In Mergers and Acquisitions, Avoiding Conflict Is a Poor Communications Strategy

In Mergers and Acquisitions, Avoiding Conflict Is a Poor Communications Strategy

From our research at CEB, now Gartner, we know that most mergers and acquisitions are not clear successes. As with other forms of major enterprise change, there are many possible reasons why two companies might fail to integrate: culture clash, product mix-ups, stalled growth, complex technology integrations, and so on. According to INSEAD professor Quy Huy, another reason M&A can fail is because the communication plan is overly positive and too frequently impersonal.

Huy believes that part of the problem is what he calls the “trap of professionalism,” a symptom of modern corporate culture in which negative feelings are suppressed and politeness is overvalued relative to raising constructive tensions that can improve ideas. Additionally, once disagreements bubble to the surface, the response is often more rosy messaging rather than straightforward attempts to discuss and address any issues.

Huy discovered how this dynamic of productive disagreement plays out in the context of M&A by interviewing 73 managers across both organizations involved in an acquisition. At first, both sides were excited by the possibilities of their merger. The acquirer saw value in gaining specialized expertise within its walls and the acquired company was excited about having the resources to take on more ambitious projects. But tension quickly arose, initially due to differences in the philosophy of each organization’s sales strategy, and later due to challenges in IT integration.

The issue wasn’t that these tensions existed, but that they were never discussed or addressed.

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The Best Mentorships and Performance Conversations Don’t Feel Like Burdens

The Best Mentorships and Performance Conversations Don’t Feel Like Burdens

Whitnie Low Narcisse, head of advisory programs at First Round Capital, has run three rounds of mentorships since launching the venture firm’s mentoring program in 2016, bringing together 100 mentor-mentee pairs. First Round Review passes along some of the key lessons Narcisse has learned about how to cultivate a successful mentorship. Her first rule? Don’t call it a “mentorship”:

A little ironic for an article all about mentorship, but nearly all of the mentors we spoke to identified use of the word as the number one reason they were dissuaded or disinclined to talk to someone. It carries some negative connotations with it: it’s a time suck, it implies a very close relationship with someone you may barely know, it sounds like a long-term commitment. Direct asks like, “Will you mentor me?” are a universal turn off. …

To this point, if you’re a mentee sending an ask, you want to be very clear and explicit about why you targeted this person. Do enough homework to briefly explain why you’re looking for guidance relevant to their experience. That way, you don’t have to use the word ‘mentor.’ Instead, you’re inviting them to apply their considerable knowledge on something they’ll find intellectually engaging and impactful. That’s how people want to feel — not that they’re taking on an additional obligation.

Narcisse recommends an approach to mentorship that is formal yet flexible. Mentors and mentees should commit to a series of regularly scheduled meetings, mentees should prepare a focused agenda for each meeting, and the pair should set specific goals together and measure progress—but the schedule shouldn’t be too rigid, meetings shouldn’t feel like lectures or question-and-answer sessions, and goal-setting doesn’t mean homework. Most importantly, mentorship shouldn’t be a one-way street.

Much of Narcisse’s advice can also apply to the challenge of asking someone in a more senior position in your company, especially your manager, for help and feedback in the context of performance management.

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Is Radical Transparency the Future of Talent Management?

Is Radical Transparency the Future of Talent Management?

Most employees say that they want to know exactly where they stand with their employer. They ask questions around how they are doing, how much of a raise they will get, and are they likely to get promoted. The reality, however, is that most employees don’t get that level of transparency: Our research at CEB, now Gartner, finds that fewer than 40 percent of employees say their organization is fully open and honest.

The investment firm Bridgewater is famous for its culture of radical transparency, and its founder Ray Dalio is going public with how he actually achieved that within his company via the publication of his new book Principles. His approach, which he outlines in a TED talk and in a recent interview with Fast Company’s Marcus Baram, is based on the concept of an “idea meritocracy” in which all ideas have the potential to be implemented (or criticized) regardless of who has them. Radical transparency serves that meritocracy by ensuring that everyone is free to speak up to, disagree with, and criticize their peers, their managers, and even Ray himself.

The immediate reaction from many in the HR community is that Dalio’s ideas are interesting, but just too radical to work at my organization. While simply applying his approach in the exact same way might not work, some of the underlying ideas and concepts might well be applicable across other companies.

One of Dalio’s ideas that is getting the most attention is the Dot Collector, a tool Bridgewater uses to have employees constantly provide quantitative scores of how other employees are doing on a close to real-time, always-on basis. HR executives have raised several concerns about this approach. In particular, they are concerned that 1) it can put employees in a fear state from being constantly evaluated, and 2) feedback coming from so many people who have limited interactions with someone can be too inaccurate to be useful.

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How Peer References Make for More Informed Recruiting

How Peer References Make for More Informed Recruiting

When it comes to employee performance reviews, conventional wisdom has pretty much accepted the idea of 360-degree feedback—collecting appraisals from colleagues and internal clients in addition to managers—as a profound improvement on previous standards of evaluation. However, this concept has not yet made its way into the mainstream for recruiting, where data suggests there are benefits to soliciting references from a candidates’ coworkers as well as their managers.

