Integrating Processes and Culture During Acquisition

Integrating Processes and Culture During Acquisition

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During the course of our history, Abrasive Technology acquired over 15 manufacturing companies worldwide, implementing our processes and our culture each and every time. Manufacturing with Heart, Inc. was formed to share our experience in transforming organizations.

Here are three things we know for sure:

Trust is paramount.

You must build trust first. You do this so you can gain consensus around where you’re going, what you’re doing, and why you’re doing it!

“When I buy a company, I think about what it will take for the people in this company to trust each other and the new management team” – Butch Peterman

DWYSYWD (Doing What You Said You Would Do) is the fastest trust generator.

When a new company was acquired, leaders set expectations for new employees about what we were going to do to improve their operation. Facilities were upgraded. Put in new bathrooms and lunchrooms. Installed consistent computer and phone systems. Made sure the right machinery was in place to get the job done. Shared the company’s vision for the company and each associate’s part in the journey. If you don’t DWYSYWD, associates won’t trust you.

A trusted person assumes a level of control for making independent decisions. There can be no autonomy without trust.

Trust is a two-way street. If I trust you, you’re likely to trust me. If I distrust you, then you certainly won’t trust me. So, what is the default? Trust or distrust? This is an important point.

If leadership doesn’t genuinely believe people can be trusted, then no matter how many change initiatives they try, they are doomed to fail.

“For us everyone is trustworthy until proven otherwise” – Tanya Patrella

Many companies believe they have a culture of trust already in place despite their hierarchical structure and rules which undermine real trust. If you are still using rules and surveillance or carrots and sticks to manage associates, then you are wasting energy that could be put to better use!  How many rules versus expectations and support is in your company’s Employee Handbook?

Transparency shows respect.

Transparency is the antidote to the rumor mill. Rumors breed in an atmosphere of secrecy. In our experience, we’ve found that very little information needs to be confidential.

When employees have insights into the business and are involved in the decision-making process, they are more engaged. Engaged work forces “have significantly higher productivity, profitability, and customer ratings, less turnover and absenteeism, and fewer safety incidents than those in the bottom 25%”.*

In our flat process-centered organizational model, the company and its associates benefit from the openness and sharing of information.

As Tanya states in Manufacturing with Heart, A Holistic Approach “we share many metrics with all associates on the performance of the business and processes. Process Engineers use metrics to determine where to improve – it could be bottlenecks, overtime, systemic process problems, training needs, or additional resources needed. Coaches use metrics to work with individuals to match and improve their capabilities to fit the needs of the individuals and their processes.”

Do your managers engage employees at all levels in decision making?

Perseverance is essential.

Studies have shown how all of us are notoriously bad about predicting the future. So, like it or not, you will encounter surprises during business integrations. Any kind of change is disruptive, so you need to have patience, perseverance and be ready to adapt throughout the process. Establishing trust and showing transparency makes this easier.

However, it’s important to know that you first must allocate resources before you see any benefit. The curve on the graph will go down before it goes up. However, it’s likely to go up a lot when you are successful.

“At Abrasive Technology, when I proposed a flat process-centered organizational structure without titles, three or four of my staff had serious reservations about how well it was going to work.  I was willing to take the short term hit for the long term benefit for our company, associates, customers and suppliers.” – Butch Peterman

“There were times even I wanted Butch to go back, but he stayed the course. Unless someone’s willing to suffer the short-term pain, change will fail. We’re biologically hardwired to want immediate rewards. The mature adult learns to delay gratification, so this is back to the ancient idea of leadership as a practice.” – Tanya Patrella

“The movement is from transactional to transformational changes. Transactional is where you measure everything. You put in rules and regulations. This is the opposite of trust. It’s attempting to control based on what’s happened in the past. The focus is on the short-term fix. A large public company can’t afford the necessary dip before the upside. Investors in public companies demand short-term result which limits the opportunity for transformational changes to those organizations. Transactional measures only kick the can further down the road.” – Butch Peterman

Are you a transactional or transformational leader?

Our Principals have the experience and tools to help you gain Direction, Alignment and Commitment (DAC) with your Leadership team and engage all your employees. If you are ready for Transformational change in your organization, then you can learn more about our model in Manufacturing with Heart, A Holistic Approach, or, you can get started today by giving us a call at (614) 571 – 8586 or completing our Contact Us form.

 

*Industry Week, November 2014 p.8 Patricia Panchak, Editor in-Chief

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