Diversity begins at home: Team-building across companies after mergers or acquisitions Kirsten Waechter, Tailored Trainings & Translations This article is a revised version of a workshop/paper I gave at the YA / dialogin Conference High Performing International Teams, York 2009. I am looking into a difficulty that often takes the backseat in intercultural discussion: the difficulty of building an international team across parts of a group that has acquired new companies even within one and the same country. The case study below analyses some of the key issues and offers some insights into how to resolve them. In 2001, a British multinational company, a true global player with various business activities worldwide, let’s call them AD, took over the current number one in the German market. This number one, let’s call them Dual, was sold off because its parent company – Add-on – wanted to focus more on its core activities. What the British buyer, which was number four in that specific part of the German retail market with its own outlets at that time, was not aware of was the fact that with the German end came also two production facilities whose holding, let’s call that one Diba, acted as the nominal owner of the retail chain, too: they bought two companies instead of one. Whereas the new British owner had a high interest in the German retail part, they were not particularly interested in owning production facilities of which they had plenty all over the world. As you can see from this quite complex structure, there were a number of potential conflict areas. Initially, there was the rivalry between the two German companies: Dual saw themselves as the money maker, Diba saw themselves as the ones in power, who were stepped aside when it came to the sale. This background already caused some bad feelings between the two German ends, and the different corporate cultures – rooted in their business backgrounds – led to more hostility: Dual for example saw Diba as very hierarchical and bureaucratic, resembling a public authority, and itself as very customer- and service-focussed. Additionally, Dual showed no high regard for AD, either, as AD’s retail outlet was only number four and Dual number one, and, of course, the current number one knew why they are number one. So Dual was afraid of losing their brand and their market share, and they did not put their trust in AD. On the other hand, seen from the perspective of German AD, staff there feared that their head offices in the North of Germany would be closed down and that they had to move if they did not want to lose their jobs. Now the question occurs: how well aware were AD of the conflict and what did they do to make the takeover go smoothly? To answer this question, it is necessary to illustrate AD’s situation at the time given. The British parent had just emerged from another wave of takeovers in the US in order to become number three in its production and wholesale business worldwide, and the management took the steps they thought necessary to integrate the German companies, e.g. they paid for language training courses, they offered courses on cross-cultural trainings where people could learn some facts about the UK, and they sent over
integration managers. So AD UK thought everything would go well as they were experts in takeovers and they already knew the German market very well. However, things did not go that smoothly. The new structure was welcomed by some members of the German staff who saw this as a great opportunity to gain international experience. Others were afraid of change and acted more hesitantly and reluctantly. New ideas such as work-life balance and diversity and inclusion were regarded with suspicion and often discarded as lip service because the restructuring of the new organisation rather increased the workload. I would like to use one example to highlight the specific problems that were rooted in the differences of corporate culture, but also in what people perceived as national cultures as nationality seems to be the easiest stereotype to make out and to blame. But when it comes down to cultural conflict, it comes down to people and their awareness of their cultural baggage and how much it shapes the way they interact. One of the first things the new British parent wanted to do was to install new software in order to align the German subsidiaries to the British parent and to allow for smoother transfer of financial data. Therefore, the US Manager in charge of global software solutions, Grant Mitchell, called for a meeting in Germany at the new German headquarters, which are those of Dual in Essen. The project did not have a good start. Reportedly, the first integration officer appointed hardly ever left the office, but the Germans did not bring this to the attention of the UK management. So integration could not take place. The Germans experienced increasing frustration as they found it difficult to cope with the new meeting culture which they saw as very evasive and non-decisive as they were asked how they felt instead of their expert opinions. They thought it had to do with their poor level of English, i.e. that they did not understand the “English”, where in fact it was a hugely different way of communicating and different objectives that caused the trouble. The English on the other hand increasingly saw the Germans as sticklers and troublemakers who saw problems everywhere and always had concerns. Obviously, the Germans did not seem to welcome the opportunity to work for a multinational of such a high reputation. The task was to find out what hindered the project’s progress and how to build a successful crossnational team against the background given. This is where inter-cultural skills were needed, so apart from the analysis, a coaching session and a structured meeting were designed to help people realise how to improve communication and collaboration. The first thing I noticed was that thinking at both ends focussed on national cultures and stereotypes. Often I heard “the Brits” or “the Germans”, and in meetings fraternisation usually took place along these lines, i.e. in meetings the Germans sat together with the other Germans but not, say, with their UK or US colleagues in the same department. So as a first step, the coaching session would have to make people realise that they were judging others by stereotypes. Individually, they were asked to ascribe certain qualities to one of the three nationalities involved. The adjectives defined included e.g. bureaucratic, secretive, confrontational, enthusiastic, innovative, patronising, and supportive. In the end, the descriptions were brought together in a joint session and discussed.
