One trap that’s pretty easy to fall into is when the change you want to make hasn’t been properly prepared. In other words, you haven’t done your homework.
In recent decades, many companies have been pushing forward, expanding at a rapid pace, and generally seeing the world as their oyster. Many companies have grown through new acquisitions, for example by acquiring their local competitors. In recent years, digitalisation of business and operations has accounted for much of the change initiatives that are being implemented.
Initiatives to expand through acquisitions and digitalisation often face their biggest challenge in the existing corporate culture, which can hinder the push forward that one strives for.
What is the trap of stuffing square pegs into round holes?
To illustrate, we’re going to look at a company that made its way into Europe from their beginnings as local Scandinavian manufacturers.
This company moved into the European market and became a European company through the acquisition of several other companies. Over the course of a decade, they went from having a few hundred employees to having a few thousand. Although the effect was not intended, after a few years – and a few CEO changes – they got stuck with a huge melting pot of cultural differences, suspicion and change fatigue.
There are many different explanations as to why this didn’t go as well as they’d hoped. Some blamed it on fierce competition and new consumer goods. Our conclusion was somewhat blunter.
Firstly, they didn’t compare cultures to judge how big the differences really were between the Swedish company and the companies they’d acquired. Target group analysis and general planning for how to manage a company’s most important resource – people – rarely gets the attention it requires. And it certainly didn’t work out in this case.
Secondly, the integration of people through involvement was non-existent. Attempts were made to stuff square pegs into round holes without inviting employees to participate in the continuing changes.
These are two mistakes made by many enterprises that, with the support of financiers, bought too many companies too quickly. In this case, it didn’t work mainly because of how upper management perceived and involved the employees and operational managers, both in the parent and in the acquired companies.
Swedish managers, engineers and salesmen would come in and show people how things should work, with the goal of total integration of work and IT processes, organisational structures, etc. Because of this, the problems for each newly acquired company grew exponentially; There were cultural clashes, clashes in views and in general ways of working.
