7. Putting It All Together—The Business Practices Alignment Method
Chapter Contents
Business Practices Alignment Method
Overview
This chapter shows how the concepts of Business Practices, Right vs. Right, and Outcome Narratives come together. You will be taken on a hypothetical journey back through the BCS integration effort as if we had applied the method in its current form—after the development described in Chapters 4 through 6 (“How to Get to the Right Place the Right Way—Outcome Narratives,” “The Good Thing That Can Cause Big Trouble—Right vs. Right,” and “The Unseen Hand That Propels Organizational Action—Business Practices,” respectively). The benefits, including those gained during the journey, are described. This chapter will help readers understand and distinguish between Tangible Culture and other culture approaches.
Introduction
The three concepts—Business Practices, Right vs. Right, and Outcome Narratives—are valuable by themselves. And they can provide an end-to-end approach through the Business Practices Alignment method—a way to overcome the culture issues that wreck business case assumptions and put initiatives at risk.
Business Practices Alignment Method
The Business Practices Alignment method (BPA) is a logical, progressive approach to culture integration or transformation. It is an end-to-end method that facilitates the entire effort—even if it will require several years.
Figure 7-1 shows the high-level steps for BPA:
1. Identify conflicting alternatives.
2. Craft and reconcile the Right vs. Right alternatives.
3. Consolidate the decisions into a practices charter, and communicate it.
4. Prepare Outcome Narratives, and communicate them.
5. Identify the gaps between current handling and the Outcome Narratives.
6. Identify and prioritize an action plan to address the gaps.
7. Evaluate progress and identify additional actions.
Figure 7-1. Business Practices Alignment method.
Looks robust, you say? Well, it is, and we do not apologize for that. When it comes to culture, quick-fix methods are plentiful, and some one-off solutions may help, but they are far from a total solution. BPA includes sequential steps, yet provides for—and encourages—iteration because significant culture work cannot be completed in one pass.
The process can be likened to a house remodeling project. For example:
1. First, some key decisions are needed about the project, which are similar to identifying conflicting alternatives, reconciling the Right vs. Rights and consolidating those decisions into the practices charter.
Some new rooms may be planned and room functions changed (for example, from bedroom to office), which are similar to executive-level Right vs. Rights.
Detailed decisions, such as flooring and counter materials, cabinet and window styles, light fixtures, and paint colors, are similar to the Right vs. Rights often delegated to middle and lower levels.
2. Next come detailed blueprints. These are similar to the Outcome Narratives.
It is important to indicate how the decisions should be carried out. For instance, when some tiles arrive, the workers can look at the plans and determine where to install them rather than ask the supervisor.
These blueprints help to avoid rework from incorrect assumptions and information. Incorrectly installing the tiles on the floor rather than the countertop will cause both frustration and extra expense to correct.
3. Next, the existing building needs to be evaluated, materials ordered, and resources identified, similar to the gap assessment and prioritized action plan steps.
The building may require changes or repairs. For instance, the electricity may not pass current code or the owner may want to build an observation deck that requires roof reinforcement. It is important to understand the gaps that need to be addressed for the project’s success.
A plan is needed to detail what activities, materials, and craftspeople are needed at what time. Interdependencies need to be identified and everything sequenced to ensure things are ready when needed—not too soon and not late. This is a representation of the prioritized action plan.
4. Progress must be evaluated and, because things will not go as planned, adjustments will be needed. This is a representation of evaluation and the method’s iterative nature.
Water damage may be discovered while removing shower tiles. It must be fixed before the new tiles can be installed. This is like an Outcome Narrative not working as intended and additional work that needs to be done.
While painting the kitchen walls, the owner may notice that the paint is not what she expected, even though everything looked okay in the design center. She likes the general color but wants it to be brightened up a little. This is analogous to a slight adjustment needed in the practices charter.
When ordering the cabinets, some sizes are not available. It is possible to get the right sizes, but only with an expensive custom order. Another option is to reface the existing cabinets instead of replace them. This is similar to a new Right vs. Right that needs to be reconciled.
If assessed, planned, executed, and monitored well, this house remodeling project will achieve its desired effect. However, it will not be a “smooth” process—there will be unexpected issues that require attention (ask anyone who has done it). This is similar to a culture transformation process, and the Business Practices Alignment method provides a practical framework for defining and integrating the work needed for success.
