Goldenmean

Business Design. Evolved.

Category: Stakeholder Engagement

Psychodynamics of Mergers: 4 Truths

Mergers_Our World Destroyed

I was reflecting on merger integration last night (I know, I have to get a life) recalling the “best” merger I have ever worked on (Fleet Boston/Bank of America) and the “worst” (MBNA/Bank of America) and what was the common factor. The best way I can put it is imagine two rowing clubs that have been competing for decades now having to become one, and oh – by the way – adopt all the aspects of the one club. I know most folks focus on the IT integration, but in the over 20 mergers I have been involved in or led the root cause for success or failure lies in two areas. Understanding the two cultures as they were and making conscious choices about what the new culture becomes and keeping all parties fully engaged. I was struggling to explain the “loss” that occurs until I ran across a gem… a study of ANZ mergers (aka Murder in Mergers).

Here’s a teaser:

A corporate merger, on the scale of a global order, is a ‘catastrophic change’ and depends on ‘killing off’ parts of the former organizations for its success. The act of annihilating parts of the former organizations is experienced as disengaged and murderous by organizational members. This arouses persecutory anxiety of an unbearable intensity amongst members from which they defend themselves by emotionally disconnecting from the psychic reality of the new organization. Several contentions underpin the hypothesis:

  1. That a merger involves a developmental process in the creation and growth of a new organization;
  2. The event of a merger causes disruptions to roles and relationships that are experienced as a loss of power, status and identity, and also as an emotional loss for what had been cherished and valued in the former organization/s;
  3. The emotional loss evokes the symbolic experience of the loss of a ‘loved object’, and an instinctual loss becomes attached thereby to the real losses; and thus,
  4. The process of merger involves a symbolic destruction of the ‘loved organizational object’ of the former organizations, as held in the minds of organizational members.

The real lesson: the synergy depends on winning the hearts and minds of the employees you need to get on your bus, and helping the others to quickly get to a different place. All too often PMO teams forget the above without focusing enough – especially folks that are customer facing (I am living this with the US Air/American merger – airlines I fly 90% of the time).

Cheers!

Rick

10 Principles for Implementation of Sustainable Practice

I’m always looking for great principles to apply in guiding change.

The International Council of Mining and Minerals developed 10 Principles to guide implementation of a Sustainable Development Framework. Test these as you start to build a more “sustainable company”.

The 10 principles

  1. Implement and maintain ethical business practices and sound systems of corporate governance.
  2. Integrate sustainable development considerations within the corporate decision-making process.
  3. Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities.
  4. Implement risk management strategies based on valid data and sound science.
  5. Seek continual improvement of our health and safety performance.
  6. Seek continual improvement of our environmental performance.
  7. Contribute to conservation of biodiversity and integrated approaches to land use planning.
  8. Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products.
  9. Contribute to the social, economic and institutional development of the communities in which we operate.
  10. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

Brand to Stakeholder Engagement – the DDO Brand Model

Written in 2012….

A while back I designed a customer experience training program for the Banking Administration Institute called “Moments that Matter”.  Unfortunately I had to simplify the bigger MOM in order to focus on the critical few topics that newbies in customer experience management have to work through.

The core topics I focused on started with the net promoter score and how, when used as a system, it really is a catalyst for getting your company culture more focused on the customers. Seriously, how much is easier is it to get employees focused on “being the best at creating promoters” rather than “drive top 2 box from 53% to 57%”?

The second topic is using the service profit chain as an enterprise backbone to better connect customers through employees and the supporting people, practices, business processes, and technology systems.

The third topic is maximizing the use of SERVQUAL to connect capability to deliver with customer promises.

Last but not least is to walk through the series of steps in implementation to take a customer experience concept and execute it in an effective and profitable way (a special thanks to Joe Wheeler and the folks at Service Profit Chain Institute for helping me get better at that this past year).

However, one element of what I did not include was the brand to customer promises section.  A customer experience transformation often is the outcome of either a “bottoms up” or “top down” direction.  A “bottoms up” is usually when NPS detractors are being formed en mass at multiple customer touch points or by a rapidly escalating detractor event (look at Target’s rapid service recovery due the Missoni online gold rush as an example of what to do right vs. Sony’s online downtime or slower erosion of the promise.

One “bottoms up” erosion example I went through recently was the deterioration of service on the Verizon system in the NYC metro area during the recent “strike”(2012). First, we saw significant deterioration in FIOS bandwidth and performance to the point where we gave up making critical calls on the FIOS land line and resorted to critical calls using AT&T mobility, which surprisingly has made dramatic improvements in the NYC area. We called Verizon customer service on three occasions and had them come out – all to no avail.   Now who can do the “can you hear me now” commercial – not FIOS.

Another example I live through on almost a weekly basis (when I was teaching at ATT leadership institute) is the subpar first class service on US Air when I go to Dallas – chips and attitude – versus the surprisingly delightful and friendly real first class service on American to Dallas (pre-merger!) – hot meal and honest caring – and shock, smiles!  I’ve started to shift the majority of my business over to American as a result (for the record I fly coach and get upgraded due to points status).  The “top down” approach is much more challenging. This often occurs when a CEO makes a statement like, “How do we make Brooks Brothers brand more relevant in a younger demographic?” or “What do we need to do to instill trust in the Bank of America brand?”.

These are big meaty brand to customer experience delivery overhauls.  The challenge is “brand” means so many things to many people. What does brand mean to you?

My interpretation of brand is really more from an enterprise and systems thinking point-of-view and best demonstrated in a brand framework developed by  Dubberly Design Office (DDO).  At the time I was Director of Top Line Growth at DuPont and one of my projects was applying brand to a commodity Nylon 12 product. It was my proof case of our business team creating a boutique brand in a commodity business. The leadership team – marketing through ops – used the framework to design transformation objectives and created a brand blueprint and action plan that had a dozen major changes ranging from a new brand tag line and logo to changing our B2B service delivery and support.  The result – triple digit marketing ROI.  The framework is comprehensive.

Of course, perception of a brand does not arise on its own, rather, it grows out of experience with a product. Here, product is used in a broad sense incorporating the results of many activities commonly associated with marketing. Likewise, experience means here any point at which contact is made with a potential customer

Try this…. Print out a copy of the framework and ask three C level executives (CMO, CFO, COO) the following questions:

  • What does brand mean to you? Circle the areas they touch upon on the framework.
  • Who owns the elements of brand based on (1)? Write down the names or functions
  • Are we missing anything in how we translate brand into action? Listen and learn.

Let me know how it goes and then ask yourself this question. If you really want to translate brand into customer promises and consistent delivery of those promises, what do you need to differently?

I’d love to hear about any frameworks you may be using and if you run the three question test how it goes.

Good luck!

Oh…check out all the concept maps at the Dubberly Web site… talk about “pay it forward”.

Well done DDO!

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