Mergers, takeovers, acquisitions, restructures. How strong is Organisational Culture and what is the effect of it in terms of major change – as in a merger? Why is it that nit-picking in one organisation is treated as strategic detail in another?
Change is such a sensitive subject. It’s a bit like airing your dirty laundry – clients don’t get upset if you mention that change has occurred inside their organisation, but if you start talking about the challenges and problems experienced, well, some people get decidedly uncomfortable. I can understand that. I probably would too – and I would want some control over what was said. Unfortunately that kind of puts constraints upon the story to the point where the value of it may be lost.
I say all this because I want to talk about actual challenges within organisations during times of great change, stuff that I have either been part of as a team member, or witnessed as a consultant, and you may wonder why I’m being ‘all coy’ about the identity of the organisations concerned. Forgive me. Confidentiality is a big part of who we are. Therefore if I do mention an organisation by name in this article you can be sure I’m not talking about actual clients – I’m just using them for illustration.
I’m particularly interested in the effect of major change on the ‘cultural ambience’ of an organisation (a better description of what I mean escapes me as I write, so I’ve invented that expression). When one has worked in an organisation for a period of years, it’s almost as if the organisation – by that I mean the people, the buildings, the décor, the policies and the attitudes reflected in certain behaviours – has a ‘personality’ all of its own. People who go there from leaving school absorb this ambience much like a sponge, and knowing no other, believe it to be the one true ambience. All other ambiences are less worthy, suspect and possibly even threatening. The longer a person has been immersed in this ambience, the more they will become part of it. Witness the 80’s TV series ‘Gliding On’, which portrayed life in the Public Service at that time and portrayed it so well that ‘Gliding On’ became a descriptor of any organisation displaying characteristics of lethargy, slowness, casualness and preserving the status quo at all costs. Some public servants watching that series would have wondered where the humour was – to them it was a realistic portrayal of how things should be – knowing no other reality. Contrast that with a particular Sales Division of a major insurance group in Auckland, where one important entry criteria to that group is that a potential applicant must already be earning in excess of $90,000pa after tax before s/he will be interviewed for a position on that team, and the group meets every morning at 7.30am to report on yesterday’s successes or failures, and to affirm their objectives for the coming day and ask for whatever help they need.
The interesting case study would be to combine staff from a Gliding On type organisation with the team from the insurance company using the Gliding On people as support staff… Do you think there might be a wee bit of conflict? Look at the ‘culture’ of each organisation. Are they compatible? Could you train the Gliding On team to ‘have a sense of urgency’, or could you train the Insurance team to be more accepting, and that ‘Manyana’ is OK? Would you want to?
Examples I’ve seen of cultural clash during change, range from the small to the large. If you were to merge Tower Insurance with AMP you can be forgiven for expecting an easier time of it than if you asked AMP to take over WINZ. Yet they are both concerned with ‘protection’ and both use money to do it. The Unemployment Benefit is an Insurance Policy, the premium for which is collected from all of us by IRD, yes? So how come we can’t just merge them and expect them both to get on with it? Look at the cultures. People don’t make a career with WINZ in pursuit of a high salary, or financial freedom, or independence at work, or to make others significantly financially better off. People at WINZ do not compete with other organisations aggressively targeting the same potential client base. Whatever ‘sense of urgency’ exists, is centred around a totally different set of values, which themselves exist in a totally different culture. It still stuns me that people get upset if the Bushells coffee might be replaced one day by Greggs (or the reverse!). Is this really the most important thing in life? To some people, yes it is. Small things or large things appear to contribute equally to the ambience. In one (actual) instance staff worked extra hours without pay for nearly a month during a crisis and did so without complaint, yet later when the water cooler was moved to another floor these same staff threatened to strike. Look what happened when NZ Rail removed a bulkhead (that’s a ‘wall’ to landlubbers) on the Rail Ferry that separated the crew’s Mess from the officer’s Dining Room. It was a good call - you can see why they did it. The food is coming from the same galley (kitchen), and it is the