Agents2Change - Smart Business Thinking

Examining Culture #7 - And finally! Building a Cultural Map

In this mini-series, we have looked at the challenges of managing across a diverse range of geographic and cultural boundaries. We have taken a look at the theories on national culture and organisational culture.  In this, our final instalment, we explain our approach to developing a cultural map in organisations.

The major growth strategy for multi-nationals has been heavily reliant on Mergers & Acquisitions  in recent years.  These have often been in key markets and geographic locations; for example there has been significant increase in Eastern Europe and South and Central America.  This brings access to new and growing markets for companies who have plateaued in their home countries, but it also brings cultural challenges in how best to integrate and align these target companies into the established corporate culture. 

The reason that integration and value creation is so difficult in the post-merger organisation is multi-fold.  Many reports and research papers conclude that the reasons for poor results are often down to poorly targeted acquisitions, unclear goals, unrealistic valuation of the target company and more often than not, an incompatible company culture. 

However culture is not an indefinable or unchangeable concept.  On the contrary, it can be defined, measured and with concerted effort, changed.  To do that, requires accurate diagnosis and practical ideas on how to address cultural needs.

Our View of Culture

Over the years, the Agents2change team have been brought in to address many issues around performance, improvement and integration in some of the world’s biggest companies.  Our combined expertise spans over 90 years of organisational change and understanding the key levers towards integration.  Indeed our founder, Mary McGuire has undertaken extensive research in the area of multi-cultural management at Masters level and is linked with a number of business schools. 

We apply our knowledge and understanding of the most  influential models and theorists on culture (from Hofstede to Schein) and have developed our own unique Cultural mapping model.  We take the view that there are certain cultural ‘flags’ that allow us to interpret, measure and intervene in culture to achieve integration. 

A central premise of our model, is the view that integration must come from a shared understanding of the direction and goals of the organisation.  This is impacted by a number of areas, including how motivated people feel, how equipped they are to do their job (knowledge) and whether they believe this is a company that they want to be associated with (commitment).

Building A Cultural Map

We have developed an exclusive internet survey that allows for the collation of data from small or large populations.  The survey takes only 15 minutes to complete and has the advantage of being customisable for an organisation’s own requirements.  Using sophisticated survey design, which allows for a mixture of response types, the questionnaire is intuitive to use and eminently user-friendly, as reflected in the very good completion rates we typically achieve.

What we deliver is understandable management reports, split by function or country and giving a thorough analysis and explanation of what the data is saying.  We also supply recommendations, based on our experience of what makes change stick and how to make it happen in geographically spread organisations. 

Cultural mapping can be done for any size of organisation to suit any budget.  We can do a small review for a team of 20 staff, or provide a global review covering several thousand staff in multiple languages.  Our approach is completely flexible and designed around your needs.  If you feel you could benefit from this service, contact Mary McGuire: mary@agents2change.com, for a confidential, no obligation discussion.

What experiences have you had with cross cultural conflicts?  Does this model help explain the reasons for those conflicts?  Please share your thoughts or experiences on cross cultural management here, or email us if you would like to find out more about our work in this area at feedback@agents2change.com

Multi-Cultural Management and Its Challenges – Introduction

In this mini-series, we will look at the challenges of managing across a diverse range of geographic and cultural boundaries.

We will revisit the writings of the key writers on Culture – Hofstede, Trompenaars and Hall and we will also look at some up to the minute examples of multi-cultural management challenges faced by some of the world’s biggest companies.

But first, let’s set the scene.  A Spanish technology group has recently acquired a British IT company operating in a similar area.  They both operate in the same market and offer similar technology, yet every attempt to merge, integrate or transform their processes to a common approach is failing.  It is not that they don’t see the benefits of the changes, or even of working together more closely; yet any percieved attempt by one side to impose a process on the other is contentious.  Sound familiar?  Well this type of situation occurs in over 80% of post-merger organisations.

Often what is interpreted as resistance to change is based in a mis-understanding of culture and cultural needs of the legacy teams and organisation.  Even in this example, if we look at some of the cultural markers defined by Hall's definiton of High and Low Context cultures, we find that Spain would fall more into high context cultures, meaning that more is interpreted from the wider reference points of non-verbal, historical and social expectations, creating a much smaller dependence on and trust in written communication.  Britain, by contrast, falls into the low context cultures, which means that explicit forms of communication are preferred and expected and less value is placed on non-verbal or subliminal messages.  Whereas one country would put much more store in face-to-face meetings to reach agreement, the other would not want to act without clear written agreements.

