst — “Yeah right…”
  • pessimism and doom-saying — “Whatever…”
  • constant questions about whether or not the newest statements/efforts/projects/initiatives can be trusted, because of what happened in the past

The worst companies just try harder, with more posters, slogans, slicker graphics, more consultants, newer programs, more exotic team-building, longer surveys, new mission/vision/value statements, etc.

As a consultant who is sometimes brought in under these auspices, I try to ask each and every time when an executive explains that things are not working — “What is the state of the promisphere?” (without actually using the word.)

The truth is that companies should forget about trying to do anything different until they begin to see some gains in cleaning up their promisphere. Only then will they be able to move them, and their people ahead.

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Customer Experience “Intelligence”

An article entitled Understanding Customer Experience recently came out in the February 2007 issue of the Harvard Business Review that echoed some of my earlier posts on the topic.

Here is one of those prior posts.

I am convinced that a focus on experience can be more easily taught to Caribbean service workers, than training based on abstract standards or vague definitions of “customer needs.”

Perhaps there is scope for something called “Experience Intelligence” which has to do with a customer service provider’s ability to scope out the experience that the customer is having in the moment. This phrase seems like a much more precise way to define this important skill.

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Self-Interests and Selfishness

Framework cultural interventions rely, in part, on assisting employees at all levels in seeing their self-interests more clearly.

One criticism of this approach comes from a fear that if the pursuit of self-interests are the means, that the result might be mayhem as people do what they want selfishly.

The typical response is a moral one: “people should not be encouraged to be selfish.”

Unfortunately, moral reasoning rarely works, and seems to generate more guilt than anything else. Guilt is more often than not paralyzing, so the repetition of the morality of unselfishness produces little more than a stasis.

Instead, our approach is to deepen self-interest, trusting that if it is pursued wholeheartedly and rigorously, the result will actually be the same as that of the moralists. It is just that the pathway is much easier to follow, and is more likely to produce results than repeating the greatest sayings from any of the moral writings produced to date.

To illustrate, let us look at President Bush’s war in Iraq.

He honestly believes that the war in Iraq is morally correct – of that there is little doubt. However, what he could perhaps be persuaded to see is that continuing the war is not in America’s best self-interest.

The country seeks to live in a peaceful world, and it is obvious that the Iraqi occupation has and will continue to generate more opposition in the form of jihadists, terrorists, nationalists, Islamists and others who are growing up learning to hate America. He might also see that it is in America’s interest to demonstrate that the use of force is not the best way to resolve differences, as it tend to breed further force. Instead, it is in America’s best interest to demonstrate what peaceful approaches can accomplish in the hope that others may be persuaded to follow suit.

I am not saying that this will work or not with President Bush, just that it is more likely to accomplish the result, merely because the self-interests from which he is making decisions is just too narrow to succeed.

The book Freakonomics, makes the case that most drug dealers live at home with their mothers. They cannot afford to live on their own as the vast majority of them “earn” less than the minimum wage from dealing drugs. Only a tiny percentage “make it” to the top (as in any corporation,) and along the way the risks of being killed by another gang member, imprisoned or overdosing is considerable.

Perhaps the only reason that young men choose to be dealers is that they are unaware of the true nature of their full self-interests, and therefore, how to accomplish them. To say it somewhat differently, their choice to enter the gang is based on a very thin slice of self-interests.

A drug addict who takes the very first hit from a crack pipe does not do so with the intention to kill themselves slowly, painfully and publicly, even when there is abundant evidence around them that this is their likely fate. Instead, at the moment before they inhale their true self-interests are hidden from view, or obscured by their need to feel good, be accepted or to numb themselves from inner pain.

Their choice to do drugs is based on a small subset of their true self-interests.
Unfortunately, in today’s world we suffer from accusations of selfishness, and this prevents us from pursuing self-interests openly. Instead, we cover them up by pretending that our actions have nothing to do with us.

All it actually reveals is that we have been thwarted in our thinking, and stopped from pursuing our self-interests a far as we could.

The irony is that the person who has a commitment to deepen their self-interest quickly discovers that (to the surprise of the moralist) it deeply involves and includes other people.

As a thought experiment, take anything or concept of value: love, money, work, sex, possessions, service, giving, having fun, etc. Think of how each of them only makes sense in the company and experience of others.

Getting more sex involves giving more money. Getting more service requires giving more service. Having more love means giving more love. Having more work means giving more work.