If We Could Do It Over Again
Hindsight is valuable, especially when it becomes learning for the future. IBM is continually acquiring companies, although a purchase like PwCC[1] may not happen anytime soon. However, this learning is applicable to smaller acquisitions, and can help our clients, too. So, let’s journey back and consider how we might have handled the BCS culture integration if BPA had been available to us in its current form. (Remember, we used the approach to help create BCS, and then honed it in IBM Research.)
Remember from Chapter 2, “We Can’t Do This the Traditional Way—IBM’s Acquisition of PricewaterhouseCoopers Consulting,” that IBM acquired PwCC to bolster its business consulting capabilities, brand image, and client relationships. IBM wanted to leverage the best that both companies could bring, and do it globally with 60,000 people in 160 countries. This meant that the effort looked like a merger from the vantage point of those in BCS.
The culture work was performed in a workstream that addressed both Change and Culture, tethered closely to the Communications and other integration workstreams. To be concise, we will narrow our discussion to the culture work and provide some key connection points with other integration components.
“The partnership between Business Consulting Services, IBM Research and all the rich technical heritage of IBM is driving innovation at the intersection of business and technology—innovation we apply to our own challenges, leverage to help clients solve their hardest problems, and in the process, open up entirely new ways of working and a new services culture.”
Ginni Rometty
Senior Vice President, Enterprise Business
IBM Corporation
Step 1. As we made the high-level decisions about whose way to adopt
Without Business Practices Alignment
An assessment was performed to determine which way was best—how IBM’s BIS had performed each function historically, or how PwCC had performed it. The method—“adopt and go”—meant that each organization’s approach was reviewed and one chosen for BCS.
With Business Practices Alignment
After we knew the “adopt and go” decisions, we would have delved deeper, acknowledging that we needed to know the implicit Business Practices and likely Right vs. Right conflicts embedded in the operating preferences chosen. And we would have acknowledged that compromise was not likely to be a sustainable solution because it would not provide an adequate answer to anyone’s needs.
We would have begun the dialogue about Business Practices early, and we would have begun to communicate some known Business Practices for the “adopt and go” decisions to help people understand the new expectations.
Step 2. As we worked to understand what the high-level decisions would entail
Without Business Practices Alignment
We performed an as-is culture assessment to document elements of both cultures as well as surface and assess the key “people” risks we needed to address. We assessed the implications of the culture differences and used the as-is data and the team’s collective intuition to identify the likely gaps and their magnitude.
With Business Practices Alignment
We would have pushed further into the to-be culture using “adopt and go” decisions and Business Practices, knowing we would get back to the as-is culture later.
We would have spoken with leaders, both those helping with integration and others familiar with each company’s Business Practices, to surface and understand the differences and likely conflicts. We would have looked at the Business Practices topics identified in Chapter 6’s Table 6-3 and asked questions such as these:
How are employees expected to perform this work today?
Which current Business Practices will be especially important to BCS success?
What are some difficult problem situations you have seen so far, or believe are likely to happen, within BCS?
From this information, we would have created the following outputs, and communicated them to other members of the integration effort:
Right vs. Right Business Practices that needed to be reconciled
Conflicting Business Practices for which an explicit or implicit answer had been chosen via “adopt and go” and needed to be communicated
Likely problem situations that could be used for Outcome Narratives
Focusing on Business Practices would have helped us express the culture challenge to the executives and members of the integration team through business language and in the context of business transactions. And it would have helped us communicate important decisions more effectively to the employees.
Step 3. As we incorporated the high-level decisions into the to-be culture
Without Business Practices Alignment
A list of to-be cultural dimensions was developed and clarified through a series of decision continuums. The dimensions included client relationships, decision processes, leadership approach, people and development, communications, and financial discipline. The continuum answers were drafted by the Change and Culture team based on the “adopt and go” decisions and the operating principles.
Once drafted, the dimensions and continuums were validated and refined with other integration team members. Although this process enabled others to get involved, most of the information was still at a very high level, so agreement was easy despite the differences surfacing simultaneously in the as-is culture assessments.
With Business Practices Alignment
After clarifying and prioritizing the Right vs. Rights, we would have decided how to reconcile them and who should participate. Because of size, geography, and leadership dynamics (specifically that many BCS leaders were partners/owners in PwCC), it would have been important to collect input from a broad range of leaders. This input would have been used to guide decision makers, and would have helped the Change and Culture team know where significant change issues would exist. Members of the other integration workstreams would have been included due to their in-depth knowledge of the new BCS design.
