The Impact of Culture on Mergers & Acquisitions

by Gene Gitelson, John W. Bing, Ed.D., and Lionel Laroche, Ph.D., P.E.

According to a KPMG study, "83% of all mergers and acquisitions (M&As) failed to produce any benefit for the shareholders and over half actually destroyed value". Interviews of over 100 senior executives involved in these 700 deals over a two-year period revealed that the overwhelming cause for failure "is the people and the cultural differences". Difficulties encountered in M&As are amplified in cross-cultural situations, when the companies involved are from two or more different countries.

Seven Pitfalls on the Path to Merger Success

Merger success is possible; however, being part of the 17% that succeeds, rather than the 83% that does not deliver, requires more than insight. Merger success is based on acceleration, concentration and creating a critical mass for operational change (adaptation).

Up to the point in the transaction where the papers are signed, the merger and acquisition business is predominantly financial - valuing the assets, determining the price and due diligence. Before the ink is dry, however, this financially-driven deal becomes a human transaction filled with emotion, trauma, and survival behavior - the non-linear, often irrational world of human beings in the midst of change.

The seven pitfalls represent the critical and vulnerable areas of the M&A transaction. These areas must not only be valued for their negative impact on the critical success factors that drove the "deal", they are the very agenda for the organization's action in the critical first 90 days of the new entity.

In the case of international mergers and acquisitions, the complexity of these processes is often compounded by the difference in national cultures. People living and working in different countries react to the same situations or events in very different manners.

Therefore, a company involved in an international merger or acquisition needs to consider these differences right from the design stage if it is to succeed.

Pitfall #1: Preoccupation

In Canada, individual preoccupation with "How is this all going to impact me?" weakens commitment to the job at hand. This, in turn, translates into people looking for work in other companies. Often a firm in the midst of transition loses some of its own talent - strengthening the competition.

In countries where people identify largely with groups, people tend to look for support within their group. In France and Italy, people caught in the midst of a merger or acquisition often turn to unions. If unions cannot provide answers because they have been excluded from the negotiation process, they are likely to go on strike. These strikes may do much more damage to the organization than comparable Canadian strikes; for example, the strike by French railroad and subway workers in December 1995 resulted in the demise of the Juppé government.

What is less apparent is the pervasive loss of productivity of those who remain. Studies indicate that line employees and managers at all levels lose a minimum of 15% of personal effectiveness as a result of rumors, misinformation, and worry. They also indicate that teams tend to break down and become less effective during mergers and acquisitions.

To quantify these losses, determine the number of individuals involved, multiply by their fully-loaded hourly wage, consider just one hour lost to confusion, waiting for clarity, figuring out who should do what to whom (assuming you know who "whom" is) and a likely job search. This is how much productivity is lost per day to the company (and the new owners). Multiply this by 65 (there are 65 working days per quarter) and compare this number with the amount in gross sales revenue that the firm will have to generate to the bottom line to offset this loss in productivity.

The strategy: Acceleration. Speed the integration to reduce the uncertainty and anxiety. Delayed decisions to "ease the pain" only magnify and sustain the pain and prevent the company, the individuals and /or the groups from getting on with the work and their lives. In the case of international M&A's, ensure that both individual and collective concerns are addressed.

Pitfall #2: List-making

You may also call it compulsive-obsessive list-making; whatever the name, it's real. In the face of overpowering uncertainty and rising fears of insecurity, it will happen. Making comprehensive lists is a very logical response to one's world thrown upside down. Lists of things to do fill the space and suppress the anxieties; they even make sense, except to the bottom-line and the economic drivers that were the very basis of the merger.

As soon as the merger is announced and the first calls to action proclaimed, the reality sinks in. The "list" is overwhelming. Personal and departmental needs drive the allocation of resources. Quickly, as the days build, there is a widening disconnect between the financial and market-based goals of the merger and real-time allocation of effort.

Tolerance for uncertainty varies widely around the world and this variation can play havoc in international M&As. For example, Mexicans tend to require more structure and definition of their role and responsibilities than do Canadians. When a Canadian corporation acquires a Mexican company, its Mexican employees are often looking for information and structure that is not forthcoming, because their new Canadian managers deem it unnecessary. The Mexican organization often grinds to a halt, since Mexican employees are unlikely to go and ask for the information they need, since this may be viewed in Mexico as questioning management's authority.

The strategy: Concentration. During the first 90 days, focus and get everyone to focus on the 20% of the goals that yield 80% of the economic value. Dealing with uncertainty explicitly is critical to the success of M&As.

In the case of international M&As, the economic value of a foreign organization may not be where its Canadian partners expect it. For example, a Canadian company acquiring a company operating in a country where the government controls much of the economy may find that the value of its new acquisition lies more in the personal ties between its managers and high level government officials than in its quality of service.

Pitfall #3: Organizational Proliferation

In Canadian organizations, many task forces, committees and integration teams are created to handle all the lists and to plan new lists. Integration structures and transition teams designed to be all-inclusive and to represent a sign of "new partnership" will weigh heavily on an organization seeking to keep its eye on its customers and the market. More effort will be placed on temporary rules and reporting relationships than the work itself.

In the case of international M&As, this issue is compounded by the fact that organizational change is brought into companies in different ways in different countries. For example, in countries where the sense of hierarchy is much stronger than in Canada (like France and Mexico), change is brought about from the top and employees at all levels expect new directions from their managers. This may paralyze cross-cultural M&As, since top Canadian managers expect input from these teams and committees, while French members of these committees and teams expect direction from their managers.

The strategy: Accelerate, concentrate and adapt. Form small, agile, quick-acting teams, including people from both sides of the M&A, with a clear mission and empowered integration team managers with direct access to senior management and to their support. Transitions do not need to be demonstrations of democracy in action.