The pursuit of self-interest does not lead to an inward-turning selfishness – not if there is rigour and honesty. Instead it leads to the discovery that when I have more of what I really want, you have more of what you really want.

This simple line may take a lifetime to appreciate, but it need not.

Instead, we can accelerate how we all learn its truth by encouraging each other to learn how true it is from actual, first-hand experience, rather than from someone else in the form of a dictate.

There might be a shortcut available to all of us here. Gandhi said: “If you want to change the world, become the first change.” We might expand that here to mean, “If you want anything, pursue it, and discover the degree to which it involves and includes other people, then act freely to want it for all.”

That might be the way to know, deep in our, hearts that our interconnectedness is real, strong and true. Martin Luther King said “We are connected .. interlocking web of …mutuality.” In Africa there is a word: Ubuntu – which means that I am all I can be, until you are all that you can be.

Perhaps this all works because we humans are all so very similar – made from the same “stuff.”

I want to be loved, and so do you. I want to love, and so do you. Loving is much easier when we both know what we want, and that it is the same thing.

Selfish? Who knows… Motivated by self-interested? Absolutely.

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The Power of Self Interest

In Framework’s cultural interventions, one of the ways in which individuals transform themselves is by recognizing that some of their current actions are not in their own self-interest.

Often, we humans struggle to understand each other. In the workplace, management struggles to understand workers and vice versa, as motivations appear to be not just hidden but alien to their own.

In the not-so recent news, RBTT Jamaica announced that they had accomplished record profits. This week, a strike was averted when the management decided, at the eleventh hour, to change its offer of an increase in wages from 4% to 6%.

I imagine that some workers are wondering why the bank’s management and ownership cannot see that treating them well is the key to making even greater profits in the future. In other words, workers think management cannot see that it would be serving its own interests by granting the increase that the workers are (at this point) demanding.

By the same token, management is probably asking itself why the workers cannot see that putting more of the profits into wages rather than new investments means slowly killing the goose that laid the golden egg, by starving the bank of opportunities to grow itself.

What might be missing at the moment (and this is pure conjecture on my part) is that management and workers do not share the same self-interest. In other words, they cannot see it or separate it from the other points of view that are competing for their attention.

A powerfully defined self-interest would change everything, and it would not even have to be the same for both.

To illustrate, every spiritual and wisdom tradition that I am aware of counsels against holding grudges.

Why so?

Can the truth be found in this old saying: “Revenge is like drinking poison, hoping that someone else will die.”

A grudge is a self-sentence, as it imprisons the one holding the grudge to a life of vigilance – watching to make sure that the person they have mentally imprisoned never escapes.

Unfortunately, the person holding the grudge is unable to see their own full self-interest, and can only see the passing benefit they feel from blaming the person.

In reality, the other person might well be leading a happy, fulfilled life. They cannot be aware of the depth of the grudge (indeed, no-one can.) The torment that the grudge produces is experienced for the most part in the mind of the one holding the grudge.

Holding on to it is just not in their self-interest.

In our interventions we focus on training employees to manage their own self-interest in an enlightened way. We have found that if an employee can appreciate and accept more of their own self-interest, they make better choices.

When coaching an individual, we might ask:
a) What is your self-interest?
b) What are you doing to accomplish it?
c) What are you doing that is working against it?
d) How can you better meet your self-interest?
e) What other self-interests do you now see?

What we have found is that telling someone that they should “be less selfish” does little more than make them feel guilty, and is a difficult leap for many employees to make in a working environment, as companies are not created to accomplish moral goals. Instead, companies are formed with the clear intention to achieve material goals, and at the source of every corporation is a person or group of persons that were unabashedly pursuing a self-interest.

The real problems come when individuals and companies lie about their self-interest, and insist that they either “don’t have one” or are “above such things.” These lies prevent the kind of truthful cooperation that produces partnerships, in which, for example, both managers and workers are honest about their self-interests, and can plainly see that they must cooperate to accomplish them.

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Relationships and Transformation

Here in Jamaica, much of our crime is not based as much on greed as it is based on relationships that have gone sour. Or in other words, grudges.

A study from a few years ago (which I wish I could get my hands back on) showed that the majority of our murders are not done randomly, but instead are based on personal relationships that have gotten to the point where one party is willing to kill. The frame of mind that is created is one in which one or both people can only see murder as the way to resolve the hurt feelings that they carry.

