Is your company struggling with clashing cultures? Do you have divisions that don’t see eye to eye on the best way to do business? If you’ve been ignoring — or possibly even encouraging — this kind of competition, it’s time to reconsider your approach. Organizational integration will not only make for a more pleasant workplace, it can give your company the advantage it needs to succeed in today’s global market.
Organizational integration means that every aspect of your company — from its corporate culture to its management style to its presence in the marketplace — is on the same page. All parts of the corporate entity are functioning in a consistent manner, not sending mixed messages or working at cross purposes.
Back in the late 20th century, when mergers and acquisitions were considered the key driver of corporate growth, companies focused their resources on taking over, consolidating, and/or restructuring as many of their competitors as possible.
But that rule of business has changed. Deals are more expensive than they used to be, and there’s a lot more competition out there. In a world that’s increasingly global, where products become commodities at warp speed, where customer demands are ever-increasing — the determining factor in a company’s success will be organizational integration.
To illustrate, let’s take a look at the integration of two departments in the financial services area of General Electric.
Blending oil and water
Both businesses in question had been in existence for a long time. Before being consolidated by GE, they’d been rivals in the marketplace and had often competed for the same customers. Both companies had long-term entrenched relationships and clear working styles.
Business A handled larger transactions and operated on an investment banker model, with a staff consisting of MBAs and Wall Street types. Business B did smaller transactions that were shorter-term in nature, and the staff had more of a sales mentality — lots of deals with a quick turnaround. Employees at Business B were compensated by sales volume, while Business A workers were compensated according to established organizational goals.
Business A valued attention to detail, precision, and assembling all the facts before making a decision. Business B focused more on speeding the deal along.
These two businesses were like oil and water, and as you might expect, putting them together created big-time challenges. Business A thought there wasn’t enough rigor in the decision-making process. Business B felt they were being mired in unnecessary details and thwarted from doing business. The culture clash manifested itself in finger pointing, interpersonal conflicts, and turf wars. All this slowed down business considerably.
The situation grew so toxic that management sought the assistance of GE’s internal organization development and staffing (O&S) leader. With a great deal of patience and planning, the integration team was able to build a bridge between these two distinct factions and transform them into a cohesive unit.
Here are some of the strategies they used:
- Offsite events where key players discussed their career goals and personal values, learned about each other’s corporate cultures in a nonthreatening way, and created action plans to stay focused and mark their progress
- Group feedback and peer coaching to help participants improve their leadership behaviors
- Discussions among key parties to identify the organizational design that would best serve the customer, break down internal barriers, and eliminate the “silo” mentality
- Re-configuring GE’s compensation model to reward those who embodied the new values, behaviors, and structures created by the joint efforts of the integration team
Slow but steady improvement
Slowly but surely, an atmosphere of collaboration and camaraderie began to supplant the former finger-pointing behavior. Organization members were more constructively open and candid with one another. They addressed conflict and dealt with it from a customer perspective. They took the lessons learned from the offsites and discussion groups and incorporated them into their day-to-day activities. They stopped saying things like “Well, in Business A, we did it this way.”
Over the course of nine months, the leaders of the two former divisions became a team that could work together to lead the whole business, rather than their own personal slices of the organization. Most important, the company was able to gain traction in the marketplace and meet its financial goals.
We all know it takes time to change a culture. But at GE, a systematic process managed to transform a dysfunctional group into a department that was able to solve problems and resolve conflict in an efficient way. And it all happened in less than a year.
Making organizational integration work for you
Why was this change successful? Part of it was the leadership and their willingness to confront the organizational conflict head-on. Fortunately, management was able to acknowledge the cultures of the two organizations needing to be integrated. Culture is powerful, but it’s invisible until it’s too late, like a gas with no odor that permeates everything. Each culture has elements it holds dear. It’s vital to allow participants to openly discuss their respective worldviews.
As a manager, never underestimate the power of communication. If you think you’re communicating enough now, do it three times more! Offer simple and clear messages that create direction and make sense out of what may seem like chaos. Don’t rely on passive techniques like newsletters and webcasts. Employees want to hear from their leaders personally.
Make sure your organization understands how their cultural drivers connect to the business equation. Align compensation so that it reinforces the new behaviors you wish to create, as well as financial results.
Remember: in today’s world, completing a merger or acquisition is only half the battle. Integrating your company’s internal units is the real test of success.
