One of the issues that comes up time and time again, as I a cultural analysis on organizations, is the question of whether this area of the organization is important to consider, and if we do consider it, how can we change it anyway? My answer to the first question is definitive yes! Change initiatives, mergers and acquisitions, implementing strategic plans, to name just a few, rise and fall based on how the leaders have understood and prepared the organization(s) culture for the new direction. One example illustrates how crucial this part of the organization is to change. I was working with a very successful non-profit a few years ago, who were considering an acquisition of another organization to help widen their impact in the vertical market they were pursuing being the market leader. Many rationales were given for the strategic fit of this organization under the umbrella of the expanded, corporate presence of the organization. To name a few; a great upside revenue base for the company I was working for because of the marketing exposure from this acquisition, positioning the acquiring organization as the dominate player in their space, greatly expanding the offerings to existing customers who would purchase more from this organization, synergy between differing capabilities, etc. As the Board of Directors pondered the decision, I asked multiple times if I could go and assess the cultures of both organizations to see if it there was truly a common set of values and “the way each company gets things done” in their organizations. Unfortunately, I was not granted that access. A few years later now, the acquisition has cost the organization way more than the original ticket price which was a fire auction. Many culture issues have come up, and hindered the integration of these organizations which have not turned a profit as of yet. The CFO later pulled me aside and said:”you were right” about looking at the fit between the two organizations.
The culture of an organization is like the blood stream in the human body. It’s partially made up of values, partially processes, partly relationships, etc., but it permeates every part of the organization, supplying sustenance and life blood to all involved. The crazy dichotomy that Booz Allen found in their recent report on Culture in organizations is the difference between what executive leaders think about the importance of culture in contrast to how the employee’s do. Fifty three percent (53%) of executives surveyed indicated that organizational culture was important whereas eighty four percent (84%) of the employee’s did. In fact, 65% felt culture was more important than the strategy or the business model!
When you introduce change of any kind, the research shows that you must understand the culture of the organization and work with, or augment the best in the culture to be your ally, actually accelerator of the changes that the leadership would like to implement. Speaking in our metaphor, it’s the same as making sure you put type “A” blood into a type “A” host. Otherwise, the resistant antibodies that will be released in the blood stream of the culture of the organization will all but guarantee a graft /host rejection of the change you’re trying to spread throughout the corporate culture. When this applied to mergers and acquisitions, the research is more dramatic. Even if you are the acquiring organization, the process of acquisition must actually create a totally new culture for both organizations, where norms, values, ways of doing things can be crafted with both sets of employee’s involved so that neither is resisting the other’s organization. Again, using our analogy, a merger or acquisition without this culture work done before and during the process is like merging the blood streams together of both organizations, where the antibody reactions spike exponentially. In other words, corporate culture is not a soft issue at all. Let me ask for your input. What has been your experience with the power and influence of the culture of an organization? When change has been introduced, has there been careful attention to the integration and implementation of these changes by the executives?