The Culture Grinder in Mergers and Acquisitions

I recently posted a blog entry discussing the concept of the Culture Grinder, our term for organizations that attempt to drive strategies that are in conflict with the culture despite countless examples of how this just doesn’t work. Having recently supported a client with a culture integration of a recently acquisition it reminded me of how the Grinder can rear it’s ugly head no matter what the strategy.

In this case it was a growth strategy through acquisition. The purchasing company sought to expand its reach and to expand its service offerings with current clients by acquiring a small organization that had expertise in a particular area. The strategy was sound and people approached the situation from a positive perspective of mutual gain through working together.

Through facilitated conversations with the senior leaders of both the acquiring and the acquired company, we were able to make explicit the underlying values and “keystone habits” of each organization. By doing this, the team was able to discuss the role of culture as an enabler or detractor in their collection ability to drive the strategy that they envisioned. Continued dialogue helped the leadership team identify areas in which the culture of the integrated organization may need to evolve in order to reduce risk and increase the likelihood of continued success and growth.

Only time will tell.

The Culture Grinder

Peter Drucker, one of the most respected authorities on the topic of leadership, has been noted with coining the phrase, “culture eats strategy for lunch”. This saying permeates any discussion about organizational culture, but many leaders fail to realize the true reality that this statement has in day-to-day life.

We call it “The Grinder”. Over the years, we have worked with clients around the world who struggle to understand why they can’t seem able to actually execute their business strategy. For most, it’s not that their strategies are weak or ill-conceived; quite the opposite. Many have done thorough business analyses, engaged high-profile strategy consultants, and developed powerful strategies that detail out how the organization needs to evolve in order to achieve future success.

Unfortunately, when it comes to actually rallying the troops in order to implement the plan, oftentimes, things fall short. Sometimes they fall way short. I am reminded of the countless times I have walked into a client’s office to see binders full of gorgeous, well thought through strategies that never even made it off the bookshelf.

Even if leaders are able to effectively align around a well thought out strategy and they are able to clearly articulate it to employees at all levels, getting people to behave differently becomes the Achilles’ heel. When this happens, a sense of cynicism can develop, only making it that much more difficult to drive strategic change in the future.

But what’s at the core of this regrettable situation? If Drucker’s saying bears weight, then we might come to see that the culture that has developed over the lifespan of the organization may be reinforcing certain attitudes and behaviors that are in conflict with those that would be required to ensure successful execution of the strategy. If leaders do not realize this, or worse yet, make the conscious decision to downplay the role of culture on performance, they may find themselves being chewed up and spit out of the Culture Grinder.

Mayer’s Call to Office

Last Friday Yahoo’s CEO, Marissa Mayer, released a controversial memo to the employees at Yahoo telling remote workers that they had until June to begin working from a Yahoo office or quit. The memo sent by Yahoo’s head of HR Jackie Reses said that, “to become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices.”

Since the announcement, there have been quite a few people weighing in on the salience of Ms. Mayer’s decision. Some feel that this is the right move as it is the only way to truly enhance communication and build a “winning team”. Others disagree, arguing that this mandate will reduce productivity, destroy morale, and otherwise spell disaster for the already struggling tech company.

Culture Matters – How Yahoo Does Work

Whatever your take on the recent happenings at Yahoo, I think we can all agree that there are some serious underlying values and assumptions at play here regarding how work should be done. This most recent corporate play calls attention to the basic core beliefs about how work ‘should’ be done at Yahoo according to Mayer. Let’s dig a little deeper into those assumptions, which will inevitably shift the culture of the organization at its most foundational level.

The assumption: for people to perform effectively, they must physically co-located at all times. The deeper belief: people can not be trusted to do the right thing and to perform at their best unless someone is standing over their shoulder. The yet deeper belief: management of people who can’t be trusted to work effectively from home is the way to turn around a company.

Treating the Symptom

We must ask ourselves if the root issue is that employees are not productive when working remotely or if managers are not effectively managing their people? At the end of the day, the lack of trust and lack of effective management is not going to be solved by having people work side-by-side in an office. There are many examples of organizations that have learned to effectively leverage technology to run highly successful businesses with remote workforces…and they’re not tech companies like Yahoo. In today’s fast-paced, global economy, for tech companies to devolve back to this type of “in residence” model seems a bit antiquated and, possibly, a panicked attempt to solve for a symptom rather than the problem at hand.