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Can Two Rights Make a Wrong?: Insights from IBM's Tangible Culture Approach

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I really like this book. Easy to read and practical. Many people underestimate the impact of culture clash issues during the planning and implementation of large change programs (outsourcing, acquisitions etc). The book has provided me with a language to talk about culture in a meaty way (without having to use the 'culture' word!) and some tools to do something about it.

When you read this book you know that you're getting insights into the realities and challenges of organizational and cultural change from someone who has been on the front lines. Sara Moulton Reger has harnessed the power of storytelling and aptly applied it to developing a process and context that flat out works. This hands-on approach to gaining wisdom AND gracefully maneuvering a culture transformation is essential for anyone at any level involved in a merger, acquisition or re-organization - large or small, global or local.

Although the importance of organizational culture is evident to me as a change management professional, I confess that I have started to read many books on the topic and have rarely been able to maintain interest passed the introduction. Sara Moulton Reger's book goes beyond the case for dealing with culture: it provides a practical, down-to-earth framework for bringing the challenge of organizational culture to tangible business actions. The book is rich with "real life" case studies that bring the concepts to life. A must read for change management and organizational development professionals.

This book is an excellent exploration of a topic that is usually poorly treated, either by being too academic or too simplistic. Reger and her IBM colleagues dive deeply into concrete techniques for uncovering, understanding and reconciling "cultural" issues that inhibit performance. Written for both practitioners and leaders, Can Two Rights Make A Wrong highlights cultural implications of major changes from mergers/acquisitions to organizational changes across international boundaries. As a global change practitioner, I found exciting methods for successfully managing major changes in the book.

Sara Moulton Reger and her colleagues have done a great service by clearly demonstrating the importance of culture in driving organizational performance, whether that organization is being formed from a merger or acquistion, or is working to implement strategic change and growth. Importantly, they do not fall into the trap of using attributional models, those that attempt to force fit an organization's culture into pre-determined categories. Rather, they treat culture as it plays out in the thousands of daily interactions, the 'way we do things around here,' to determine the norms and behaviors that will guide people in achievement of the organization's business priorities.

Their use of Outcome Narratives, Right vs Right, and other powerful tools, all clearly described, are very helpful for getting people focused on desired ends and agreed ways of achieving them. With these tools, people can avoid having the 'violent agreements' that we have found so often in our work while treating culture clashes.

Mergers are not just a matter of putting two companies together and adding up the profits. The cultural aspects of the two organizations have to be merged successfully, or the blending can be doomed to failure. IBM's merger with PricewaterhouseCoopers Consulting is a prime example of the importance of culture, and the techniques used to combine the companies is explored in the book Can Two Rights Make a Wrong? - Insights from IBM's Tangible Culture Approach by Sara J. Moulton Reger.

Contents:

Section 1 - The Basics: Introduction - An Overview of Tangible Culture; We Can't Do This the Traditional Way - IBM's Acquisition of PricewaterhouseCoopers Consulting; Traditional Approaches to Culture Transformation - How Others Have Dealt with the Challenge; How to Get to the Right Place the Right Way - Outcome Narratives; The Good Thing That Can Cause Big Trouble - Right vs. Right; The Unseen Hand That Propels Organizational Action - Business Practices; Putting It All Together - The Business Practices Alignment Method

Section 2 - The Application: Mergers and Acquisitions - Managing the Common Sources of Culture Clash; Alliances - Finding Ways to Leverage Your Collective Capabilities; Major Restructuring - Gaining Sustained Value from Your Organization; Major Transformation - Addressing Your Plan's Hidden Barrier; Key Decisions and Everyday Business - Extending Tangible Culture Into the Operational Parts of Your Business

Section 3 - The Projects: The Co-operators - Using Business Practices to Clarify Expectations; Sales Pipeline - Using Right vs. Right to Differentiate Issues

Epilogue; About the Contributors; Index

IBM and PwC took a specific approach to merging PwC Consulting into the IBM fold. There were different styles of management and philosophy, one being hierarchical and one being more client-centered. In many cases, neither organization or structure was "wrong" in their approach. It's just that a decision had to be made as to what the desired behavior of the merged entity should be. The Tangible Culture method uses tools and exercises to explore the current state of both cultures, the desired state of the merged culture, and how close the current culture conforms to the end state. This type of approach minimizes the danger of "right vs. right", where two good practices are allowed to coexist or dominate each other without thought as to how they contribute to where you want to be. Using this type of structure to address culture issues in the organization can do wonders to make sure that more mergers and restructurings actually accomplish something.

The book does seem to be a bit repetitive at times, as the application section uses the same charts and format over and over to show how the system can be applied. On one hand, that's good in that it reinforces the message. On the other hand, it all seems to blur together after awhile. It's not a fault of the system, but more a flaw in the presentation and layout of the book. But even with that observation, this is still a book that is worth reading in order to increase the chances that your mergers are not destructive...

Mergers and acquisitions (M&As) are a permanent part of today's business landscape. Firms routinely buy other firms or combine with other companies, or sell off business units to focus on core capabilities. Nevertheless, half of all M&As don't work, often because the companies' corporate cultures clash. IBM organizational change expert Sara J. Moulton Reger discusses how disparate companies can come together successfully after an M&A. She bases her recommendations on the experience she gained in 2002, when IBM acquired PricewaterhouseCoopers Consulting for $3.5 billion. Unfortunately, she does not always explain her story clearly: She tends to bury important points in an avalanche of details, and she never met a buzzword she didn't like. If you can transcend these stylistic infelicities, you will find IBM's approach to this common problem useful, although time consuming. getAbstract recommends this book to executives and managers who are considering or are already involved in M&As.