From the outside, this may seem bizarre.

But for those who are inside such relationships, it makes perfect and complete sense. While they know that killing is wrong in some moral sense, the pain that they are feeling in the moment vastly overwhelms and overcomes any other process or sentiment.

Such is the power of deeply hurt feelings.

One hears these stories all the time in the Caribbean: inadvertent slights leading to verbal altercations, fights and even murder. I remember being in Washington DC and hearing a story about a shooting that started when one man accidentally stepped on another man’s foot.

The result? One dead. Another imprisoned.

While these are extreme examples, the high murder rate in Jamaica and the increasing murder rate in Trinidad lead us to think that what happens in the region’s companies is a scaled-down version of what happens in our neighbourhoods and communities.

Not that people are killing each other in companies on a large scale. Instead of measuring murders, one might decide to measure what happens to profits. However, a transformation that impacts behaviour and results (murders or profits) might start with a different way of thinking in both cases, and this is where companies can learn a thing or two.

When companies develop a commitment to transform their cultures, few imagine that it has much to do with altering the way in which people relate to each other. Yet, at Framework our experience shows that new ways of relating and communicating are the only way in which people know in their own experience that anything is different.

Where then to focus? There are two points that we think are worthy of exploration, and both are related to what are simply deeply held grudges.

  1. The first has to do with the source of the hurt feelings. On one end of the spectrum, there is someone who takes everything personally, trying their best to defend themselves against future pain. To them, hurt feelings are caused by external people and circumstances.

    On the other end, there is someone who believes that feelings are generated in response to events, but are created only by the person holding them.

    Obviously, the second person is able to affect their internal feelings more powerfully than the first. They realize that the levers of their internal state are in their hands, and nowhere else.

  2. Once hurt feelings are recognized in any form, the question is “what to do with them?” An unskilled person will take actions to try to prevent the feelings from recurring – some strategies include removing themselves, ignoring the person, refusing to speak with them, cursing them, abusing them and even killing them.

    A skilled person might instead seek to engage other people in conversation. They know that feelings can change in an instant, and try to find ways to work things out and thereby neutralize the hard-felt feelings.

These two steps in dealing effectively with grudges are the building blocks of creating a new company culture in the region’s companies, for our greatest challenge is how our people do, and do not, work together. Companies in the region that are serious about building values into their culture operate differently, and distinctly, by providing their employees tools in the above 2 dimensions that assist them in the living of their daily lives.

Grudges, then, can be learning tools around which useful coping techniques can be taught. They are real, and can be embraced and given full life in the right kind of learning situation.

During our corporate cultural interventions, we are beginning to see the power of using grudges as turning points, giving employees tools to deal with hurt feelings, and therefore work relationships, effectively.

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FirstCuts Issue 4 — Transforming an Airline

FirstCuts
A Framework Consulting Online eZine
High-Stake Interventions — New Ideas Issue 4 October 21, 2006

Transforming an Airline
by Francis Wade

Editorial
This past week I attended small parts of the Human Resource Management Association of Barbados’ annual conference in Bridgetown. I had an opportunity to reflect on how lucky I am to be a Caribbean professional — one who travels and works across a region that I am proud to be a part of.

This contrasts with the time spent living in the U.S.A. when I could never shake the feeling of being a stranger in a country I was unable to care deeply about.

I am thankful to be home, and I consider each territory in our region to be a part of my extended home, and each business to be one that is an economic extension of my own.

In this sense, my comments on BWIA in this issue are spoken as an extended owner,and while the airline’s seemingly rough landings make me very nervous each time around, I think of them as our landings, by our airline, owned by our people.

Francis

Transforming an Airline

I flew BWIA West Indies Airways last week and had some time to think about its upcoming demise.

BWIA, the official carrier of Trinidad and Tobago, is officially going out of business on Dec. 31, 2006. It will be replaced by Caribbean Airlines, which apparently will take over much of the equipment, personnel and routes of today’s BWIA.

At the same time, there have been announcements in the press about the possibility of an upcoming merger between the airlines of LIAT and Caribbean Star. The coincidence is that both of these activities are taking place in the same industry, at the same time. As a past customer of all three companies, I read the pronouncements in the press while thinking that not much would change.

