As Julie listened during her weekly meeting with the senior management team, the concern that had been gnawing away at her over the last week was progressing towards a much stronger sense of alarm.
The communication initiatives she had undertaken with her team since the announcement of the merger six weeks ago were not working, and the flat-lining morale that senior managers were reporting was beginning to feel ominous.
So many parts of the merger she had taken the company through in acquiring a smaller, more entrepreneurial competitor had gone according to plan. While adding this second well-known pharmaceutical brand to the company portfolio, Julie worked quickly with her team to merge the back-end operation. Significant efficiencies through the administrative and IT function had meant having to let go of 12 staff, and while she had ensured they were given career support and generous payouts, a malaise amongst existing staff was setting in.
As she listened to each manager talk about staff morale, the signs were clear. Silos had taken hold. The enthusiasm that staff once possessed, such as coming forward with new ideas or suggesting ways for cross-functional improvements and leverage, had stopped.
But why? She had held a town hall meeting to inform staff of the intended merger, they had kept staff informed of the merger using the company’s intranet site, the merger was the lead story in the corporate newsletter, and there had been a welcome function where the two new senior managers from the acquired company were introduced.
Julie left the meeting troubled by the potential consequences of what she was observing. As she saw it, her instincts were telling her that the merger had lost momentum. Critically, the additional value creation she had anticipated from the deal would not be realised if things continued on in this vein.
She couldn’t help but think what this might mean for her own career. Having been in the role almost three years ago, this merger was intended to be her career coup. Instead, she felt herself actively repressing thoughts that this could be a personal coup de grace – a potential death blow to her professional reputation.
A fresh approach
Julie knew she had to take action. She recalled a recent discussion she’d had with a colleague about Malcolm Broomhead and his turnaround of the Orica business in 2001 after shareholders had seen their share value tumble from an IPO price of $13 to less than a quarter of that value. Malcolm took on the task of taking his message to 11,000 employees spread across 45 countries in order to have all parts of the business working efficiently and in unison – an initiative that was started within the first 100 days of his becoming CEO.
Based on a clear set of performance metrics, the message he delivered was one of purpose and unity, explaining in detail what was expected of staff and why it was necessary. By delivering his message to staff directly, he was required to repeat the same set of words thousands of times throughout this period and was also supported by his senior staff and other organisational opinion leaders in their own conversations with staff. (From 2001-2004, Orica’s share price rose from $4 to $21).
While the circumstances were different, change wasn’t and Julie knew she had to change the culture of her organisation and eliminate the silo-thinking that was gripping her staff. One thing she observed immediately was that the conversations Malcolm was driving throughout his organisation were decidedly lacking in hers. Following his example, she realised she had to be the first person driving the change process, but how?
Julie brought in a communications strategist recommended to her by a colleague who had successfully undertaken a change process the previous year. She immediately discovered why the current communication efforts had been ineffective – research shows conclusively that while online communication, printed material, and town hall meetings keep staff updated about the changes taking place, they do not change opinions. Further, her observation about conversations was correct – various research indicates that 70-80% of staff prefer face-to-face conversations when understanding important change.
Julie began to get to the heart of the problem: While everyone knew what was going on via the meetings and newsletter, many staff didn’t understand what this meant for them and why they should feel positive about the change.
She also examined a LaClair McKinsey & Co. study showing that of 40 companies undergoing significant change (such as merger activity), 58% of companies did not succeed in meeting their targets. A separate study indicated that at least a quarter of these failed change initiatives could be attributed to poor communication.
In reviewing the entire process, she worked with the strategist to establish five critical communication elements that required leadership, collaboration, and commitment to support the change process:
A simply-stated post-merger vision
Julie becoming more vocal and providing a strong case for change
Senior managers and ‘ambassadors’ that overtly supported the change
Staff having input on goals, values and agreed behaviours
Staff being properly briefed on what was expected of them
Making it happen
Julie decided the vision for what the newly merged organisation needed to achieve had to come from herself and the senior management team. In working with the strategist, she knew she needed her senior people to take ownership of the vision by participating in it. Further, she realised she had underestimated the degree of influence each of these managers had on their own departments. Not only did she need to be front and centre, but so did the senior management team. She felt the best way to gain their support was to have them agree in principle that the new merger was one worth pursuing, but also to make it clear that their support was non-negotiable – they were expected to fully commit to the change process.
In addition, Julie needed ambassadors for the change, selecting a cross-section of staff that were known to management as good workplace performers and who also had the people skills required to engage in conversations with staff. Julie asked her HR director to drive the initiative. Not only could they identify future leaders in the organisation using this approach, but in driving toward the new vision her HRD could ensure the company’s performance and remuneration management rewarded the staff’s adoption of behaviours that made the success of the merger more likely.
Finally, Julie knew that to seriously engage her staff in the change process they had to have a say in the future of the organisation. With the merger, staff numbers had moved from 240 to 325. Who better to ask about ways to improve the performance of the company than the people who worked in both parts of the business?
After further discussion, it was decided the best forum to gather opinions of staff would be via an online survey. As opposed to group settings where individuals can dominate the discussion and group think can take hold, Julie felt the online survey would receive greater buy-in from staff in order to secure more objective evaluations, performance suggestions, and candid ideas to improve the working environment.
Later, after senior staff and the program ambassadors had collated the data and understood what was most important for the staff as the company moved forward, it was decided that staff should meet in teams to learn about the common values that everyone in the organisation could subscribe to. They would then need to agree as a group on the specific behaviours required in their department that were seen as constructive to helping the department and the organisation progress toward the new goals.
At the end of the day, Julie stood gazing out her window and across the city. She felt somewhat relieved but pensive. Why had she let meaningful communication with staff slip by in her plans? The painful reality was that she’d symbolically paid lip service to staff through the group-oriented communication that was distributed, while allowing all of her focus to be consumed by the mechanics of the merger.
But that was going to change. Together with these key elements of the plan were a range of supporting communication activity that would enhance the professionalism and appeal of the change process – she was serious about changing the culture and she needed her staff to take it seriously too.
Great communication, she decided, would become one of the hallmarks of her management style.
About the author
Steve Casey is the director of Hand Eye Communication. handeye.com.au