True test of a takeover

The group of Africans in the room is sceptical. They have seen three different managements in the past and they have seen operational costs going up and productivity going down in recent years. Will this new initiative by the management lead to reduced costs and improve productivity? Is it possible to turn around the company in two years? Would the Indian management be able to work with African workforce and understand their culture? The room was full of questions.

The biggest issue when there is a takeover is how well the new management is able to understand the culture and systemic perspective of the organisation. With such an understanding, we will be able to align and tie the interventions for improvement to business strategy and culture. We need to understand that all organisations are, fundamentally, living social organisms; organistional culture is more powerful than anything else; interventions that focus on the system work and just component-centered interventions usually do not.

My training has been as an ecologist and I tend to look at organisations with my understanding of ecology. The relationship between ecology and business is already deeply rooted in the English language. The common root word of ecology and economy, which is eco, means “house”.

The word ecology means the “science of the house”, and the word economy means the “management of the house”. When we look at an organisation as a living system, we know that attacking that system as if it is a predictable machine and addressing problems in a linier fashion may not work. The organisations’ immune system may begin to develop ways to neutralise the attackers. This is the same way your body reacts to a foreign object. If the intervention is built on the nature and strengths of a particular living social organism and honours the integrity of that organism, the greater the likelihood that the idea will be adopted and integrated into the fabric of that organism. So to change a system, we need to understand the system and the core elements that are working in the system. It is important to keep in mind that we should not destroy the elements that were giving life to the system in the past in the change process.

So let’s see how your intervention is honouring the culture and the system and expanding the strengths that the system already has. Is the turnaround strategy linked with the culture and natural elements of the system? Every system has something that works. That is the reason, the system exists.

By appreciating what works in a system, we will be able to expand it and direct the organisation to a positive future. I am sure this African company would see a turnaround in the coming years once the Indian management is able to identify the core culture in place and treat the organisation as a living systems rather than a predictable machine.

Written by Santhosh Babu
Published in The Financial Express: Saturday, March 17, 2007.