As I sat in my seat on a recent BWIA flight wondering where my lack of confidence was coming from, I happened to lower the tray-table and registered a familiar sense of annoyance with a “steupps” of the teeth. As usual, the back of the pink, leatherette seat in coach class was defaced with graffiti and pen marks.

Just as you would expect, given that most people are right-handed, more of the blue and black mess is on the right than the left. The marks look accidental for the most part, but now and then there is evidence of a malicious adult and mischievous child leaving their “mark” on purpose with a note that they “….wuz ‘ere.”

A pet peeve of mine is that somewhere, someplace, someone decided to pick these particular seats. The problem with them is not that they are ugly, but that they are perfect for writing on. The result is graffiti… hidden behind the tray-table, on the back of every seat.

I cannot say how all this came about — who decided on
the colour scheme, or the choice of fabric. How is it that the
seats could not be reliably cleaned? Why couldn’t someone install some kind of cover?

And why should I think that this particular annoyance will not
be repeated in the new Caribbean Airlines?

I am no expert on the airline industry, but I can predict that
whatever organizational culture allowed messy seats to be the norm, is likely to be continued in the new company. After all, the CEO will be the same, and the vast majority of the new airline’s staff will be drawn from BWIA.

I asked myself, if I had a blue-print for creating the new airline, what would it look like? I came up with three simple, but uncommon steps that I think would apply to Caribbean Airlines as well as to the possible LIAT/Caribbean Star merger.

The airlines should focus on embracing, rather than denying, their history of failure, co-creating the future with their employees and making bold requests for action and sacrifice.

********* Step 1: Embrace the History of Failure

The tendency of most organizations in a transition such as this one is to try to fast forward work to define the new company, in an attempt to quickly put some distance between the new and the old dispensations. The website announcement of the new airline bears this out. There is no mention of the reason why BWIA is closing; the announcement speaks only to how lucky the
new airline is to inherit the fine safety record of the soon to be defunct airline.

Unfortunately, any kind of transformation program gets its strongest start from doing the exact opposite. Instead of ignoring the past, the first step to a deep transformation is to embrace the historical reality fully and completely.

One way to do this would be to engage all the employees in an exercise to bring closure to the company’s past. This exercise would have to encompass both the positive and negative aspects of the company’s performance to date.

The truth is, in spite of best efforts, BWIA was a financial failure. At the same time, many good things happened for the thousands that were employed and their families in its sixty-plus year history. In Step 1, this mix of positive and negative results would have an opportunity to be fully aired and expressed.

Practically, this could be done in BWIA in a series of meetings, primarily devoted to exploring the past in order to tell the truth about it. There would be no effort to try to change anything at this point. Instead, the positive end-result would be that people’s aspirations and hopes would have a chance of being put to bed, and their disappointments would have an opportunity of being addressed.

I imagine employees saying “Thank You,” “I am sorry this did not work out” and “Goodbye. “

For the typical results-driven, Type A executive, especially, this can all be very difficult medicine to swallow.

“Embracing the history of failure” looks an awful lot to them like slowing things down, and avoiding the job that needs to be done. They might well argue that people should be able to move on, and just forget about the history. Or they might say that such an exercise should be delayed until the new company is launched.

However, it is quite normal for a CEO to be able to mentally and psychologically make a shift that their staff cannot.

The staff of the new airline will have 550 employees, compared with the 1800 that BWIA had. The vast majority of them will come from the old company.

The fact that they would have been selected, and their colleagues left without jobs, provide perfect conditions for survivor guilt, the debilitating emotion that affects employees in situations like this. Research has shown that employees experiencing this phenomenon can experience productivity decreases by as much as 50% for months at a time.

Doing the exercise inside BWIA, rather than Caribbean Airlines, could leave everyone satisfied that they have done their best to take care of all their colleagues, while preparing all the ex-BWIA employees for whatever is next in their careers — Caribbean Airlines or not.

I imagine that the transition team is currently focusing on the “hard” aspects of the business — those that are measurable and tangible. If executives could stop the frenetic 24/7 activity that is no doubt underway, it would help build a strong foundation for the new airline to build on.

From my work with regional executives who have lead such transitions, their message is a singular one: the “soft” aspects of your transition are more important than you think.

********* Step 2: Co-Create the Future

Once employees experience closure, it takes only a nano-second before they feel the creative impulse to create anew. A smart company will capitalize on this energy and meet this impulse with an opportunity to co-create.