Clear leadership and strong support is essential to these teams; without it, they often break down into sub-teams (one sub-team for each side of the M&A). This is particularly common in the international case, since language and cultural differences create significant communication issues.

Pitfall #4: Infrequent and irrelevant communication

Fear and a lack of all the answers deters top management from providing the information that customers, shareholders and employees need to redirect their action to the value-added of the deal. Rumor fills mystery and vacuums. When there is communication, it often lacks information and substance that explains and supports stakeholders' interests.

In many international M&As, the working languages of the two organizations involved are not the same. Communication can break down even when the employees of the foreign M&A target speak English. Consider the case of a Norwegian - American joint venture. Because Norwegians tend to be more relationship-oriented while Americans tend to focus on tasks, the parties almost came to blows over when and how to bring the discussions to a conclusion. The Norwegians complained that they had not built up enough trust to negotiate final details and needed more time. The Americans responded that they could not waste valuable time on further meetings and that the matter should be settled by the legal team. Tension decreased when the teams realized that their goals were the same but their ways of achieving them were quite different; a deal was eventually struck.

The strategy: Accelerate, concentrate and adapt. Frequent communication, repeated at least 7 times through multiple avenues - print, voice mail, e-mail, meetings, and video. In times of stress, the "noise" of survival and uncertainty drowns out the message. Over-communicate and remember that responsibility for a message being received lies with the sender as well as with the receiver. A recent PricewaterhouseCoopers survey of 124 mergers indicates that those firms that implemented effective communications strategies showed better results in customer focus, employee commitment and productivity than those firms that had a delayed communication strategy.

In the international case, communication often requires translation as well as adaptation. Indeed, the best way to make a presentation and to reach an audience differs from country to country 1. The communication strategy needs to take communication style preferences into account, as in the Norwegian - American example mentioned above.

Pitfall #5: Triangulation

Without clear lines of authority and clear understanding of where they fit in, employees and managers are caught in a web of conflicting objectives and old loyalties. This type of organizational and personal strangulation robs the new entity of the very energy it needs to overcome the losses in productivity.

The tolerance for "fuzzy", temporary organizational charts and decision-making processes depends on the countries involved in the merger or acquisition. In hierarchical countries, like the Philippines, both organizational chart and chain of command need to be clearly defined, more clearly than in Canada. If employees do not understand them, paralysis often results. A Filipino employee reporting to two managers, as in a matrix organization, will likely be quickly overwhelmed. He / she interprets the situation as having to meet two complete sets of expectations and perform two separate jobs. For Filipinos, asking managers to discuss their conflicting requests would be viewed as insubordination.

The strategy: Concentrate and adapt. Concentrate on substance rather than form, and focus on helping people adapt. Management needs to provide the information that people need to be comfortable with the new organization; this information depends on people's cultural backgrounds. In Canada, people need to know how they fit with the value drivers rather than short-lived organizational charts; such may not be the case in other countries.

Pitfall #6: The relatives

Not the "in-laws", but the relative forces of time and space. Time in a merger is accelerated, compressed and merciless. In Canada, publicly held companies need to show clear results at the end of the first quarter after the announcement. Individuals going through a merger have to work at an accelerated pace at the very same time that the inner adaptation of change - personal and psychological transition - weighs them down and operates on personal, rather than linear time.

Change is easy; inner adaptation is not. And time is relative - the leaders started their adaptation to the new reality far before those who learned of the merger on announcement day. The leaders have ridden the wave and are way in front of this shock wave now crashing down on the others. They wonder about why people don't seem to "get it" and often mistake shock and confusion for resistance to the new realities.

The concept of time is also related to culture. While long-term in North America tends to mean three years, it means up to 30 years in Japan. Consequently, Japanese strategy discussions are likely to take into consideration events that Canadians consider irrelevant, since they are expected to take place beyond the Canadian planning horizon.

Space is also relative. In an increasingly virtual world, those not "connected" in the same space and time feel disconnected from the decisions and the center of the action. Irregular and incomplete communications at headquarters becomes a daunting challenge for those who live in different time zones, regions, countries and organizational units.

The strategy: Adapt. Adapt to the realities of change and transition - they are different experiences and each individual will have their own way of going through them. Help guide and support employees through the endings that they need to come to terms with before you expect them to embrace the new world. Provide temporary structures to enable people and departments to navigate between the old ways and the new. Actively manage the merger across time, space and organizations, keeping in mind the different concepts of time and space that may be at play. Create the appropriate communications tools and the accountabilities and standards that will enable the organization to better operate across time and space.

Pitfall #7: The guiding light

At a time when leadership and active management is most called for, the stress and uncertainties associated with the merger causes an inward focus and a retreat to safe and high ground. More leadership is needed, at this time, than less. One of the primary roles of a leader is to articulate a vision and inspire others to join in that vision. Proclaiming a new vision and handing out laminated cards, however, does not create a new vision for the new entity. A clear new vision captures the critical success factors and economic drivers that brought the entities together.

In the case of international M&As, the need for leadership remains, but the nature of leadership changes. Being a good leader requires different skills and attributes in different countries. For example, charisma and a positive personal image are important attributes of leadership in the U.S., more so than in Canada.

The strategy: Adapt. Only a new culture can create the context for true change to happen and hold. Changing culture means changing behavior. One of the quickest way to effect change and create the new company is to place in all key positions those individuals who are true representatives of the new culture and who can lead effectively people on both side of the company's cultural divide. These people are the role models who demonstrate, with the visible active support of senior management, what the new culture is.

Conclusion

These pitfalls of mergers and acquisitions challenge today's leaders to a new standard of managing change. The strategy is clear - accelerate, concentrate, adapt, and in the case of international M&As, consider cultural differences. The human and cultural issues that separate the 17% from the 83% are not about some abstract values or the "soft stuff", but the concrete reality of productivity, economic value and sustained growth.