Over the next few weeks we will take you on a cultural journey, exploring what continues to be the issues faced by modern management in multi-national organisations and what we can learn from the extensive body of knowledge that is already out there to help us navigate this tricky landscape.

Do you have any experience of multi-cultural management you would like to share?  Or would you like to have a more detailed discussion on how we support multi-cultural management?  Please feel free to leave your comments here.  Or contact us at feedback@agents2change.com.

Corporate & Functions # 2 – Quality of Leadership within & across Functions

In this mini-series we are looking at the role and value that functions can play in supporting large global corporations.  The first of our five areas is Leadership within Functions. 

There are many reasons why leadership is, or is perceived as poorer within the functions rather than in the line.  Sometimes it is about the culture of the organisation.  If the business / segment are encouraged to be independent and autonomous, then Functions can sometimes play second fiddle.  This has the result of undermining the confidence & leadership of the Functions.  Similarly, if the pendulum has swung too much towards the Functions – which is a phenomenon frequently experienced after a lot of merger & acquisition activity - the rush to consolidate to one business identity and creating a ‘one size fits all’ solution can lead to poorly thought out services or policies that are not fit for purpose in the various business environments. 

In both these situations the functional leadership has a critical (& somewhat overlooked) role.  Too often the organisation in its frustration can either parachute in excellent business (line) managers who have a reputation for turnaround situations in the field, but with very little technical understanding of the functions role.  Leaders parachuted in in this way can feel overwhelmed in a new and very different environment and in some situations feel overlooked by the organisation.  Additionally the lack of technical skill can result in poorly thought out or mis-aligned interventions for the businesses.  In one Supermajor oil company a business leader was parachuted in to run the HR function with disastrous results, by oversimplifying the model and the HR offer and increasing frustration felt by the business. 

The other extreme is the Group CEO in his or her frustration hires in a technical expert with a strong track record to oversee the function/ functions without the history of the organisation’s culture, the danger is that in their rush to make an impact, the business can feel browbeaten into accepting changes that seem out of synch with the way that ‘things are done around here’. 

Neither is a good outcome and the ideal middle ground between the two; a leader who understands the technical requirements of the function, whilst still being highly attuned to the needs of the business – which may indeed be quite diverse and even contradictory.  Their confidence as a leader needs to be balanced with their appreciation of their role ‘in service’ of the business.   It requires a finely tuned ego that can switch between leadership and followership as the situation requires.   

In our next instalment we will look at role clarity.  If you have experiences you wish to share, please comment here or contact us at feedback@agents2change.com

The Cult of Chief Executive (or how the founder-CEO can steal the limelight)

Anyone watching the news recently cannot have failed to have seen the strong reactions to the news of Steve Jobs medical leave from Apple.  The reaction, both in terms of stock price and media speculation shows how strongly the Brand is coupled with Steve Jobs in people’s minds.

On one hand this is good, because it makes the company more personable and identifiable to its customers.  Steve has capitalized on this by always being at the front and centre of each new product launch.  The downside is that the company appears to live and die by the strength of one leader.  That creates a hugely leveraged brand identity,  that can suddenly change if that leader unexpectedly disappears from view. 

We have spoken before on the issues of a maverick leader and their impact on the banking sector.  For technology and innovation firms such as Apple and Microsoft the danger is how to reassure investors and customers that the company has developed beyond the vision and skills of the original founder.

Valuing successors and developing talent within an organisation may not be the top priority for these hugely successful founders, but as people like Richard Branson has proven, it is only by surrounding yourself with talented and credible leaders can you expand a brand beyond one core concept or one individual.  We know however, that the succession from a Founder CEO can be notoriously difficult. 

“Past research has also indicated that Founder-CEO succession maybe the most critical succession event in the life of most firms”  Wasserman.