same food – so why take it to two different rooms? The Strike that was threatened (by the Officers) tells you something about the cultural ambience of the Marine environment generally, the Merchant marine as distinct from the RNZN, and NZ Rail as distinct from any other merchant Shipping company. If you were to start from scratch – new company, new ship, younger crew & officers, you might be able to build the ship with one dining room and get away with it, since to a degree you are creating a new ambience. But to just sail in there and make changes in an ambience that has history and tradition wrapped around it – well, they should have seen trouble coming. Remember – to the person steeped in the ambience, it is the one true ambience. I’m surprised that it was only the Officers that complained. The crew’s mess is a place of safety and refuge where they can relax unscrutinised. Perhaps since the Officers were already striking (a neat role reversal) the crew felt they didn’t need to. One of our clients has recently acquired and merged a smaller organisation (engaged in the same business) with their own larger one. Both sets of staff now work in the same building. In talking to the staff from the smaller organisation, some reported they felt ‘lost’, and it wasn’t just that they were in a strange building. They had trouble explaining it, but what I think I was hearing was that they had lost their ‘cultural ambience’ and were being required to absorb a new one. Not easy, considering how powerful the force is, and when you consider that we spend most of our waking hours immersed in that ambience... Their one true ambience was gone forever. Another client is well down the time track of a much larger and certainly more difficult challenge – merging more than 20 separate small, publicly-owned specialist units into one National organisation that, while still receiving public funding, now has to turn a profit. Staff had for years been a small part of a larger local Unit, felt an allegiance to that Unit, were employed by it and housed within it. Now they have been ‘split off’ from their local Unit, Corporatised and in most cases re-housed locally. There are 23 different Collective Employment Agreements represented by 5 Unions. There are all sorts of traditional arrangements that some staff have enjoyed for many years that were peculiar to that small specialist Unit. Somehow, this glorious confusion has to be standardised. Wouldn’t it be lovely if you could just reduce all standing agreements to zero, start again and offer one National set of Terms and Conditions of employment, and one set of operating policies? Bliss. Fantasy Land… To do so would be to ignore the fact that this new Corporate has to try to amalgamate more than 20 different work cultures, and some of those specialist staff have been immersed in their local cultural ambience in excess of 20 years. Waving a magic wand simply isn’t in the picture here. But for some, their human team is still together as a unit, albeit with a new Parent, a new National identity and a new building. As an outsider looking in, they seem to have done surprisingly well. Occasionally one hears comments sotto voce ‘Yes, but we do things differently here than they do in (insert name of town)’. Like other Public Service occupations, one doesn’t take this job on for the money, and corporatisation hasn’t changed that yet. Perhaps part of the success comes from the individual’s sense of dedication to the profession. Yet most of these staff scattered throughout NZ come from the same core Profession and with the same basic training and ongoing professional qualifications. How can things be done differently? Well, maybe it’s that cultural thing again. Perhaps local culture is strong enough to overcome the strictures of Profession except perhaps in core methods and skills. Now the job is to standardise in an ISO-like manner, but I imagine a degree of latitude will be built in where differences in detail are not critical, to accommodate local cultural difference. Whether you cook popcorn in a Microwave or a Conventional oven is unimportant if the outcome is the same. Except perhaps to popcorn junkies. What this new Corporate is doing, slowly and carefully, is building a new cultural ambience, slowly assimilating the old separate ones. There has been conflict. People do not easily abandon that which is important to them and has been part of their lives for many years, even when/if the benefits of the new are clear and obvious. ‘Cultural ambience’ is real, and powerful. But it is also a thing of human emotion, not logic. Approach with caution. Consult, inform, listen, assimilate where possible, sell the benefits of the new, allow time, and practice tolerance. Remember that suggesting the 'new' implicitly criticises what is 'now'. New shoes are rarely comfortable on first wearing.
Perception is reality to the perceiver.
Steve Punter ANZIM, Dip Bus (PMER), FHRINZ
Staff Training Associates Ltd, Auckland, New Zealand. email: firstname.lastname@example.org
© Steve Punter 2001 All rights reserved by the author