References
1 "On with the Show", L. Laroche, CMA Management, December 1999 / January 2000.

Metrics for Assessing Human Process on Work Teams

by John W. Bing, Ed.D.

Management has been defined simply as "getting things done through others."1 Managing and leading complex organizations is challenging, at least in part because the most utilized tools to assess management's approaches are end-point financial measures. Reviewing quarterly profit/loss statements as a guide to management's skills is a bit like measuring a doctor's skills by the apparent health of the patient rather than reviewing the full set of analytic results which more effectively predict health or illness. We know too well that reliance on short-term profit results is no certain indicator of the long-term health of a company. We need other measures, measures that assess both the application of specific managerial approaches and policies in addition to the output measures of financial returns. In so doing, we increase the opportunities open to managers to understand and improve the effects of their policies and approaches.

I suggest in this article that measurement and monitoring of work teams over time is a crucial way for organizational leaders to both support improved team performance and to measure, through the aggregation of human performance metrics on a digital dashboard, changes in team performance and, in turn, to relate these measures to bottom line, financial changes.

CHARACTERISTICS OF WORK TEAMS

Work teams are the backbone of contemporary work life. Executive teams run corporations. Project teams create new products and services; matrix teams are involved in the development of everything from pharmaceuticals to the delivery of services in consulting firms and charitable agencies. Marketing and sales teams deliver products and services to customers. Except in the most traditional of organizations, for example sometimes in governmental organizations in which highly structured departments remain, teams are essential to the way organizations carry out their work.

Global Teams are a special genre of teams. Most of the examples in this article are drawn from global teams. The notion of global teams would have been thought at best unlikely until the last two decades. Within that time, communications infrastructures began to provide efficient support for synchronous and asynchronous contacts between distant employees, and corporations began to realign their workflow through those individuals and those geographical areas most likely to increase efficiencies and productivity. Thus, virtual teams and global teams were created to allow companies to improve competitive advantage. Such teams, however, provide managerial challenges, as the imperative to "get work done through others" is different when the "others" are not found around the proverbial water cooler but are embodied in bits and bytes on computers and telephone exchanges. With increasing distance between team members, it is much more difficult to build trust, which underpins successful teams.2

Cultural and linguistic differences also play significant roles in mediating communications on global teams. Although the business of most global teams is conducted in English, there is typically more than one language natively spoken by members of a global team. These members may have more difficulty expressing themselves in spoken or written English than do their native-English-speaking colleagues.

Cultural differences are more subtle intermediaries. In one project monitored by ITAP International involving a pharmaceutical team located both in the United States and in Spain, there were numerous complaints from the American team members because their Spanish colleagues copied e-mail messages to their bosses, which the Americans perceived as undermining forthright communications. In a meeting convened to work through issues uncovered in measurements of team process,3 the Spanish members of the team asserted that it was their responsibility to inform their supervisors of the progress made by their team; to do otherwise would be negligent.

Dutch pioneer Geert Hofstede measured cultural differences through a five-dimensional system.4 The dimensional set which emerged from his research - Power Distance, Uncertainty Avoidance, Individualism/Collectivism, Masculinity/Femininity, and Long/Short-Term Orientation - is the most researched body of quantitative crosscultural research in the literature. The Spanish scores for one of these dimensions, Power Distance, a measure in part of "subordinates' fear of disagreeing with superiors and of superiors' actual decision-making styles,"5 are significantly higher than those for the United States. That specific difference was the root cause of a number of communications problems within this team. As another example of Power Distance issues, the American department head, who supervised the team, thought that the Spanish supervisor controlled the Spanish contingent too tightly; the two leaders had a number of meetings before this issue was at least understood, if not resolved. In circumstances in which one culture dominates another by virtue of the authority of the home company, such differences are often hidden or suppressed but no less significant and are surfaced through the application of process metrics or, less fortuitously, subsequent team malfunctions.

MEASURING TEAMS

Teams are a bit like people in their complexity and types; and although progress has been made in measuring individuals with respect to their type, development and capabilities, the science of team metrics is in its infancy. This is even more notable in that teams could well be natural units by which top management might most efficiently determine the effectiveness of their policies and leadership; yet management has rarely attempted such measures. Reorganizations and restructurings are common; yet how many have been implemented in which appropriate pre- and postmeasures have been taken to determine the specific areas that require redevelopment and restructuring and most important whether such efforts have achieved desired results?

Indeed, much of the reorganization and restructuring of organizations, which is enormously expensive in terms of time and other resources, might well have been avoided had diagnosis of problems been undertaken and smaller-scale changes made. In addition, in the contemporary organization, teams are perhaps the most appropriate unit around which to make complex and ongoing measures of both human process and productivity. As Jones and Moffett write, "an effective measurement system gives work teams the same kind of business data once used only to manage entire organizations.6

Lacking such measures, it seems quixotic at best and malpractice at worst for management to reorganize work units.

The lack of team output measures also accounts for the difficulties that management has in rewarding teams. Although we have 360-degree measurement (typically in Western corporations) to measure the development of managers, very few team measures exist to support rewards systems for teams. Most team rewards are based on individual assessments rather than team effectiveness.

Management's inattentiveness to such matters is, I believe, a constraint on improving the capacity of complex organizations to become more effective as learning organizations. For if management is not focusing on measuring the effectiveness and productivity of their organizations beyond financial measures, it is difficult to determine which parts of the organization are functioning well, and which are not, beyond a gut reaction. Such measures have the additional value of providing specific diagnostics, and therefore appropriate interventions, when teams falter.

TYPES OF MEASURES

There are two types of team measures to be discussed here, those of team process and those of team output or team productivity.