Companies wishing to avoid the Apple trap need to consider:

• How is the limelight shared between the leader and his immediate team?  Having only one shining star undersells the value of the team;
• How robust and transparent are your succession plans?  This is particularly important in the top 3 tiers of your organisation where much of the external interface occurs.  It is important to signal successors early and get them ready and in position before the handover date.  That way the transition is as smooth as possible and does not allow the market or major shareholders to get nervous about the organisation’s future.
• How are roles & accountabilities re-drawn based on the successor’s accession?  Many companies fail to review and re-draw the line of accountability following a transition, yet without this review, out-dated lines of reporting or priorities can still be applied, sometimes to the detriment of the new leader.  It is important to consider the transition not merely from the perspective of one key change, but as an opportunity to re-draw the executive landscape and set new boundaries and expectations for all.

Got a comment?  Please share it here or email us on feedback@agents2change.com

Book review: 'Blink' by Malcolm Gladwell and what it tells us about decision making in business

“Truly successful decision making relies on a balance between deliberate and instinctive thinking” this is the key message from Gladwell.  He also tells us that “In good decision making, frugality matters”, that is, there is not an equal relationship with the quality of decisions and the amount of data that is analysed to support decisions.  In fact too much data is likely to lead to poorer decisions.  Blink is about explaining why good decision making is when training and expertise work in harmony.    

We all jump to quick conclusions at times.  Sometimes they prove prophetic and sometimes disastrous.  This book looks at deciphering the good and bad instincts that happen in that blink moment.  Our brain is a powerful computer that has the ability to collate and decode information at lightning speed.  The part that we can readily access – the consciousness, requires time to logically order and understand information.  The part which is less accessible – the sub-consciousness is able to draw conclusions from very limited data points (Thin Slicing as Gladwell calls it).  The difficulty is that the two can work in parallel, but do not communicate with each other, leading to a conflict between instinctive responses and rational analysis.  Building a bridge between these two cognitive power houses can give us extraordinary decision making ability. 

Our unconscious reactions however, come out of a locked room, and we can’t look inside that room.  But with experience we can become expert at using our behaviour and our training to interpret what lies behind our snap judgments and first impressions.  Thin Slicing happens automatically and unconsciously, allowing us to read deeply into the narrowest slivers of experience and reacting in milliseconds.  In business we often view instinct and gut reaction as a bad thing.  But through his re-telling of the biggest war game ever staged, Gladwell reminds us that the propensity for data driven decision-making may be a trap.   

In 2002 the US launched the Millennium Challenge the biggest war game ever staged, to provide important lessons for an impending conflict in the gulf.  The premise was that sophisticated modelling and IT programs could provide unprecedented levels of information to commanders, thereby greatly enhancing their position over their enemies.   Data can give us the illusion of being in control and having valuable knowledge, but we have to remember that data is almost always expired by the time we see it.  If we are working in predictable situations this may not be a major issue, but if we have unpredictable and unknown situations, it can give us the false impression of being in control, when in fact all we know is what has already occurred, not what is going to occur.   War is a prime example of this.  In Millennium challenge the commander of the opposing force, General Van Riper understood this and viewed war as managing chaos; ‘you have to be in command and out of control’ he said.  You trust in your guys to know the overall direction and to use their initiative to respond to the situation based on their knowledge on the ground.   His approach resulted in a humiliating defeat for the US forces which would have totalled over 20,000 dead and dozens of warships sunk if it had been a real conflict situation.  Given that the Pentagon had invested several billions in the technology and several millions in staging the war game, accepting defeat was not seen as an option.  The lost battleships were reinstated, the enemy attacks discounted and the whole thing was staged again, but this time the cards stacked in the US favour with serious restrictions on General Van Riper’s ability as the enemy to respond.  Second time around the US forces defeated the opposition and went confidently into a Gulf Conflict with that victory ringing in their ears.  And the rest as they say is history. 

Managers can get drawn into the myth that the more information they have the more they will understand what’s going on in their business.  Yet spending hours in meetings trawling through reams and reams of data rarely gives the whole picture of what is really happening and where the key leverage points may be found.  Good decision making relies on a balance between data driven and instinctive behaviour, between analytical and instinctive thinking.  It’s not that one is superior to the other, but that each has their place. 

Relying too heavily on instincts can equally lead to false conclusions based on prejudice, primed reactions or intense stress.  At these times, inferior decisions can lead to poor outcomes.  The difficulty is that this can be so deeply rooted in our sub conscious that we may not know the impact it is having on our judgement.  One way of understanding how this affect might be occuring is to take the Implicit Association Test which illustrates how strongly connections can impact on our judgements – e.g. assuming that white is good and black is bad.

