4 tips for combating M&A failure
2014 has been a banner year for merger and acquisition activity by volume – though 40-60 percent of those unions are expected to fail. Nationally renowned organizational culture expert S. Chris Edmonds offers four tips for top executives to position their change initiatives for success through the use of organizational constitutions.
A recent BusinessInsider.com article revealed the volume of global mergers and acquisitions has reached its highest level in seven years. “Companies have strategic imperatives to do deals, they have the cash to do deals, and they can borrow additional cash at record-low rates,” explained Frank Aquila, a mergers and acquisitions lawyer at Sullivan & Cromwell, LLP. “It really is a bit of a perfect storm when it comes to deal-making.”
Unfortunately, a “perfect storm” for big deals can quickly devolve into a crisis for employee engagement, as companies attempt to integrate not only operations, but also disparate organizational cultures. As cultures clash, companies can struggle to realize the efficiencies they need to improve their standing in the marketplace. The hard numbers tell the story of this disconnect: 40-60 percent of this year’s mergers and acquisitions are expected to fail.
“The problem is, most leaders have not experienced a successful culture change,” observed S. Chris Edmonds, organizational culture expert and author of the upcoming book The Culture Engine: A Framework for Driving Results, Inspiring Your Employees, and Transforming Your Workplace.
“And even fewer leaders have led a successful culture change. Leaders owe it to their stakeholders to become aware of and address the issue of culture alignment, particularly when they undertake major change initiatives.”
As the fourth quarter of 2014 (and year-end reporting) approaches, Edmonds urges top executives to familiarize themselves with his proven approach to designing and aligning organizational cultures.
“An organizational constitution provides top executives with the step-by-step tool they need to lead their organizations through major change, especially when the stakes are high and the timeline is tight. In 18 months, these constitutions can inform gains of 40 percent in both employee engagement and customer service scores, as well as 35 percent gains in net profits for the business. These gains can make the difference between a successful merger or acquisition or a failed one.”
How to lead your team to M&A success
Tip #1: Define desired values
Define what “great team citizenship” looks like for every leader and employee. These values form the foundation of an organizational constitution, as they reflect the ideals upon which the business operates. Values should focus on desired principles, such as standards for honesty, integrity, work/life balance or the meaning of organizational loyalty.
Tip #2: Identify valued behaviors
Specify the behaviors that every leader and employee should demonstrate, in every interaction, with both team members and the public. Be sure the behaviors are concrete, observable, and measurable. When taken in concert, people’s behaviors will serve as evidence of the organizational constitution. This evidence will be noticed by both internal and external stakeholders, and will be used to judge the quality and health of the organization’s work environment as well as the organization’s performance.
Tip #3: Examine current beliefs
Most people don’t examine their beliefs every day. They just do things that seem to make sense to them. A crucial step in creating an effective organizational constitution is highlighting “flawed” beliefs that may be driving undesirable behavior. For example, a work environment operating from a “competitive interaction” norm instead of a “cooperative interaction” norm encourages withholding of information and “I win, you lose” battles daily. Create a safe space in which leaders and employees can pinpoint and discuss negative beliefs and redirect them toward more productive ones.
Tip #4: Manage behaviors – not attitudes
Contrary to popular belief, people’s attitudes can’t be managed. By definition, attitudes are internal, inside each leader and employee. Even initial high performers can lapse into poor attitudes and lackluster production when they’re placed in pressure-cooker situations. Managing behavior is the only concrete, measurable way to encourage good/dissuade poor organizational citizenship.
In ‘The Culture Engine’, Edmonds expands upon these four tips and offers additional insights into building an effective culture that will weather both the daily moves of the marketplace and the toughest change initiative.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.