From my experience, it does not matter what exactly gets created, whether it be a statement of values, vision, strategy, a business plan or even a new company logo.

The actual creative activity is irrelevant.

What is important is that the activity be authentic. It must be vital to the well-being of the company. It cannot be merely “symbolic.”

It is equally important that everyone has a chance to be heard, to contribute, and to see how their contribution might be included in the final result.

I have seen very few companies in the region put themselves through this process, and do it well. I put this down to a paucity of methods, and an unwillingness to risk the activity going badly on a public scale, rather than a lack of awareness of the need.

********** Step 3: Call to Action and Sacrifice

This might be the hardest step of all.

CEOs and Managing Directors in our region have come to believe that a key part of their job is to shield their employees from bad news. This paternalistic relationship is one that is actively encouraged or passively allowed by both employees and managers.

However, paternalism is the very opposite of the responsible, adult-like give and take that marks healthy companies. Without this kind of relationship, it is impossible for companies like BWIA to make the changes it needs to make.

Obviously, if Caribbean Airlines conducts “business as usual,” it will result in more of the same failures.

What most leaders fail to realize is that when their employees are working with them to co-create a future, they are ready, willing and able to make the changes necessary to bring it
about. When the requests made of employees are bold, and big, it can help to demonstrate that the days of paternalism are over, and that progress will only come from cooperation.

In fact, it is widely believed that BWIA’s demise had more to do with a lack of cooperation than anything else. The inability of the management and unions to work together to save the company was seen by the owners as the final straw.

This third step is not optional.

If this step is not taken, a dangerous vacuum gets created. In response, employees in our region retreat even further into a paternalistic mindset, waiting for management to “tell them
what to do next.”

If it is taken, managers can make the case that the unusual circumstances involved, require everyone to find ways to change the way they do business. In the case of Caribbean Airlines, a critical mass of employees doing business in new ways is the only thing that will make a difference.

What will prevent dirty seats is not just new fabric. Instead, it will take a concentration of human energy to overcome this, and other hard-to-solve organizational problems. Ultimately, BWIA could not solve the problem of either clean seats or job-saving profits.

Starting off on the right foot might save Caribbean Airlines, and Caribbean Start/LIAT, from continuing the sad legacies of the past.