For Business Leaders, Blink provides a welcome reminder of how important it is to blend instinct and rational analysis in your decision making.  Neither on its own can deliver good decisions, but neither too can the exclusion of one from the other.  Feeling comfortable listening to your instinct takes time, experience and knowledge, but it can prove the difference between average and exceptional decision-making. 

What are your experiences of decision making with limited data? How much do you or your organisation value instinct in decision making?  We’d love to hear your comments, so please do post them here or email us on:  feedback@agents2change.com.

 

The destructive power of .. politics .. in organisations

As change agents, we often face considerable obstacles when working with organisations embarking on major transformation journeys.  Resistance is one of the key themes that we expect and are brought in to overcome and this can manifest itself in many ways. 

 

One of the most destructive manifestations of resistance is politics.  This is a phenomenom that can occur in any organisation, but is particularly common where competitiveness is part of the DNA of the company, or where the organisation is made up of a series of smaller entities (often acquired through mergers & acquisitions) that have never been fully integrated into one corporate unit.

 

The consequences of letting politics get in the way of business is that the quality of decision making and team working is continually undermined.  In a finance group, for example, decisions regarding the upgrade of their  IT infrastructure ended up being expensive and poorly targeted because an executive refused to accept advice and recommendations from a peer that he did not like.  In a manufacturing company that had failed to integrate its various sites, decisions were made on the best interests of the site rather than the company, leading to expensive and inappropriate investments.

 

Overcoming politics and political game playing in organisations is also not easy.  Much of it relies on the leader or leaders setting out expectations and having a zero tolerance approach to parochialism.

 

Some top tips to overcome it in your organisation include:

 

• Establishing peer review teams at divisional head level to share best practice and bring transparency and accountability to the fore.
• Building targets around collaboration and joint working into Executives’ performance contracts.
• Using 360 degree processes from Board level down, to inculcate a feedback rich culture

 

If you have experiences of the destructive power of politics, please do share them here, or email us on feedback@agents2change.com.

Cut the crap - prioritize! (rule #4 of 10) - The rules of management

Continuing our series, we share our top 10 rules from Richard Templar’s book:  The Rules of Management.   Rule #4 is about prioritizing.  Templar is unequivocal about this; “When all is said and done, Money is what our work is about.  No money, no business.  No business, no job.  Cut the crap and dedicate yourself to one thing and one thing only – the bottom line … that’s what separates a really sharp manager from all others”

It is a strong message, but not an unreasonable one.  Too many times, managers dedicate large amounts of their time in pleasing others, or to pet projects which don't deliver anything in real benefits to the bottom line.  Our job as employees and managers is to add value to an organisation.  By that, we mean that the company has made more money by employing us than it would have lost without us.  Sometimes in the functional roles and matrixed organisations of modern day companies it is hard to see where that value lies.  If this feels like the case for you, then perhaps your first priority is working out exactly where that value is and then making sure that this is on the top of your list each and every day.

Recession Trends, or what happens when the going gets tough

During this recession there have been many surveys reporting on how it has affected our daily lives.  One of the most frequent that is reported is how our buying habits have changed.  Some rather interesting trends emerge:

On the Increase

On the decrease

Supermarket branded food – instead of the more expensive branded counterparts; Vodka – sales sour as wine & champagne takes a nosedive Pyjamas – Increase sales in internet and stores; Root vegetables such as turnips as we return to more basic home cooking Afternoon Tea – increased sales over last year as more families (due to redundancy) have time and need a cheap going out option

Birthday Cards – as the UK cardmaker Clinton amassed large debts, people made their own or opted for e-cards; Book buying – Waterstones saw a drop in sales whilst municipal libraries saw an increase in memberships; Antiques – getting cash out of the attic is on increase as ebay reported a 200% increase in family valuables; Coffee – Fancy coffee bars are losing favour as Starbucks report a 77% quarterly profit drop and UK chain Coffee Republic folded this year

What has been widely reported is the sweeping changes that we see in human behaviour when there is a real or perceived risk to income and lifestyle.  Whether through actual changes such as redundancy or the fear of it that has changed buying patterns, it’s clear that the environment and our perception of it fundamentally alters our decision making process.