Productivity Measures

Some types of teams lend themselves to such measures more easily than others, and some measures are more typically applied than others. For example, a top management team might be measured appropriately by shareholders by means of the general productivity of the company in terms of its profit or loss over time; however, at the same time, measurements of the company as a learning organization are also important indicators of the capability of the company to maintain or increase productivity, and these are more difficult to make. At the shop floor level, measures are usually easier and can be made in terms of the number of units produced at specific levels of quality by work teams as well as the safety record of the unit over time; absenteeism, and so on.

Jones and Moffett, in a case study on measurement on work teams, list four common measures on such teams: productivity, quality, cycle time, and on-time delivery. They then note that:

To establish ownership, teams customize their measurement system in four ways. First, they can add a measure of their choosing that reflects the team strategy. Second, within limits they can determine the weighted importance of the measures to reflect their own thinking about strategy. Third, within limits they can set their own performance standards for each measure. Fourth, in some cases they can influence how a measure is calculated so that it comes more under their control.7

However, measurement often stops at the factory level.

While it may be more difficult to define appropriate metrics, various human resources department teams could be measured on the length of time required to recruit specific positions matched with supervisor satisfaction of the successful candidates and the costs involved; on the cost of payroll per employee; and training, by supervisor satisfaction with skills provided to subordinates.

Human Process Measures

Human process measures are likely to be precursors to productivity changes. Why? If communications fail or are marginal on a team, it is likely that productivity drops will not be far behind. If objectives are not clear, then how can a team reach them? If roles and responsibilities are muddy, how can the team efficiently carry out its work? If trust is lacking, how can a team work together? An American general who commanded troops in the first Gulf War commented: "We had an unusually strong team, and trust was a major factor.... You need people schooled and trained in their own type of warfare, and then you need trust in each other."8

Although there is face validity to the above statements, management is often reluctant to carry out measures to determine the degree of comparative effectiveness in these basic areas. In such resistance, there may be many missed opportunities.

COMPARING HUMAN PROCESS WITH OUTPUT ON TEAMS

Although this article is not focused on the measurement of team productivity, or outputs, it is important that human process metrics be combined with team output measures to correlate how changes in team human processes lead to changes in output. Of course, although finding of correlations do not prove causation, repeated correlations over time and with different teams will eventually build a solid base for viewing process measures and interventions as fundamental to improving team productivity.

A decade ago, a Swiss-based pharmaceutical company asked ITAP International to develop a method for measuring process performance on three global teams. The teams were composed of scientists from Europe, the Americas and Japan. They met four times over a period of two years, and continued their team responsibilities during the intervening periods. Their purpose was to create procedures to reduce research and development time in three drug delivery areas: oral, skin and subdermal. The teams were tasked with similar assignments and because the composition of the teams was similar, they became ideal candidates for studying differences in human processes on global teams and comparing results between the three teams.

A questionnaire was developed to measure human process on these teams, and was administered six times over the two-year period that these teams met together. At the end of the two years, specific questions from this questionnaire, now called the Global Team Process Questionnaire™ (GTPQ) were compared with peer rankings provided by the participants. These correlated positively; in other words, the highest-peer ranked team also had the highest GTPQ results on the questions tested.9

In Figures 1 and 2, process questions are correlated with the peer-ranked productivity of each team. In Figure 1, team objectives were compared with quality of output; in Figure 2, perceived communications levels were compared with peer-ranked outputs. In both cases, there were straight-line correlations between process and output.

Figure 1. Team Objectives vs. Quality of Output.

Figure 2. Perceived Communications Levels.

Team Process Examples

Let's review examples of measurement of human process on teams. The teams listed were all (except in one case) measured by the Global Team Process Questionnaire™, mentioned above, which has been construct-validated dimensionally, and which has proven reliable in repeated applications.10

The following examples are all taken from assessments of teams within the pharmaceutical industry. This industry makes extensive use of global teams in basic research, statistical analysis, product development, clinical development, regulatory, operations, and marketing and sales. During various stages of drug development and testing, many of these functional areas are representing on cross-functional coordinating teams supported by single-function teams. The functional teams are able to support a number of coordinating teams. Many of these teams may have member representation from more than one country.

FAILING TO APPROPRIATELY CHARTER A TEAM

One of the most important factors in a team's success is the initial chartering of a team. Chartering is, essentially, providing the internal and external objectives and structure for newly created teams and providing team members with an understanding of their roles and responsibilities. If this step is not appropriately provided, many problems can develop in the future activities of the team.

Figure 3 is the executive summary for a team that had not been appropriately chartered. The executive summary contains five dimensions (in a domestic version of the GTPQ, which has an additional dimension, Culture and Language).11 The domestic version is called the Organizational Team Process Questionnaire™ or OTPQ. Note that in all five dimensions this team lags the pharmaceutical industry averages that we maintain.12 In this summary, 1 is the "best" score and 6 the "worst," so the lower the score the better the outcome.

Figure 3. Executive Summary for an Inappropriately Chartered Team.

Figure 4 is a spidergram, in which each letter on the diagram represents a team member's score for this specific question - "Are the objectives of your team clear?" Only one of the nine team members indicated an understanding of the objectives; the remaining eight did not. This is another symptom of failed chartering and indicates that the team must go through a chartering process if it is to form the basis for teamwork.

Figure 4. A Spidergram.

ADDITION OF NEW MEMBERS INTO AN EXISTING TEAM

Over time, productive teams develop a sense of trust and a common approach to work, which can be disrupted when members transfer out or in. The larger the percentage of team members lost or gained, the larger the consequence.

Figure 5 shows data on four questions taken after the induction of 11 new members and a new team leader (with only three prior members remaining). All four questions show a distinct difference in perspective between the old team members and new members on the issues of team leadership, clarity of objectives, communications and trust. (In this table, 1 = best possible score; 6 = worst possible score). Here is clearly a case in which, based on the data, a new team leader combined with a large influx of new members requires a team rechartering effort. Otherwise, the old members will remain a disaffected group within the larger team.