*

Next Steps
~~~~~~~~~~
To discuss this topic further, visit our company blog and follow the 6-part series of entries starting with:
http://tinyurl.com/yjr458
We promise to respond to comments and discussion added.

A white paper called “Equal Shmequal. It’s Never a Merger of Equals” written by a former employee, Amie Devero, can be found among our white papers at www.downloads.fwconsulting.com. This short but brilliant article applies to every merger I have ever witnessed.

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CAP: Having a Powerful Dialogue

One of the results from the study that was not so surprising was data that we collected that showed that of the different elements of the acquisition communication plans, the most fruitful was the 2-way dialogue with employees. Interestingly, a similar international study done in mostly first world countries showed that this dialogue was much less important (some 25% less agreement as to its usefulness.)

In the absence of trusted information in these acquisitions, we observed that employees had a tremendous capacity to manufacture rumours that quickly became ““fact”” in the minds of a critical number of workers. The effectiveness of 2-way dialogues to correct rumours and address anxieties cannot be under-estimated, and at the same the risks are considerable.

The CEO of one of one firm’’s clients invited several small groups of employees to attend informal breakfasts, at which he invited them to “say anything”. People began to open up over time, until his irritation at their complaints began to grow, until one morning he retorted “Don’t you ever have anything good to say?” in response to one woman’s poignant observation. That was the final informal breakfast he conducted.

The risks of an authentic dialogue are considerable, which is why CEOs and other executives are notably reluctant to conduct them. They can get messy, and in an acquisition situation there is often considerable anxiety. This can get translated into feelings of anger and upset, and most CEO’’s are not well trained to deal with groups of people under these circumstances. This is especially true in acquisitions, when the acquiring executives are usually elated at their financial success in landing the deal, while the employees in the target company could not feel differently.

In the Caribbean, our observation has been that more often than not in public dialogues, CEOs devolve into a kind of parental role, while their employees display varying degrees of child-like behaviour. Dialogues can then become unproductive, looking more like monologues, as the CEO plays the role of someone who can remove the anxiety, when in fact he cannot –– it is inherent in the circumstances and in her people’’s reactions to it.

However, CEOs can be trained to conduct these dialogues effectively, through a combination of personal development (many have ego-issues that only become amplified in public settings) and video-based feedback.

At that point, the dialogues become transformational, and employees and CEOs become more connected than anyone thought possible. This can occur even when the CEO has no hard information to share, but is just able to face his/her employees concerns directly, listening carefully to what is being said and leaving his/her employees with an experience of “we’ve been heard.”

While these sessions can be conducted as Q&A’s, at some point a CEO can develop his skill to go further than just answer questions, which is the most basic level of public dialogue. He can actually take the role of leading difficult conversations that distinguish new principles that can be used to run the company at higher level. While there are very few CEOs that are this well trained, the few that I have worked with who are, consistently generate considerable loyalty and motivation by engaging openly and publicly with his/her employees.

In acquisitions, this skill is invaluable.


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CAP: Planning for a Culture

While it is clear that the Human Resource (HR) function was not used to help plan the acquisitions included in the study, the question still remains: what are some of the things HR would do, if asked?

One key action would be to lead the development of an “Acquisition Philosophy” by the deal team.

There are many approaches that can be taken to undertaking an acquisition. Usually, the company being taken over is at least an average performer, although the majority of the companies included in the study were either failing or had already failed.

Obviously, the acquiring company is making the investment or purchase with the belief that their ownership will make the critical difference in the performance of the company. If this belief were not true, then it is reasonable to assume that the acquisition would not take place. After all, even a successful company would not allow its shares to be taken over in an acquisition unless there was some premium paid. Acquisitions involve significant costs and risks, and no stock-holder in his right mind would undertake either unless he were being duly compensated.

Turning a mere stock-purchase into a successful acquisition, however, has much more to do with the way in which the culture of the acquisition is integrated than the price paid. Our research showed that within the companies we researched, there were widely differing views on the Acquisition Philosophy to be used.

The Acquisition Philosophy has to do with a decision as to what precise combination of vision, mission, values and leadership to bring to the new company to turn it into a financial success in the mid to long term. The Philosophy created has everything to do with a sound understanding of the culture that prevails in the target company, and what interventions need to be created to make it successful.

Different scenarios call for very different Philosophies.

For example:

Example 1: A company being acquired was a combination of entities that had formerly competed, and had all failed financially. The parent company decided to create a culture in the acquired company that was a modified version of the culture found in the parent’s company. The new firm was formed around the same values, vision and mission of the parent, with small changes to account for differences in national culture. The leadership came from the parent company.

Example 2: A very successful company was taken over to help expand the market share of the acquiring company. The Philosophy created was to keep the company intact, and to keep the ownership in the background as much as possible, hoping that the success would continue.

Example 3: A company did not know to create an Acquisition Philosophy, and did not address the new culture of the company and how it would effect integration, except to mention it in passing comments. The company fought fires as they came up in the form of strikes, poor results and a rotating door of successive of leaders, none of whom were groomed for the job.

In our research done in 2001-2, the companies studied came closer to Example 3 than any other. The lack of a coherent Philosophy left them vulnerable and without adequate plans for the many surprises that came once the acquisitions were completed. A complete Acquisition Philosophy may have included the following decisions:

  • Does the acquired company require a new culture, replete with new values, vision and mission that is new and distinct?
  • Or, should the new culture just be the same as the parent company?