More basic, simpler and affordable pleasures are sought, whilst the more exclusive or hedonistic options appear to be shunned.  Retail and particularly supermarkets have been very quick to pick up on this trend by introducing such ranges as ‘back to basics’.

As well as the monetary changes, psychologically the nation is looking for comfort rather than opulence.  The increase in pyjamas sales for instance suggest that it is about returning to a time when we felt more secure  (often childhood or early-adulthood) to help us to feel better about our relatively insecurity now.  Again advertisers are quick to realise this, hence the increase in the re-release of retro adverts for household names such as Heinz.

 

Businesses also have to respond to the recession and its potential threat to them by following some of the same rules; prioritise ruthlessly, spend wisely and cut out unnecessary waste.  What is less helpful for business owners and leaders is to also follow the trend for ‘nesting’ and looking for retro-comfort.  What every previous recession tells us about the business survivors is that they looked after their core business sharply, whilst also looking for opportunities for bold-mover status.  They could do this by believing that their long-term survival was linked to innovation and growth regardless of whether the current circumstances suggest otherwise.

 

For businesses to survive a recession they need to understand the mood of the nation, manage their own processes and costs very well, but maintain focused on their long term survival by constantly looking to the horizon for inspiration.  Getting caught up in the doom and gloom of the scare-mongers and allowing this to make their decisions less bold, will only steer them off course in the long run.  History for certain tells us this.

Workforce Capability – Joining the dots …

 How good is your organisation at anticipating, developing and meeting the development needs of your workforce?  Many companies seem to struggle with this, but the reasons why are often multi-faceted.

The issue, which for one of our current clients is very live, is how best to offer a broad range of training and development to meet current needs, whilst also understanding, planning and pre-empting the future needs of the workforce; those areas that help to provide a vibrant talent management and succession planning process to enable future leaders to be home-grown.

Who Owns the Agenda?

Too often organisations delegate the responsibility of workforce capability to HR, reducing the whole process to training delivery.  Whilst an essential component this is not the beginning or the end, but merely one component.

Organisations need to grow the workforce at the same speed (or even faster) than the companies growth.  This requires a great deal of 20:20 vision, as well as good hindsight into past successes.    Getting this right involves the integration of strategy; capability and individual needs, something that cannot be done by delegating the responsibility to one department.  We call this the golden triangle of capability:

Successful companies (GE, Pepsi, Virgin, for example) have learnt to bring the capability agenda into the heart of the leadership conversation.  Only by placing the development and progression in the context of the strategy of the organisation can we be confident that the investment will bring the returns that we are seeking.

Seeing isn’t always believing! – how we can stubbornly refuse to take in data to support decision making

Some recent Massachusetts Insititue of Technology (MIT)researched posed the question, why do we not pick up on the signals of impeding disaster or meltdown in a system?  The ‘Weak’ Signals as they call them are ignored.  Of course with hindsight, it all seems rather obvious, but it is seeing them ahead of time that proves far more challenging.

 

They cite a number of traps:

 

Objectivity Undermined:

Our filtering system is pre-programmed with what we know and understand, leading us to hold certain biases in how we view and analyse new information.  This can lead us to close down options quickly and become over-confident about our particular view.

 

Filtering to fit our world view

All information passes through filters both cognitive and emotional, hence one person might lead to a different set of conclusions to another.  But it also leads to ‘rationalisation’, whereby information that fits with past understandings is incorporated into generalised internal representations (mental models or beliefs). Information that does not fit with these generalisations is automatically either distorted to fit or deleted by sensory filters.  A famous historical example is the natives of the pacific islands not being able to ‘see’ the colonial ships arrive, because they simply did not fit their world view, only being able to register ripples on the water.  More recently, the Increase is the use of derivatives in the last decade and an increasingly risky portfolio approach, leading to the financial meltdown shows that such misconception can happen on a global scale.  The weak signals were simply ignored.

 

Bolstering

Once we are set on a course of action, we can then act out a confirmation bias, by actively pursing evidence and people that support our view, rather than opening up discussions about alternative perspectives.

 

The article concludes which some sound business advice:

“The individual and organizational biases discussed above underscore why it is important to bring together different perspectives on the same issue”. 

Without such a mature approach to all business decision making we will see many corporate disasters like those of recent months like Northern Rock, Lehman Brothers  etc.  Facing up to the weak signals as they arise, although painful could save considerable trauma further down the line.