An estimated 8 out of every 10 mergers fail to produce the value they promise. Talk about risk. For acquiring companies, the excitement is almost always about where they are going—that is, their strategy for gaining greater growth and productivity. But when mergers fail, it’s often because no one focused on who they are—that is, their culture, which is critical to successfully bringing different groups of people together.
Unfortunately, that same one-sided focus exists within many organizations. The result? Many businesses find their culture organized around a dangerous fault line known as us and them, with executives on one side and employees on the other. The divide is both real and expensive. According to the Gallup-Healthways Well-Being Index, some 52 percent of the U.S. workforce characterized themselves as not engaged during the first half of 2012. An additional 18 percent were actively disengaged. Gallup estimates the cost of this divide at $300 billion annually.
Therefore, perhaps the most important merger that leaders can pursue these days is internal. It’s the merger that enables executives and employees to act as one by considering a two-sided ledger of strategy and culture—and making sure to get the culture piece right.
This effort must begin with an honest assessment of the starting point. For example, Deloitte’s recent "Core Values and Beliefs" survey revealed a wide gulf between the priorities of executives and employees.
Take a closer look and you’ll see that the factors executives consider most important—financial performance, competitive compensation, and business strategy—are tangible and easily measured. Why? Maybe because executives feel so invested in the company’s success. They want positive indicators to confirm that their efforts have the organization on the right track.
Interestingly, many of the factors employees found most compelling were intangible—regular communications, access to management and leadership, and values and beliefs. The takeaway? Without positive indicators to confirm that their efforts contribute to success, employees can drift and become distant, disaffected, and ultimately, disconnected.
So how do we get to we?
First, know your why.
Employees today are looking for a purpose to their work that is easily stated, outwardly directed, and makes a real difference. Getting to we, therefore, begins with knowing your why. For exceptional organizations, profit is not confused with purpose. Why is an unambiguous statement of higher calling that transcends the profit motive. Profit becomes a by-product of purpose.
There are many great examples. Ecolab provides water, hygiene, and energy technologies and services. Yet the sense of purpose Ecolab has defined for itself elevates one of its more humble work activities, sanitizing airport restrooms, into an expression of its higher calling to "make the world cleaner, safer and healthier—protecting people and vital resources." Another example, Starbucks, is about much more than serving a consistently great cup of coffee from Bayonne to Beijing. Starbucks’s why addresses the dignity of human labor, preserving and enhancing the environment, and improving working and living conditions in coffee-origin countries.
What sets these and other exceptional organizations apart is that once they know their why, they embed it into their operations so that it becomes their how—a corporate signature instantly recognized as a unique, branded way to get things done. Transforming why from aspirational to actionable is a turning point in every organization’s journey to become exceptional. When they reach that milestone, their customers see it and their employees feel it.
Defining, embedding, and living core beliefs set the stage for executives and employees to connect. Through actions that consistently convey who we are and how we act, executives can inspire employees to believe in the organization’s values and buy in to its brand. When employees join executives in truly owning the responsibility for business success, an exciting new sense of teamwork takes hold.
Get up close and personal.
A business may want its culture to be enlightened, cutting-edge, and networked. However, my message here is incredibly retro. Like leadership, culture is a contact sport. The leaders of exceptional cultures express theirs at close range, within touching distance, rather than mail it in from afar through tools like social media. In fact, leaders who rely solely on social media to build culture may widen the divide between themselves and employees, rather than narrow it.
Deloitte’s survey found that while nearly half of the executives we polled said social media has a positive impact on workplace culture, less than one-third of employees agreed. In addition, more executives (41 percent) than employees (21 percent) believed that social networking helps to build and maintain workplace culture.
Our survey indicates that the norms for cultivating culture remain intact despite social media’s growing use. Like anyone else, employees want to be engaged through more than executive shorthand. Traditional forms of culture building that are direct and personal—such as mentoring, face-to-face interaction, and robust, specific feedback—can create profound levels of trust and commitment.
I believe that’s true regardless of your business. Consider two organizations—Zappos.com, the online shoe and apparel company, and the United States Marine Corps. At first glance, they couldn’t appear any more different. At Zappos.com, the culture is all about being yourself. At Parris Island, the culture is all about becoming a Marine.
But upon closer inspection, both organizations truly understand and appreciate the power of their cultures. In fact, the similarities between them are great. At the heart of each beats a well-defined set of core beliefs that its people are required to live and honor. Training teams provide intensive instruction about their cultures—delivered one message, one value, and one behavior at a time. Hiring involves extended training, with an emphasis on cultural fit. Those who don’t fit don’t join. For both organizations, culture-building is an in-person, hands-on process of defining, embedding, connecting, believing, belonging, and owning the identity of an elite organization. Their culture and their unwavering commitment to serve is the reason for their being – and the basis of their sustained excellence.
For executives and employees alike, getting to we is a merger that will yield great value—and a destination well worth the journey. It requires a clearly stated purpose, values and beliefs, as well as regular and candid communications from leadership up close as well as from afar.
Just ask any exceptional organization—or your local Marine Corps recruiter.
Punit Renjen is chairman of the board, Deloitte LLP.
[Image: Flickr user Raúl Hernández González]