The selected reconciliation leaders would have been brought together to discuss perhaps 30 Right vs. Right options—ones where the “adopt and go” decisions were not fully adequate to answer how things needed to be done. The decisions would have been identified, and key discussion points documented. This information would have been communicated to the integration team to incorporate into their designs.
Step 4. As we documented the to-be culture and its attributes
Without Business Practices Alignment
We documented the high-level to-be culture and its attributes based on the decision continuum answers, and assessed the magnitude of change. This was helpful, but not “rich” enough for broad communications so it was used by the Culture team, other integration work-streams, and was disseminated to the geography and change leaders only.
With Business Practices Alignment
After Right vs. Right reconciliation, we would have created a practices charter that included outputs from the reconciliation, Business Practices where one company’s approach was selected, and information on what these key decisions meant.
Then the practices charter would have been given to members of BCS through their leaders, and to the integration team (to augment earlier information). We would have ensured the information was communicated broadly throughout BCS because it would have helped everyone to better understand the expectations.
We would have also analyzed the leader input collected before the reconciliation process and used it to help geography leaders and change teams understand their challenges. We would have provided recommendations on how they could best communicate and reinforce the decisions documented in the practices charter.
Step 5. As we clarified what the to-be culture would mean on a daily basis
Without Business Practices Alignment
We created a set of about 80 Outcome Narratives to address problems the Culture team believed were likely to arise. The Outcome Narratives included transition issues (that is, ones applicable for six months or so) and ongoing issues.
With Business Practices Alignment
The Culture team would have drafted the Outcome Narratives, using the list of problem situations collected from leaders earlier and input from other integration members. Two sets of Outcome Narratives would have been created and validated:
For the gap assessment—Outcome Narratives (perhaps 30) that represented key aspects of BCS, selected to include a broad range of working areas.
For communication purposes (a lower priority)—Outcome Narratives about transition requirements and/or responses to feedback and questions received.
The Outcome Narratives would have been drafted at the global level and given to the geographies for refinements. The Outcome Narratives would also have been communicated to the integration team, and to members of BCS through their leaders.
Step 6. As we compared the as-is and to-be
Without Business Practices Alignment
Because we had launched an as-is culture assessment effort right away, we were “stuck” with the information collected. It was helpful, but we then knew many more questions we would have liked to ask but would not get the chance.
With Business Practices Alignment
At this point, we would have compared the Outcome Narratives to corresponding as-is answers. Because two companies were involved, we would have identified two sets of answers: how BIS would have done it, and how PwCC would have done it.
Step 7. As we identified the gaps and decided the path forward
Without Business Practices Alignment
The Culture team prepared a gap assessment using information from the as-is culture assessment and other integration teams. A plan with specific actions was created and status milestones with leaders were scheduled. Outcome Narratives were used as a discussion point in these check-ups, but they were not primary for evaluating progress and identifying mid-course corrections.
With Business Practices Alignment
The earlier comparison of Outcome Narratives to current handling would have formed the basis for the gap assessment. It would have been important to understand the types of gaps for prioritization and planning purposes. For instance:
Does this gap exist for both companies or for one company only?
What is the degree of gap between the two companies in this area?
How big is the gap between what is desired and what is happening today?
We would have prioritized the gaps into a manageable list, with input from various sources such as other integration members, and identified actions to address them. Finally, a project plan would have been created and the actions launched. At the same time, milestones for evaluating progress would have been established.
“The integration of PwCC was a watershed opportunity for IBM Research. Not only did it help enhance our partnership with IBM’s services unit, but it also proved a real catalyst for our efforts to develop a ‘science of services’ in concert with leading universities. Applying the rigor of scientific and engineering approaches to services, we hope to create new technologies, tools and skill sets to help our consultants and clients—we even hope to create the services practices of tomorrow.”
Paul Horn
Senior Vice President, Research
IBM Corporation
At the milestones, an evaluation would have been completed and discussed with geography leaders. The evaluation would have been based on how members of BCS were handling the situations and how this compared to the official answers in the Outcome Narratives. Progress would have been identified, additional actions prioritized, and areas that had earlier been put on hold would have been reconsidered. Each of these evaluation milestones (covering at least two years or so) could have launched the development of new Outcome Narratives, clarifications to the practices charter and/or additional Right vs. Right reconciliation.
