I’m working with a client on a transaction in one of the larger markets in Asia. As often happens, the chance to work with some highly motivated and able individuals leads to some new ideas. Whilst in a team meeting, this model came to my mind and I wanted to share it with you.
The challenge for any organisation in an acquisition is to understand what the triggers / levers are for creating change and integration within the acquired business. There is a tendency to resort to what works in our environment and try and implement using that approach. More often than not it doesn’t work because the triggers are not the same in the business you’re trying to integrate.
Let me try and illustrate this using the dimensions of Policy, Process and Practice. A few definitions first:
Policy: A centrally agreed set of rules / regulations which relate to the key decisions which the business needs to make. Often policy is more about the non-negotiables for example health and safety, quality, procurement, expenses etc. and is therefore more a description of what’s not acceptable rather than acceptable. However, for global businesses through the delegation of authority, we increasingly see policy as being a key element behind decision making. Reflecting this, policy is a dimension which is becoming increasingly tactical in its deployment.
Process: A granular set of methods on how to deliver certain core activities, increasingly linked to technology and automation. If policy is at the macro level, process can often be at the meta or even micro level of business activity and many consultants’ careers and businesses have been formed out of developing ‘fit for purpose’ processes…many of which have turned out to be less than that!
Practice: The way of working in an organisation. Beyond the formal structures of organisational structure, delegation of authority and KPIs, how do things actually get done in the business? This is a much more challenging area, combining business and national culture, human behaviour and leadership style in an iterative, messy and mostly intuitive manner. Hard to understand let alone describe.
Now here’s the conundrum…for many multi-national companies, the perception of these three dimensions is that they look like this, and if they don’t, they should:
The policy framework leads to an aligned set of processes which creates a set of practices. Now there are some cases where that is the case….but in many companies I’ve worked with, it looks more like this…and maybe I’m being a little generous with the degree of overlap!
Next week I’m going to deal with the implications of this mis-match and what to do about it.