Figure 5. Team Scores after Induction of New Team Members and Leader

Question	Average Score All Team Members	Average Score Old Members	Average Score New Members	Difference
Effectiveness of team leadership	2.50	3.33	2.22	-1.11
Clarity of Objectives	2.67	3.33	2.44	-0.89
Communications	3.00	3.67	2.78	-0.89
Trust	3.00	3.67	2.78	-0.89

DEGREE OF MANAGEMENT SUPPORT

Management support is an external but powerful force that can either buttress or retard the productivity of teams. Figure 6 is a comparison of two teams, one with perceived management support, and one without such support.

The top spidergram is tight, indicating a team that acknowledges and appreciates management support. The diagram on the bottom shows a team that as a whole believes that management support is lacking, although there are strong differences of opinion. In an intervention based on this data, a facilitator would probe the team for the reasons behind the perceived ambivalence of management support. Management, in turn, would have data indicating that their support was either not communicated or not sufficiently provided.

Figure 6. Comparison of Teams With and Without Management Support.

THE EFFECT OF MERGERS ON TEAMS

There are other outside influences on teams. In an early version of this measuring instrument, three teams were tested over six iterations on a variety of team process issues. On the first five iterations, there were changes in the process effectiveness of the teams, although team B was clearly the leader overall. However, on the sixth iteration, all three teams fell (see Figure 7). At first, we were puzzled. We had expected that our interventions would improve team process and performance. Were our interventions faulty? Then we realized that the steep decline in all three teams was caused by the effects of a merger with a larger pharmaceutical company, announced just after the fifth iteration of the questionnaire had been administered. As is often the case in mergers, team members expressed concern for their jobs and positions within the smaller firm with which they were associated. This provided support for the notion that the metrics were reflecting the impact of "real world" events.13

Figure 7. Effects of Mergers on Teams.

KEEPING A TEAM ON TRACK

A corporate leadership team, which had consistently improved over four iterations, had a noticeable fall-off in the fifth iteration GTPQ results. At a team meeting, a facilitator helped the team discuss the issues that had the most marked negative responses and the biggest drop from the previous iteration (see Figure 8). The team was then able to identify common themes - direction, ownership, deployment, communication and cooperation - which they were then able to weave into the strategic planning discussions held throughout the remainder of their off-site meeting. The example in Figure 8, of a specific question from the GTPQ, was but one question of a total of 28. However, the aggregated team results showed the same fall-off in human process effectiveness for this team. Again, this illustrates both the kind of results obtained as well as how the information can be used to quickly check performance declines.

Figure 8. A Specific Question from the GTPQ.

CONCLUSION

Process and outputs are inextricably linked on teams.14 Future research will indicate whether human process measures can forecast productivity changes or whether these factors are correlated in other ways. In either case, metrics that allow managers to drill down to specific problems with processes on teams will allow interventions in the most timely and efficient manner, and thus improve or maintain superior team performance.

Similarly, when aggregating and comparing collective measurements from many teams, for example as part of digital dashboards, managers will be able to look at both process changes on individual teams as well as cumulative data for departments and divisions.

This will lead to improvements at the individual team level, as well as cumulative changes across teams as a way of determining management performances. This represents an alternative to reorganizing departments or companies without pre- and post-data in the hope that such changes will improve financial performance. Large scale change is not always beneficial, although it is sometimes necessary for strategic business purposes. Knowing the difference between change for its own sake and change for a specific set of objectives may save companies both time and money and increase shareholder value.

ENDNOTES

1 Hofstede, Geert. "Business Cultures" in UNESCO Courier, April 1994, V. 47, p. 12.
2 Asherman, Ira; Bing, John W., and Laroche, Lionel, "Building Trust Across Cultural Boundaries" originally published in Regulatory Affairs Forum and available online here.
3 The metrics approach used in the cases illustrated in this article were provided through the Global Team Process Questionnaire™, created and utilized by ITAP International.
4 The Hofstede cultural data has been taken from Geert Hofstede, Culture's Consequences: Comparing Values, Behaviors, Institutions and Organizations across Nations, Second Edition. Sage Publications, 2001.
5 Hofstede, page 79.
6 Jones, Steve, and Moffett, Richard G., "Measurement and Feedback Systems for Teams," in Sundstrom, Eric, and Associates, Supporting Work Team Effectiveness: Best Management Practices for Fostering High Performance. Page. 157. Jossey-Bass: 1999.
7 Jones and Moffett, op. cit., p. 159.
8 Quoted in Mathieu, John E, and Day, David V., "Assessing Processes within and Between Organizational Teams: A Nuclear Power Plant Example," in Brannick, Michael T., Salas, Eduardo, and Prince, Carolyn (eds.),Team Performance Assessment and Measurement: Theory, Assessment, and Applications. Lawrence Erlbaum Associates, 1997.
9 Bing, John W. "Developing a Consulting Tool to Measure Process Change on Global Teams: The Global Team Process Questionnaire™" (Page 4), proceedings of the 2001 national conference of the Academy of Human Resource Development and available online here.
10 Bing, op.cit.
11 The dimensions were created based on literature research and factor analysis of questions responses.
12 The database is maintained by ITAP International and is the collection of responses from over 100 teams, many followed through multiple measurements.
13 Bing, op.cit., p. 7.
14 For other examples of the relationship of process and productivity of teams, see Bing, John W., "The Relationship between Process and Performance on Teams".

