In early 2019, I attended a Startland event featuring my good friend, Harry Campbell, and Joel Goldberg who shared poignant observations peppered with humorous anecdotes on the importance of organizational culture. I spotted two men standing a bit awkwardly away from the cocktail crowd and walked over to introduce myself and ask what brought them to the event. Their response launched the vision for What’s Next Biz. Here is the crux of what I heard that day:
“Our organization is about to double in size and our CEO wants to ensure that we preserve the best of what we have today as we go through that process. She gave everyone a book called “The Advantage” and we are here to learn about ways that we can preserve our culture as we grow.”
I was blown away. I’d experienced first-hand the impact of mergers and reorgs that failed to anticipate, and then completely ignored, the aftermath caused by the collision of disparate cultures. And, I had also counseled clients through transactions that similarly omitted culture from the integration strategy. In every case, the lost productivity and employee attrition that ensued cost hundreds of thousands if not millions of dollars. Therefore, the idea of proactively identifying essential cultural attributes of a healthy organization preparing for growth made perfect sense.
“What we have here is a failure to communicate.”
Employee retention is always a concern when organizations prepare for growth and change. Yet, the typical solutions and behavior are antithetical to organizational health as well as sound fiscal thinking. Here is the usual pattern that we hope to disrupt:
The first sign of dysfunction arises when the initiative receives a code name. “Project Hercules,” “Operation Overlord” or other label that sounds more like a military exercise than a business combination or growth plan. A discrete few are tapped to shepherd the deal to fruition and sworn to secrecy. Communication breakdown has begun.
It’s not long before other employees begin to sense a shift in energy and focus. Hushed conversations, conference rooms reserved indefinitely and locked when not in use, the errant memo left on the printer, and the true power centers of every organization — the rumor mill – are tell-tale signs of impending change. Yet, after the mill starts churning, most organizations double down on secrecy as opposed to infusing confidence, energy and excitement about the possibilities that opportunities for change present.
Eventually, a generic, carefully crafted, well-vetted announcement is released — many words, few specifics and broad brush speculation about what the change could mean. Next come, the retention bonus offers. Money in return for an employee’s commitment to remain for some period of time. Again, the problem with this approach is that is assumes that everyone is motivated only by money. And, again, the solution is actual management and understanding what motivates each individual. Cash may be fleeting for one person and deeply meaningful to another. One person’s six month commitment to stay for $2,500 is worth a summer of three-day weekends to another. The only thing that stands between the two is management’s effort.
Laws, damn laws and regulations.
I pause here to acknowledge the chilling effect that many laws and regulations aimed at leveling the playing field for outside investors have on corporate communications, trust and culture. It is unfortunate that solving for the bad behavior of a few required sacrificing trust and honesty within organizations. While most of the legal restrictions apply only to public companies, their existence fosters similar restrictive behaviors and attitudes that impact all organizations in the name of “good corporate governance.”
Don’t get me wrong, “good corporate governance” is essential for every business. What I question is the propensity to hide behind laws, regulations and policies because leaders are too busy, too lazy or too disinterested to really understand what can and cannot be said and done within their organization in a given situation. Exceptional leaders and business lawyers find ways to balance actual restrictions with the best interest of employees at every level.
Don’t Stop Believin’.
Before this note becomes too esoteric, critical or convoluted, I want to pull back and focus back on that conversation with the two young men at the culture event 18 months ago, and focus on the ways in which organizations can be proactive about change.
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First, don’t forgot about those who got you there.
- Emerging. Reorganization. Success. Growth. Expansion. None of these opportunities come without the help of others. Managers, Directors and Executives need to stop and consider the value of every person on their team(s) and recognize that they deserve to understand how they contributed to whatever new and exciting experience awaits the organization in very specific terms.
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Next, find ways to be open, communicative and honest about change.
- Uncertainty doesn’t discriminate during a pandemic and it has made leading an organization very challenging. The uncertainty we all feel about when and how we will emerge from this period in history is akin to the way most employees feel during any transition. Imagine if you actually knew some of the answers about how to end the pandemic and simply chose to withhold them? If it were up to me, there would be a special place in Dante’s inferno waiting for you. So, as you emerge and consider resulting changes or new opportunities, find ways to be open and honest with your team about what is happening. Challenge the lawyers and conventional wisdom if the advise threatens the core values on which success was built.
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Finally, if you truly believe in the vision for whatever is next, you have to trust and believe in your organization.
- Align the past with the future and ensure that the values and culture that created this opportunity extend into the future. Without them, your organization will flounder and the opportunity will fail to meet its objectives. Preserving the best of what got you there will only ensure future success and yes, it takes intentional, authentic effort.
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Taking these steps will save organizations thousand, hundreds of thousand or millions of dollars in productivity, talent retention and recruiting not to mention the immeasurable benefit of retaining core values and culture that will sustain and further the organization into the future. According to a 2018 Forbes study, the cost of replacing an employee is between 50-200% of their salary. If that alone doesn’t resonate with finance, legal and HR, the immeasurable loss of institutional knowledge and client relationships should. The time and effort required on the front end to understand corporate governance and other limitations in order to create effective, authentic and meaningful communications that acknowledge, value and preserve the employees and culture that created the opportunity are a fraction of the cost of attrition and litigation.
We are here to help!
Preparing for change is as important and the change itself. Whether your organization is preparing to emerge from COVID, considering a pivot into a new industry or market space, needing to hire new people to fill existing or new positions or expand through merger or acquisition, we have the people and tools to guide you through those transitions.
Reach out for a free 30-minute consultation! We will provide some concrete, immediate recommendations and tools to get you started.