Mergers, acquisitions, and changes in business model can all require changes in a business’s culture. Here are strategies for successfully blending and changing culture and getting employees to buy into the changes.
Culture is a hugely important subject and is often ignored by business owners, sometimes out of ignorance of what it really means, sometimes because they don’t have their own culture, and sometimes because it is too complicated to explain. But when you realize that 80% of acquisitions and/or mergers fail because two disparate cultures are not integrated properly you can see what a massive issue this is.
So, what is Culture? I define it simply as “The Way We Do Things Around Here.” In other words, if you want to work for my company you have to adopt my culture which means your behavior has to be aligned to my business goals. But to achieve this I need to create a culture that people want to align to. I need to create the values that most people can identify with. I have to create a vision that my team can all sign up to.
In my book Raise the Bar, Change the Game I talk about my life in the bar code industry and how I penetrated the market in Eastern Europe just before the end of the Cold War with the Communist Bloc when the Berlin Wall fell in 1989. The Communist era consisted of a command economy where quotas of production were assigned by the State to factories who made what they were told at a price that customers had to buy at. There was no such word as “sell” or “management.” The culture was one of not having to think or make a decision because the State did it all for you.
After several trips to this Bloc, I established contacts with people in whom I spotted entrepreneurial skills and took them out of their state-run companies and set up joint ventures with them. I gave them shares, money to start the business, and working capital, and taught them best business practices from the West. I had to change their culture to adapt to the western way of doing business. The first culture change for them was they got to TRUST me as I gave them OWNERSHIP of their business.
Then I created an environment where they were encouraged to have their own ideas which I would listen to and often adopt. This created a culture of INNOVATION and EXCELLENCE as I allowed them to try out their ideas and if they went wrong that was fine. They would pick themselves up and try again. This was a culture where there was no FEAR OF FAILURE and so innovation was born. I taught them to delegate which led to a culture of EMPOWERMENT where staff members felt they could make a difference which encouraged them to go the extra mile for our customers.
I learned a great deal about the importance of culture in the early days where I had two main suppliers both headquartered in Chicago. On a visit over there they both invited me to dinner on two separate occasions. At dinner the one supplier spent most of the evening telling me about how successful they were and focussed on their target numbers whereas the other supplier spent most of the evening asking me about my business, how I did things and were also interested in my family.
Now both cultures worked as they were both billion dollar companies so I took the best from each and focussed my business on target numbers but also became more empathetic with my team ensuring they were happy in their work and would find me approachable if they had any issues.
There is also a term “culture shock” best illustrated when I had a visit from my Czech partner and we were driving together to visit a customer. We were discussing if he had any contacts in Moscow and he said he had. I asked him if he had their phone number which he did. So, I said let’s give him a call now and proceeded to get out my car phone ready to dial. He couldn’t believe his eyes as mobile phones had not been heard of over there in the 1990s!
To me the most important part of assessing any person for a job is to make sure they are likely to fit into my culture. Too often this is ignored in the interview process when the interviewer tends to focus on the applicant’s CV or resumé. If the applicant is fortunate enough to get past a limp handshake and into the interview proper, he/she will most probably be questioned on past jobs based on the CV which is 80% lies anyway. To me a third of questions should be on past performance, a third on qualifications for the job and a third on culture.
The biggest culture change I had in my organization was when we moved from selling hardware with low margins to selling solutions which had software and services as part of the total deal. This needed a different selling approach – more of a consultative nature – and so needed different skills from the salesperson. Not many of them could adapt to this new methodology and were either let go or moved to another department. In fact, the whole company needed a culture change having to focus on solutions not product. The word “product” has been banned!
In summary, put culture at the top of your priority list when starting, running or buying a business. It can make or break you. Create the right work environment and eliminate peer pressure on your staff to behave differently than your culture dictates. You will be amazed how aligning their behavior with your goals will transform your business!
Brian Marcel is the founder and Chairman of International Bar Code System (IBCS) Group, known for bringing the game-changing barcode technology to a part of the world in desperate need for change. Since its start in 1988, he has built the IBCS Group into the top enterprise mobility integrator in Central and Eastern Europe. His debut book, Raise the Bar, Change the Game: A Success Primer for Budding Entrepreneurs who Want to Change the World, is available on Amazon.