John Bing is the chairman of ITAP International, a consulting firm with operations in Europe, the U.S. and the Asia Pacific region. His consuiting experience spans the Americas, Europe and Africa and the pharmaceutical, consumer product, information technology industries and United Nations' Agencies. He is the designer of ITAP International's Team Process Questionnaire family of consulting instruments and is developing a new version of the Culture in the Workplace QuestionnaireTM, originally created by Geert Hofstede. He has published papers and provided presentations at numerous professional conferences including the American Society for Training and Development (ASTD) and the Academy for Human Resources Development and recently co-edited (with Darren C. Short) a volume entitled "Shaping the Future of HRD" in the Advances in Developing Human Resources series. Mr. Bing was a founding member of SIETAR (the Society for Intercultural Education, Training and Research). He is a member of the Research to Practice Committee of ASTD and is the recipient of ASTD's International Practitioner of the Year Award. A graduate of Harvard College, Bing received his Ed.D. from the Center for International Education, University of Massachusetts. He speaks Afghan Farsi and is an avid hiker whose goals include hiking to three of Colorado's 14,000-foot peaks each summer.

This article originally appeared in the International Association for Human Resource Information ManagementIHRIM Journal, November/December 2004, Vol. VIII, Number 6.

International Training Program Levels and Types

The programs offered to employees of international businesses today may be categorized according to their levels, or in terms of the tools utilized. Note that the cross-cultural training described in Levels II and III provides participants with a framework that enables them to deal with situations not covered directly in the training, whereas Level I training usually does not.

Level I

These programs offer the "Do’s and Don’ts" of international business, often mixing information about etiquette with advice on what types of business gifts to give and how to best form business relationships in other countries. They also may provide specific information about travel, banking, embassies, etc. These programs are most useful for employees with little or no international business experience. In the words of the old fable, these programs provide people with fish, rather than teaching them how to fish. At the end of these programs, participants have a good idea of how to conduct specific business transactions, but little idea how to generalize to other situations.

Level II

Level II programs teach participants how to fish; that is, they provide analytic tools which can be used to understand the relationship between culture and business. They do this by providing models of cultures based on research in the field of comparative sociology or anthropology. Participants learn to understand social and business transactions by applying these analytic tools, and are often tested through the use of critical incidents or case studies. At the end of these programs, participants are able to analyze general culture-based business transactions to determine how, in a specific culture, the business transaction might be different from the transaction in their own cultures.

Level III

At this level, specific information (typical of Level I) and analytic tools (provided in Level II) are brought to bear on:

1. Specific business problems or opportunities (such as sales or marketing, mergers or acquisitions) within the area of these employees’ professional scope
2. Assisting employees with relocation to other countries
3. Decision-making at upper levels (e.g., where to locate a new plant in a region)

At the end of these sessions, participants are able to apply the analytic tools and specific country, regional, and culture-based information to business problems in their areas of expertise.

Helping Global Teams Compete

In global organizations, every team intervention - from measuring team performance to team development training to other consulting initiatives - needs to consider the dynamics of global teams. The definition of "good team member" varies from country to country. The concept of "effective leadership" may also differ. As a result, global teams sometimes find themselves reconfiguring into national collections of sub-teams - that is, a Japanese subteam, an American subteam, a French sub-team, and so forth - that may misunderstand each other's expectations and approaches.

Cultural values

An underlying cause of the success or lack thereof of global teams may reside in the definition of what it takes to be a good team member or leader. Cultural values play a significant role in these definitions. For example, a French team member may jump in to assist a U.S. colleague he or she perceives is in need of help. Americans, however, generally have a strong desire to act as individuals; thus, the U.S. team member might interpret the French colleague as undermining his or her job by interfering.

Cultural and language differences

In addition to whatever else might be at the root of global team issues, cultural and language differences obviously add to the complexity. It's important to acknowledge those differences up front and create opportunities for discussion of different perceptions. If you're able to leverage these differences, you can improve creativity and add value to your global team.

Miscellaneous interferences

Other reasons may exist for a global team's sub-par performance. Its problems may stem from a specific team leader's approach, a lack of organizational support for the team, or because individual rewards overshadow team success. In such cases, training to build a global team may fail because you didn't know or address the real reason for poor team performance.

Why use measurement?

Global teams, because they represent significant corporate investments, require proactive attention and preventive maintenance, which are always preferable to disaster recovery. A proactive approach - taking the team's temperature periodically - can help identify if and when it needs training and what kind of training.

A proactive approach positions the training professional as a strategic thinker - someone who brings value to the business by detecting problem issues early and preventing them from getting bigger. The training professional becomes a business partner with a bottom-line focus. Measurement techniques using appropriate tools can also help management compare many global teams within the same business sectors, adding to management's capabilities.

Unfortunately, it usually isn't until a problem arises that management calls on the training provider for help. Requests for team development interventions after the fact - after a client already believes that training is the solution - usually means one of two things: The team leader knows he or she needs help, or the team leader may have attempted other solutions without positive results. The leader, or his or her manager, then calls on the training and development professional to provide a solution.

Even if providing team training addresses the problems, it may be at considerable expense to the business. For example, consider the costs associated with time lost on the job. With global teams, add to that the cost of international travel. Business leaders value preventive measures that save such costs.

Instead of waiting to be called on after a problem is identified, use a proactive measurement approach to get useful information on the state of the team. Team leaders can use the same information for self-development. If you provide your findings to the leader and the team, you are training the team on how to interpret information. In that way, team members learn how to analyze and interpret issues, which, in turn, reduces the need for additional development by outside consultants. By sharing team findings and using the ensuing discussion as a team activity, you've already conducted an intervention.

Outside intervention

Using the proactive measurement data, the team can also, if necessary, make its own decision to call for outside intervention. For example, a global pharmaceutical drug discovery team (made up of medical scientists) used an instrument designed to analyze communications and other team functions. They discussed each other's answers to the tool's questionnaire and discovered a disparity of views among team members. By reviewing their answers before proposing an intervention, the team was able to define team issues together. That discussion led to accepting an intervention that addressed the topics on which they agreed they needed help.