Researchers from SkillSurvey, a company that provides online reference checking, conducted a text analytics study comparing the kinds of comments that appear in job references from managers and coworkers. They surveyed 20,000 references across 5,000 candidates on jobs ranging greatly in level, pay, industry, and function. Overall, they discovered, coworker references provide a very different view of candidates than those that come from bosses.

When looking at areas of improvement, coworkers most often cited issues related to overwork, such as perfectionism and how a candidate handles stress, whereas managers focused more on experience and being proactive. In terms of strengths, managers tended to list task-oriented items such as dependability, independence, and meeting deadlines, while coworker references offered much more insight into the personality of the candidate, focusing on strengths like friendliness, listening, and compassion.

In their Harvard Business Review article summarizing the key findings, authors Disha Rupayana, Cynthia A. Hedricks, Leigh Puchalski, and Chet Robbie conclude:

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The Ups and Downs of Coaching for Low Performers

The Ups and Downs of Coaching for Low Performers

One of the central debates in performance management is whether it is worthwhile for organizations to invest in improving the work of low-performing employees, or whether it makes more sense to focus on high performers and high-potentials. Recently, some major companies have started exploring ways to help low performers remedy the quality of their work, such as Amazon’s “Pivot” training program, launched in January, which provides coaching to employees on the company’s performance improvement plan. At HRE Online, Mark McGraw explores the pros and cons of coaching strategies like Pivot:

“Part of the reason that Amazon or any company might adopt this type of program for low performers is to send a message,” says [Daniel] Stewart, president of Stewart Leadership, a Portland, Ore.-headquartered talent management and leadership development consultancy. “And I have to admit, my gut reaction is that the message they want to send is not necessarily geared toward the employees in the program. They might want to let ‘the street,’ shareholders, know that they value the people who work for them.” …

“The organization is saying, ‘We hired you, therefore we believe you have something to offer,’ ” says Stewart. “That’s a meaningful thing to say, because, if Amazon or anyone else wants to hire someone, they want that person to succeed. So why not invest, as appropriate, in making sure they’re leveraging that person’s ability and potential in the right way?”

Other experts, however, believe that stronger employees should be the main targets of development programs:

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Getting the Best From Performance Ratings

Getting the Best From Performance Ratings

The evolution of performance management is at an inflection point as businesses look for new ways to accurately measure employee performance and give the right kind of feedback to improve it most effectively. Over the past year and a half, many major employers have either abandoned or radically reformed their performance rating systems, moving toward more qualitative and continuous feedback, and in some cases scrapping the the traditional annual review entirely.

The rationale behind these changes has been to engage employees more constructively in the performance management process, but CEB research has cast doubt on whether this really works. Looking at companies that have ditched ratings, we found that less than 5 percent of managers were able to effectively manage employees without them, while getting rid of ratings had a negative impact on the quality of manager conversations, employee satisfaction with pay differentiation, and overall engagement.

Performance management is in need of reform at many, perhaps most organizations, but simply getting rid of ratings doesn’t seem to do the trick. Ultimately, ratings tell employees where they stand in a way that qualitative feedback can’t always match. At TLNT, Natalie Trudel suggests some ways to square that circle, retaining the most useful aspects of ratings but making them more timely, relevant, and specific:

For convenience, the same rating scale is often applied to all areas of an employee’s evaluation; from goals to competencies. This is more often than not a 5-point rating scale (5 – Outstanding, 4 – Exceeds Expectations, 3 – Meets Expectations, 2 – Needs Improvement, 1 – Unacceptable). The problem is that you can’t rate certain evaluation criteria using this scale, and it isn’t fair to expect managers and employees to do so.

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When Is a Promotion Better than a Raise?

When Is a Promotion Better than a Raise?

Sara Bean at Workplace Insight passes along a global survey from Korn Ferry finding that 63 percent of employees would rather receive a promotion with no salary increase than a raise without a promotion this year:

One reason for this, the research from Korn Ferry suggests, is that many organizations are not doing an adequate job of creating clear advancement opportunities for professionals. More than half (56 percent) of respondents who did not get a promotion within the last 12 months cited “bottleneck or nowhere to go” as the main reason. Nearly one-fifth (19 percent) said office politics got in their way of moving up the ladder, and while 39 percent said they did receive a promotion within the last year, less than half (45 percent) said they expect to receive a promotion in the coming year. Also, 84 percent said that if they were passed over for a promotion, the No.1 action they would take was to identify the reason and work to improve. The vast majority (88 percent) said that if they wanted a promotion, the No. 1 action they would take would be to have a conversation with their boss and identify growth areas that would enable them to move into the next role.

This finding seems consistent with something we at CEB observed in our study on high-potential strategies last year: HIPO engagement depends more strongly on these employees’ satisfaction with their skill development and career progress than on satisfaction with their compensation. Indeed, failure to provide the right progression opportunities can increase HIPO turnover risk by 15 percent.

(CEB Corporate Leadership Council members can read the full study here.)