  • Is there an intention to have local executive leadership? What will be done to develop it?
  • If a culture change is required, how will it be affected?
  • Will the new company be run by a local board or by the parent company? What are the lines of accountability?
  • Will profits be repatriated to the parent company / country?
  • Is the parent company willing to learn from the acquired company and change its culture accordingly?
  • What will be done (or not done) to send a message to the employees that the change is a positive one, and what is the plan for motivating them and communicating in a way that reduces rumour-driven anxiety?
  • What will be done to help the people in the acquired company bring closure to their past successes and failures?

While the above list may appear formidable, our experience in assisting companies in transforming their cultures tells us that it is more important that the company’s executives come to agreement. It is a fact that there will be surprises and unforeseen events that the executive team will need to react to, and their Acquisition Philosophy can be used to guide them in making the joint decisions that are required.

Doing a perfect job on all the above points is much less important, and cannot be done by anyone other than the players accountable for the acquisition being a success.

A set of Acquisition Values can be developed in conjunction with the deal team, and the implementation team to guide the way in which they acquisition activities are executed. For example, at one company the directors steadfastly denied rumours that an acquisition was being considered.

A week later, they announced that there was in fact an acquisition underway. Instantly, everyone knew that they had lied, yet the fact was never addressed openly. Of course, it was talked about quietly for years after the fact and used as evidence as to why the company’s leadership could not be trusted. A serious commitment to an Acquisition Value such as “transparency” may have guided the team to a different set of behaviours, or to at least a dialogue to resolve the public discrepancy.

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Using Video to See the Man in the Mirror

Recently, I committed to co-writing a chapter for publication on a technique my firm has been using to work with senior managers in one world-wide company, and also a well-known Caribbean conglomerate. The training technique is one that can be high-risk for the person leading the session, as it involves delivering live feedback in a public session and encouraging other participants to do the same. At the same time, participants have reported that they are able to give and receive more real-time feedback than they ever have before, and some actually demonstrate the new skills they have learned during the training.

As a precursor to writing my portion of the final paper, I thought I ‘d express my thoughts in this blog, as a way of saying a few things about how the process works.
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One of the principles used in our training is to make training as real as possible for those with whom we are intervening. “Making it real” entails doing as little “theorizing”as possible, and engendering as much truthful confrontation as possible, while directing the confrontation towards action-based commitments. In short, we provoke “Action, Not Ah Bag Ah Mout” in the hope that practice will make perfect, rather than further explanations and rationales.

The area that we focus on in this training is that of Critical Confrontations, and the specific training we have the most experience with is in training managers to engage in effective feedback conversations with their employees.

Most training in feedback involves at the least some mention of the principles on how to best frame the right words. These principles are reasonably well known, and there are several excellent texts that describe the “right” approach to use. In most of our training sessions with executives, the majority have been exposed to these ideas prior to the sessions themselves. Furthermore, most training has evolved to the point where each participant is given an opportunity to practice these principles, usually using generic examples.

In our work with Caribbean executives, we have adapted an approach that was first pioneered by a colleague of mine, Grady McGonagill, and perfected at several international companies. In this approach, the following process is followed.

The Training Process

Before the training starts, up to 10 customized cases are developed based on the client’s culture, needs and kind of business. Many are based on actual events, or issues that involve some emotional content.

  1. Participants are divided into groups of 4-6 for training periods of 5-7 hours each
  2. Cases are selected depending on the group being trained
  3. A curriculum is developed to address the training needs, focusing on demonstrable behaviours rather than vague nostrums (such as “be positive”)
  4. At the start of the training itself, the theoretical principles of good feedback are shared
  5. Dyads are formed to give each participant an opportunity to play the role of Manager and Subordinate, and the Manager is given the choice of cases to work on
  6. Managers and Subordinates are given written one-page scenarios that describe the case and their role in the situation
  7. A 5-10 minute interaction between the Manager and Subordinate is video-taped without interruption
  8. The tape is reviewed by the group, and stopped frequently to give the group an opportunity to coach the Manager on his/her “performance”
  9. The Subordinate provides direct evidence of the experience
  10. The group looks for opportunities to deepen the theoretical principles of good feedback
  11. The group continues until every member has had an opportunity to play the role of Manager and Subordinate

New Elements

The following training elements are included in this training that are normally not included in this kind of training:

  • cases built on real-life issues
  • giving public feedback in real-time from the participants and the facilitator, using the principles bring learned
  • using a recorded video-tape as an impartial and factual basis for feedback (rather than memory)
  • asking the Subordinate to share their emotional state at different points
  • using recorded behaviour to “prove” that the principles work, demonstrate how difficult they are to use effectively, and to refine the group’s understanding
  • offering multiple opportunities for trainees to use the coaching being given on the spot in a repeat “performance”

These elements are quite difficult to incorporate effectively and precisely, as the facilitator must be seamlessly competent in a variety of disciplines, not the least of which is the ability to operate and trouble-shoot video-recording equipment.

Results
The public goals of the workshop are quite modest, yet it regularly accomplishes much more than advertised. Trainees are often able to demonstrate a solid progression of increasingly skilled behaviours during the few hours of the training, and are able to receive and use the coaching given from the group to make immediate changes. The knowledge that they increase their effectiveness that quickly in a difficult area some focused practice and coaching is one of the tremendous benefits, even for observers of the process. Anyone can improve, given the right conditions in which to do so.