Mapping the Organizational DNA:
A System Approach to MERGERS & ACQUISITIONS - PART II
This chapter focuses on the four cornerstones of the Organizaitonal DNA. Mapping of the kind can increase the clarity of purpose and the ways to achieve it tremendously.
By Prasad Kaipa, Ph. D., Thomas Milus,
Kathie Dannemiller and Dannemiller Tyson Associates.
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Cornerstones of the Pyramid
The Leadership cornerstone
Leadership gives direction, clarifies purpose, helps chart the course, inspires commitment and has the capacity to hold the line as well as the intuition to know when to push the limits. Leadership assumes the responsibility for the performance of the whole and is accountable for the production and effectiveness of whole. It helps set the milestones and vision in a way that is attainable. There is tension between asking for the sky and understanding the limits of the earth you walk on. Leadership is about accomplishing the most with what you've got. It can be about envisioning the future and inspiring people to share it and execute on it. It is about the clarity of a vision and the commitment to making it happen. It is about working with existing structures, culture and strategy to provide appropriate mentoring, guidance and clear direction to get the job done.
The Strategy Cornerstone
Strategy is part of the organization’s road map to accomplishment of the vision. It is the overarching plan for realizing the vision. The strategy will eventually contain the goals, objectives, and tactics necessary for success. As we will see below, strategy is intimately connected to structure, leadership, and culture for its operational form. When properly aligned with organizational culture, the organization gains will power and ability to persist in the face of difficult economy, or tough market. When proper Structure is combined with strategy, decision-making becomes clear and effortless in the organization. Leadership provides the direction and their meaningful link leads to clear and shared vision in the organization.
The Strategy cornerstone influences the other three through its purpose –- accomplishment. When Leadership proposes a vision, Strategy responds with its concepts about how the vision might actually come into being. That response can be wildly supportive or pessimistically withdrawn. When the strategy looks for capacity to enable its plans it has Structure and Culture as partners. Structure assists by bringing tactical resources to the table. It can either contribute these when the “mood” is right, or withhold them when the plan conflicts with Structure's perceptions. Culture, on the other hand, brings meaning, value, ethics, enthusiasm, and myriad other gifts to the engine of accomplishment. If Strategy is in harmony with these elements –"all is well"; if not, the potential for success fades.
The Structure Cornerstone
Structure is the explicit container that sets the boundaries for relationships between various members of the organizational ecosystem (customer, employee, supplier, community and competitors). It includes organization charts, accounting procedures etc. The relationships and levels of responsibility in the process of production or providing service are determined by the structures, hierarchy and systems that are established. Structure is a tangible, anatomical equivalent of the body of the organization. Structure determines the types of energy and processing connections (like circulating blood flow) that exist. It creates the communication mechanisms (like the nervous system). Structure determines who is located by whom, interacts with whom, reports to whom, responsible for what, etc.
Governance, motivation, and decision-making are influenced by the organizational structure in relationship with the other cornerstones. Functional relationship with leadership leads to effective governance and so on. Communication between strategy and structure leads to effective decision-making. Aligning the tacit dimensions of culture, the explicit tangible structure increases motivation and morale within the organization.
Structure is often considered inanimate; and, therefore, is a reflection of action rather than an active force. Although the structure can be represented on an organization chart, ledger, or facilities diagram, it still comes down to people. People can be “"handled" or considered,” “"managed" or led,” or “"included" or co-opted.”
The Culture Cornerstone
As one moves from the generic model to actual application, perceptions of the Core Incompetence can carry a negative connotation that is misleading. The incompetence arises as a result of a failure to adapt to demands of other parts of the system, i.e. demands of leadership, strategy, structure, or culture. This does not mean that the element assigned to the Core Incompetence position within the pyramid is itself incompetent; rather that the its perceptions, attitudes, and behaviors run counter to those necessary for accomplishing the system's stated purpose. It is, therefore, the system's Core Incompetence.
Culture is the invisible glue that transmits the meaning of what is present in the organizational field. The culture of a company gives it a character and uniqueness that could be closest to biological DNA. Culture refers to the collection of values, beliefs, behaviors, and attitudes that characterize an organization, which are contained in the stories, symbols, beliefs, assumptions, and values that members share. Culture can be inferred from what people say, do, feel and think within in an organizational setting that is largely tacit and not explicitly defined by rules and structures. It is structurally complex because it consists of large sets of implicit assumptions that cover how employees view their relationships with various environments (customers, suppliers, community, leadership, and each other). In other words, the personality of an organization is represented by organizational culture, and it influences how people interpret information and behave within the organizational system.
Culture determines, to a large extent, what employees see, hear, and feel, and how they respond to each other and the outside word. That is why it is critical to understand and map the Culture when attempting to create success in a newly merged/acquired company. Some aspects of culture can impede or prevent successful change. This impedance is often mani fest a set of behaviors / attitudes that were successful in the past, or perceived to be so, but is now a roadblock to change. It represents the status quo. Many aspects of culture are often invisible to us unless we focus our attention on its influence on the organization. Even then, it can be difficult to see clearly without real work.
Culture is a richly nuanced arena that is ever present in any community. Looking out from the Culture cornerstone one can see Strategy, Structure, and Leadership. Along the will power / sustainability relationship Strategy is informed of Culture's needs for fulfillment in order to engage in the partnership of production. Culture relies on Structure for a meaningful and functional work environment. Finally, Culture needs Leadership to exhibit an executive style that is properly nourishing and respectful of Cultural norms etc.
In this particular application, Culture might be considered a core incompetence. This is not to imply that the culture is incompetent; rather, it considers that the culture carries within it, the capacity, and intention, to take action independent of its leadership. An organization's culture is complex. A proposed change might be seen by the culture as a benefit in one area, but perceived as a threat in another. Maintaining the status quo would be an example of culture acting against leadership's attempts to change. Acting to maintain the status quo may not actually be in the best interest of the system, but might be seen as the right thing by the culture at this time. It is the “heart” of the organization in our model.