Combining team training and leadership development

A global team leader, alerted by low team scores on the topic of understanding roles and responsibilities, decided to use an orientation for new team members as an opportunity to lessen the confusion. In a meeting, the leader asked team members to describe their roles and responsibilities briefly for the newcomers. She combined team training and leadership development and doubly improved the team.

Conducting periodic measurements provides a team and its leader with baseline information against which they can measure changes. They can also use the data to answer these questions:

• Where was the team when it started?
• Where are they now?
• Did the last intervention make a difference? If so how much?
• On what specifically do we need to provide a more focused training intervention?

One size does not fit all

Even when you can resolve team problems by training, one type won't fit all teams, especially global teams. If diagnosed dysfunctions remain after the team leader attempts resolution, it's necessary to provide training on those issues. When neither training nor leadership development works, however, the solution may be a change in team leadership. Working in partnership with business leaders, training and development professionals can help smooth those kinds of transitions.

Proactive, periodic team measurement benefits global organizations by reducing the amount and expense of training and by focusing necessary training on identified problems. Questionnaire results provide a baseline against which you can measure team changes. To develop team leaders, use the questionnaire to identify ways for them to resolve issues in regularly scheduled team meetings. Training interventions that take into account cultural and value differences create stronger global teams. By comparing measures across teams, management improves its oversight and support of such teams.

And, most important, the proactive approach positions training professionals as strategic thinkers committed to improving the bottom line.

John W. Bing is Chairman, ITAP International, and Catherine Mercer Bing is Managing Director, ITAP Americas, in Princeton, NJ, USA.

15 Behaviors and Traits of Great Leaders

KEN SUNDHEIM

FROM PERSONAL BRANDING BLOG

Great leaders have resolve and vision, but are humble about it. They have the company’s ambitions in mind, rather than just focusing on their own internal gain.

The most effective executives don’t accept mediocrity. They can’t accept the idea that good is good enough and they never let others adopt that belief.

To give job seekers – a full perspective on how leaders operate, our sales recruiters have listed 15 behaviors and traits of the best executives.

1. Learn continuously.

Leaders are never satisfied with what they know. On a daily basis, they allot time in order to become familiarized with new business aspects. They understand that learning is the best way out of any trap. Through consistent learning, they have the confidence to try lots of new things, keep those that work and quickly discard those that do not.

2. Listen intently.

Leaders know what questions to ask and understand how to apply those lessons to their everyday life. They partner with people who can do things they can’t.

3. Have the ability to see things from other people’s perspectives.

Truly great executives possess the ability to look beyond their own interests and can consider an issue from every possible angle. They are judgement free when analyzing a situation which affords them the ability to understand complex situations to their fullest.

4. See the big picture.

By understanding the overarching goals of the company, they are able to allot their time to only those activities that forward the organization. Leaders eliminate tasks that need not be done at all and can effectively delegate work that can be done by others.

5. Leaders learn from every experience.

They try new things, take a lot of chances and take time to learn after every defeat or victory.

6. Consistently expand their world.

While most people in corporate America are married to the status quo (i.e. think small and safely), they consistently find new, innovative ways to conduct business.

7. Acquire focused thinking.

By removing distractions and mental clutter, leaders possess the ability to concentrate for extended periods of time and, thus can concentrate on a single issue and think with clarity. Effective executives focus on outward contribution. They gear their efforts to focus on results rather than on work itself.

8. View problems as temporary and surmountable.

One of the defining characteristics of a leader is that they tend to believe that defeat is a temporary setback. Instead of turning setbacks into disasters, they view hurdles as challenges to be overcome and, thus try harder.

9. Effectively deal with disapproval.

Leaders do not allow the approval or particularly disapproval of others to unduly influence them. When they encounter rejection, it doesn’t send them in a downward spiral because they see rejection for what it actually is – simply the opinion of another person who may or may not know what they are talking about.

10. Focus on continually improving their subordinates.

Leaders relentlessly upgrade their team, using every encounter as an opportunity to evaluate, coach and build self-confidence. To the effective manager, every day is about growing people. Moreover, the best leaders care passionately about their people.

11. Have vision.

The leader has a clear idea of what he or she wants to do professionally and personally, and has the strength to persist in the face of setbacks and even failures.

12. Possess self-confidence.

Self-confidence and conviction should be rampant in today’s leader. These traits make a manager bold and decisive, which is absolutely critical in times when you must act quickly. Great executives are comfortable in their own skin which promotes decisive behavior.

13. Leaders have an uncanny ability to energize others.

Positive energy gets other people revved up. They understand that people who energize can inspire their team to take on the impossible – and enjoy the hell out of doing it.

14. Heavy-duty resilience.

Every leader makes mistakes, every leader stumbles and falls. The question is whether they can regroup and then get going again with renewed speed, conviction and confidence. One of the ways that Jack Welch deciphered leaders from followers is that he would look for those who had the wind knocked out of them, but proved that they could run even harder in the next race.

15. Have passion for their job and life, in general.

True leaders know that the goal isn’t worth arriving if they don’t enjoy the journey. They love what they do.

One of the best parts of leading is that you get to become better everyday at your job. Always challenging yourself is how leaders approach their career.

How to Establish Effective Global Transparency Reporting

Posted by Joseph D

When it comes to exchanges of value with health care professionals and organizations, life science companies are faced with a myriad of transparency laws and industry codes. This complicated regulatory environment is predicted to become more extensive in 2014 and beyond, making it important for these companies to understand their reporting requirements and optimize their systems. Many life science companies are taking a global approach to compliance, which is prompting them to improve the efficiency of their data management systems.