One traditional approach to culture change at a firm, clarifies the values aimed for, expands these into principles, and links the values to desired behaviors. Other approaches start with a diagnosis of the organizational culture's attributes and characteristics.

Sara Moulton Reger's book Can Two Rights Make a Wrong?1 describes the use of Tangible Culture to transform an organization into an integrated team. The general approach is to focus on problem areas where there are potential clashes between two or more cultural values. The components of Tangible Culture are Outcome Narratives, Right vs Right, and Business Practices.

Outcome Narratives

Outcome Narratives are vignettes that clarify expectations of where the company wants to be. Each story describes a problem situation, preferred outcomes, and the roles for employees in such circumstances. Once constructed, Outcome Narratives are reviewed by stakeholders and become the topics of workshops with many other employees. The employees are encouraged to discuss their differences with the official Outcome Narratives.

Can Two Rights Make a Wrong? contains a more detailed explanation for constructing Outcome Narratives, reference to a useful online template, and a number of examples. Sara Reger recommends that a Tangible Culture is more likely to be achieved when Outcome Narratives are written for a number of substantive areas where there are potential cultural clashes in an organization - look for conflicts in approaches to decision making, customer relationships, leadership, communications, and people development.

Right vs Right

Right vs Right is a method for resolving differences when there is conflict about which of two good business practices to use for doing a particular task. Each method is favored by some employees. When left unresolved such disagreements can slow down organizational process to the point of total seizure, lead to many feelings of discontent and alienation among employees, and result in a general loss of business value from the well intentioned actions of employees.

The Right vs Right process starts by comparing alternative points of view on a 5-point, uneven scale where the mid-point of 3 favors both alternatives equally and options 1 and 5 indicate preference for just one alternative. A rating of 2 indicates that the left-handed alternative is favored more; similarly, a rating of 4 indicates that the right-handed alternative is more desirable.

All participants in a reconciliation session rate all pairs of alternative points of view on the 5-point, uneven scale. These ratings are then combined and discussion evolves in the direction of determining how the organization is going to achieve the most popular outcome. For some problems, the solution is a combination of the previous alternatives. For others, one prior alternative is used in certain contexts and the other prior alternative is used in other situations. Can Two Rights Make a Wrong? contains more details of the Right vs Right process, reference to an online template that aids the doing of Right vs Right, and a number of examples.

Right vs Right helps people define their personal boundaries in the work place. What actions are appropriate when? For example, should customer problems be solved by combining existing procedures or by developing new, customized procedures. Both approaches are favored by different organizations. There are potential conflicts when such organizations merge. These conflicts need to be resolved for the new organization to be successful.

Business Practices

Business Practices are the rules, often unwritten, that employees follow every day - the unseen hand that guides people in their actions - what actually occurs every day. The documenting of Business Practices transforms the concept of culture into something that most business people can understand. Examples of Business Practices: distributing photo-copies of meeting notes, responding immediately to email messages, and making the decision to hire a new employee. How such Business Practices are performed in an organization determines its culture since these actions are based on underlying principles, values, and beliefs.

The initial step to documenting business practices is to ask people in an organization how they handle certain tasks, arrive at decisions, and set priorities. People find such questions much more tangible than questions about values and norms. Sara Reger also warns that employees often have blind spots - areas where what people tell you should happen differs from the stories that they tell.

The documenting of Business Practices gives change agents a grasp of where they are starting - what is the current culture of an organization? A number of questions to ask when identifying Business Practices are listed in Can Two Rights Make a Wrong? There are questions for business topics like accountability, leadership style, and following policies.

Business Practices Alignment Method

An emerging component of Tangible Culture is the Business Practices Alignment Method. It is a way of combining Business Practices, Right vs Right, and Outcome Narratives into a grander scheme which extends over many years. Such an lengthy period of time allows an organization to combine their Business Practices into charters, perform gap assessments that compare the current state of affairs with the Outcome Narratives, and formulate action plans to close these gaps.

The Tangible Culture approach to change was originally used at IBM in their successful acquisition of Pricewaterhouse Coopers Consulting. Right vs Right was developed for resolving differences when a hierarchical organization acquires a partnership, and wants to keep many desirable Business Practices of the partnership.

Later chapters in Can Two Rights Make a Wrong? contain detailed examples of the application of Tangible Culture to many other moments when an organization needs to change - such as the forming of partnerships and alliances, major restructuring, and transforming an organization's mission. These chapters are based on the application of Tangible culture by IBM's Business Consulting Services.

Can Two Rights Make a Wrong? discusses universal problems. It is much more than a sales tool of IBM. It contains many helpful tools to use when changing an organization's culture. It is definitely a book to read by those involved in major culture change.

CAN TWO RIGHTS MAKE A WRONG? INSIGHTS FROM IBM'S TANGIBLE CULTURE APPROACH teaches how to apply IBM's 'culture transformation techniques' to a range of business environments and choices. Learn how to clarify expectations so others thoroughly understand them, how to measure culture change progress in ways others can comprehend, and how to translate common business practices to practical options and applications in the world market.

Diane C. Donovan

California Bookwatch