The answers were quite revealing and useful to build on, as often qualities were ascribed to one nationality that others claimed to be theirs. Interestingly, bureaucratic seemed to hold true for Germans and British alike, and even struck a chord with the Americans. Both the Germans and the US were seen by the UK as confrontational, in turn the UK were seen as secretive – all of which can be traced to different styles of communication. Additionally, people were asked about adjectives that described the three different German subsidiaries. The labelling here also showed that the three different German ends harboured three different corporate cultures which did not really go hand in hand. Diba was seen as patronising by Dual, but so were Dual by German AD. All accused the other party of being secretive, but Dual and German AD agreed on Diba being overtly bureaucratic. Drawing parallels between national and corporate properties, Dual seemed to be the Us one with a focus on customer orientation, modernity and business innovation, Diba was seen as typically German with its clear hierarchies and traditions which, however, also reminded the British of former state-owned companies in the UK, and AD Germany were seen as modern German with a focus on speed and efficiency. The guided meeting then saw the participants holding a meeting on the software implementation described above. This was a revision of the first meeting on this issue, and on the agenda were – among other items – the timelines for the project. The key principle was here to achieve a reversal of stereotypes, to enable people to view things from the other side. Reworking a familiar situation should help them to understand what went wrong and why. Present were: Grant Mitchell, Phil Cook, Martina Winter, Jay Renton, Albert Dvoržak, and Doris Kaufmann. The participants were given role cards to be studied carefully as they had to act out a character different from their own. Then they held the meeting with the person given the role card of the project leader to chair the meeting. There were two more people in the team – actually the ones who had least problems working across cultures – who were given the role of process observers. They were asked to look at questions such as What were the objectives of the participants? How did they communicate in English? (direct, less direct, polite…) What did you notice about their body language? Where were the allies, where were the enemies? Did they manage to act as a team? The trainer made sure that two fronts were built: the Germans sat at one side of the table, the UK/US participants opposite. The role play was followed by the participants’ reflection and that of the process observers which initiated a discussion that focussed on three areas: Where did conflict occur? Where did you see common ground? What can be done to build a successful team? Even though this might seem to be an extreme and condensed situation, the case study summarised some meetings which several participants had to go through. The first reflection was on trying to walk in someone else’s shoes, and that was probably the most revealing one. Somebody who saw the project as a big step in his career had to act as someone who was totally against it – mainly because he was not involved in the decision-making process. The person who vehemently spoke against the project had to think of a strategy how to manage conflict and bring in some harmony. A person who was normally very evasive had to communicate clearly and directly.
After the first break the trainer rearranged the seating order to split up the factions and moved people together in a way that one person supporting the project sat next to one opposing it. This new arrangement changed the tone of the discussion significantly, and also provided more relaxed body language, something people referred to in the feedback session. Other learnings were e.g. that the people involved realised that cross-cultural courses in which people were taught something about the institutions of the UK was not useful if people needed to deal with multinational groups who all applied different communication styles when using English. They also had to learn that not all people are stereotypical, but even though some people lived up to their national stereotype, it did not help to think of them as the Germans or the Americans. Instead, alliances should be built where interests were similar, for example, who supported the project and who was against it? The German side was split on that, a fact that the project leader used to break up the German front. Common interest was built in other areas, too, e.g. career focus or job protection. In the end, the project became quite successful: one major step done by the UK management was to replace the integration manager by two people: a) a Belgian who had worked in Germany before and b) a British guy whose mother was German. Despite the fact that it was not only a national conflict, the principle of “bridging the gap” was applied which seemed to make more sense. Also, the German managers were more involved in the decision-making process, e.g. in staffing the team. Jobs could only be saved if the project became a success, so joint efforts were made to implement that. Furthermore, the Germans learned to reflect more on the style of meetings and how they communicated, e.g. that to some people “That is not possible” means “We don’t want to do it.” They tried to listen more “between the lines” instead of taking words at face value, and they changed their expectations regarding meetings and accepted that some meetings were for an exchange of opinions, and not for making decisions. Likewise, the English learned to appreciate the more direct style of communicating and the early flagging of difficulties that the Germans went for, as the latter allowed to detect weak spots earlier. In fact, a major IT-pilot for developing a new SAP architecture was done in Germany, so there was a share of best practice in the end: the UK end was sure that the Germans would be able to find all the flaws and bugs in the system. Nevertheless, some obstacles remained. To a certain extent AD did see no other choice but to replace people in senior management in Germany by people who had worked for AD for a while but could act as interfaces in Germany – especially Americans and Dutch who seemed to find it easier to communicate with the direct style of the Germans and who had worked in a number of different countries previously, including the UK. Unfortunately, the hostilities between the two German heritage companies still remain – something the new parent still has not noticed. The hostilities increased with the forced move of Diba staff into the new Dual headquarters. So there might be cross-national teams in place, but whether they incorporate all cultures in the group has to be seen.
Building successful teams after mergers