Overview of Transparency Regulations

As of 2013, Deloitte notes that countries with laws regarding HCP/O transparency reporting included the U.S., France and Slovakia, but that number is expected to grow in the future. The scope of these laws and the types of transactions they apply to differ between nations. For instance, the scope of transparency laws in the U.S. applies to physicians and teaching hospitals, while in France the scope is larger and also applies to software developers and media design companies. In the U.S., applicable transactions include all payments of value with some exceptions, while in France all advantages are under the jurisdiction of transparency laws, with no exceptions. Also, a number of countries have industry codes for transparency reporting.

Deloitte reports that countries with industry codes or are planning to implement them include:

• U.K.
• Netherlands
• Japan
• Europe
• Australia

Sunshine Act & HCP Reporting Regulations

There are some similarities between the Physician Payment Sunshine Act and HCP/O transparency reporting requirements. Financial exchanges between by health care providers, life science companies and other applicable entities are required to be reported to the government. The agencies involved may differ depending on the types of organizations conducting business, but the principle of reporting financial exchanges is the same. There are also similarities regarding the protection of identifiable information, which health care organizations are bound to do. Safeguarding information is a priority for all healthcare organizations, given the prevalence of data theft and the move to digital medical records.  

Ensure Consistent Data Collection

Data collection is critical for meeting transparency reporting requirements, meaning that efficient data management and storage are a priority. To ensure consistent data collection, life science companies can integrate their computer applications and move to cloud-based IT solutions. By tracking invoices, expense reports, customer records and payment processing with integrated systems, companies can aggregate data quickly and more accurately. Having information stored on multiple servers in a decentralized system only makes it harder to collect data, analyze it and create useful reports. Strengthening IT infrastructure, including the way data is maintained and evaluated, is perhaps the most important step in ensuring consistent data collection.

Streamline Processes for Global Spending Reporting

Streamlining service-oriented processes, including global spending reporting, is possible through quality management systems. Standard operating instructions, process flowcharts and SIPOC Diagrams can be used to identify waste within reporting tasks, leading to process improvement. The fewer delays and defects in the global spending reporting process, the less manpower it will take to meet reporting requirements. This translates to greater efficiency and bottom-line profit, because less direct labor and rework will go into administrative tasks. Also, stakeholders in the reporting process, such as regulatory agencies, will get better information to make decisions with.

Compliance with transparency regulation is a priority for life science companies, because they must adapt to the changing regulatory environment if they are going to survive. A global approach to meeting reporting requirements is something that can help life science companies grow their clientele and revenue streams in the future.

5 Best Practices to Secure Enterprise-Wide Buy-In for Master Data Management

Posted by Stephanie V

 

The benefits of master data management in the life sciences industry cannot be understated; the enterprise-wide MDM approach allows for better communication across departments, ultimately leading to a reduction in overhead cost and significant improvements in overall business functioning. Unfortunately, in spite of the ample evidence suggesting that MDM is the way of the future in the world of life sciences, stakeholders may not be in favor of this approach. Convincing reluctant stakeholders is possible, but it requires thorough research and a compelling presentation littered with case studies and industry-wide analytics. The securing of an enterprise-wide buy-in may be a guaranteed challenge, but the following five best practices should make reluctant stakeholders more amenable to the idea of MDM.

1. Offer a Simplified Explanation of Master Data Management

Master data management may not be a familiar concept among stakeholders. Those unable to understand the basics of this approach are far less likely to approve of an enterprise-wide buy-in. Thus, a simplified explanation may be required before launching into case studies, industry surveys and the like. In addition to explaining the basic concept of master data management, be sure to address the difference between functional and enterprise solutions while highlighting the benefits of the latter option.

2. Address Concerns Related to Data Loss and Redundancy

After learning the basics surrounding enterprise-wide commercial data solutions, stakeholders may voice concerns related to everything from data security to duplicate information. These are all valid concerns and must be addressed candidly so as to appease stakeholders' fears. If a thorough, detailed plan for data security is presented, stakeholders will be far easier to convince of the approach's superior return on investment.

3. Provide Tangible Evidence of ROI for MDM

A general overview of the master data management concept may be necessary at the outset of the presentation, but eventually, shallow coverage of MDM attributes will fail to convince investors of the necessity of a buy-in. Instead, tangible evidence should be used to demonstrate MDM's significant return on investment. This is particularly true if the presentation includes an argument in favor of enterprise-wide master data management. Functional master data solutions tend to be less expensive in terms of front-end implementation; due to the higher expense of enterprise-wide commercial data systems, departments may require incredibly convincing arguments. Instead of rambling on about the benefits of an enterprise-wide approach, let the numbers speak for themselves.

Case studies typically prove most effective in the midst of MDM presentations, particularly if said case studies focus on similar life science organizations. Look for a case study that most closely mimics current objectives, and use it to demonstrate how enterprise-wide buy-in for MDM could deliver impressive results. Consider complementing any selected case study with industry-wide surveys or polls to demonstrate the overall efficacy of enterprise MDM.

4. Target ROI Arguments to Each Department

Although evidence of ROI is absolutely vital to enterprise-wide buy-in success, it is not prudent to replicate the same information for each department. The facts and figures that prove most compelling to one group of individuals may completely fail to capture the attention of other buy-in prospects. Instead, all business analytics should be examined carefully to determine whether they are actually capable of convincing specific departments of the viability of MDM. Although there may be some overlap for certain figures, it is more likely that the presentation will differ slightly for each targeted department. After all, each department is likely to have a different idea of what exactly constitutes an impressive return on investment.

5. Secure Investment From Senior Management

Though the cooperation of every department is necessary for the successful implementation of enterprise-wide master data management; if a particular department proves difficult to convince, it may be prudent to spend more time targeting senior management who could potentially override any objections from other departments. Likewise, all others could approve of a enterprise-wide master data management buy-in, but without the consent of senior management, the opportunity is lost.

Getting company-wide buy-in for your master data management strategy is imperative in order to streamline communicaiton and effectively make sense of patient data for commercial positioning.