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Today we're going to talk about Change, Transformations and Culture.
We hear and read so much about lack of engagement of workers in the marketplace, disgruntled organizations, electorates rebelling, morale going down, disenfranchisement, communities breaking up and values erosion. McKinsey and others in the consulting community have written for decades about failed mergers and acquisitions, failed change efforts and failed transformations. And I think it's because of Culture.
I go back to IBM as a key example: It was the lion of the computer world for decades until it ran into a bad patch. The chairman decided to break up the organization. He was asked to leave by the board, and the new CEO came in and said - Wait a minute, we don't need to break it up. All the capability that was there is there, therefore what we have is a "culture" that needs a clear direction. And IBM rebounded.
I look at formidable old companies because of my industrial experience in computers. HP, built by two good friends in Silicon Valley - engineers built a quality organization, innovative, had great client relationships. But they ran into a bad patch as most do at some point. The leadership had turned over and it was now being administered by professional managers. They decided to acquire. They acquired Compaq, which had just acquired Digital Equipment. They also acquired EDS and Autonomy. Now, what happened? Compaq sold boxes - they had to acquire Digital Equipment to get into the systems integration business because Digital had some great systems integration skills. But HP, by buying Compaq (and Digital) and EDS, they were trying to merge multiple cultures. That was a design for failure. They've come back but not all the way.
What this led to was SAP, Oracle and Amazon, who said - What's going on in the marketplace? What does the customer want? And they all found that the customer wanted an integrated solution. So they built that integrated solution by the people that they had in their organization. Remember, all of these organizations said, my most important asset is my people. But when you change cultures, you're also affecting people.
So all of you looking to change, like General Electric, thinking about breaking into small parts; Amazon, buying whole foods, a very different industry; Chip makers being bought and sold as we speak. If you don't consider culture, your financial analysis may be at risk.
Topics: Employee Engagement , Growth & Productivity , In The Workplace (Podcast) , Leadership