Because Hindsight Is 20/20
So, the process we developed for the integration effort was okay, but we now know several improvements that could have helped us. Business Practices Alignment could have
Given us common terminology.
Helped our information collection to be more targeted and better timed.
Given us more “meaty” issues to discuss and decide.
Better clarified our to-be culture and the challenges we would face achieving it.
Provided more useful information to communicate—to leaders, to the integration team, and to members of BCS.
Provided a more objective basis for evaluating progress and determining additional actions.
Benefits
To complex efforts, Business Practices Alignment brings a number of benefits:
It addresses strife, frustration, resistance, confusion, and “change fatigue”—all barriers to productivity.
It helps leaders focus on important business issues, such as addressing customer concerns and leading employees, rather than handling escalations and repeated decisions on the same topics.
It decreases the risk of failure by removing culture barriers and reasons for culture clash, and helps the organization achieve “full functioning” as quickly as possible.
In addition, perhaps Business Practices Alignment’s finest feature is the value generated along the way (which helps justify its robust nature!):
1. Crafting and reconciling the Right vs. Right alternatives
Helps people recognize the sources for issues. As one leader mentioned, “No wonder we’ve got problems—look at the issues on these pages! Seeing them laid out like this is helpful.”
Solicits a constructive mindset, which helps with reconciliation, because all the options are “right” answers.
Builds commitment and helps leaders understand the challenges and their needed role through participation in the Right vs. Right decisions.
2. Consolidating the decisions into a practices charter
Gives everyone the chance to clarify and ensure agreement before the information is communicated. Organizations that fail to perform this step may later find disconnects that cause confusion and require rework.
Provides a helpful reference for employees to use in their daily work. Also, new employees, whether from the outside or other internal positions, need to understand expectations and this information can increase their confidence and ability to perform.
3. Preparing Outcome Narratives
Builds awareness of current issues as well as those likely to crop up, which is the first step in taking actions needed for success.
May uncover additional disagreements early when they are most easily addressed. These disagreements may be because additional Right vs. Right decisions are needed, a misunderstanding exists about the meaning of previous Right vs. Right decisions, and/or there is resistance to the implications.
4. Performing a gap assessment based on Outcome Narratives
Ensures that subtle and systemic gaps are recognized. Often organizations jump quickly into identifying gaps and actions. This may seem proactive and results-driven, but it often leaves fundamental gaps unrecognized and unaddressed. A leader on one such initiative complained, “We’ve changed the process, procedures, measures and incentives. We’ve changed the way we manage this work—I could go on and on. But the performance hasn’t changed. It’s really frustrating.” This indicates unaddressed gaps—probably the subtle ones that can be readily discovered through Outcome Narratives.
5. Developing and prioritizing the action plan based on Outcome Narratives
Makes prioritizing the actions easier. Without Outcome Narratives, decisions may be based on debating capability or organizational clout. Choosing actions based on the frequency and severity of the gaps identified through Outcome Narratives helps to ensure that the most valuable actions will be chosen.
6. Evaluating progress and taking additional action based on Outcome Narratives
Provides a tangible basis for handling the eventual “are we done yet?” question. Historically, this has been a thumb-in-the-air exercise based on high-level definitions, so disagreements are common—as are delays in taking needed action. Using Outcome Narratives as the basis for evaluating progress makes it clear what results have been achieved and where additional work is needed.
Helps to pinpoint specific issues that need additional work through the elements of the Outcome Narratives, specifically the following:
• Are we getting to the right outcome? If not, when, where and why are disconnects happening?
• Are the right people getting involved at the right time?
• Are the people taking action in expected ways, and properly enacting our principles, values, competencies, and so forth?
Conclusion
The Business Practices Alignment method—an integrated approach using Business Practices, Right vs. Right, and Outcome Narratives together—builds on IBM’s lessons learned in integrating a huge and complex acquisition. It is an end-to-end method that can bring tremendous value to companies needing to integrate diverse cultures.
You have seen how we would have tailored Business Practices Alignment for our integration needs. Now let’s move on to how this basic approach can be modified to address a variety of initiatives where culture is important, starting with mergers and acquisitions.