A larger and more sophisticated multi-product company purchased a smaller, patriarchal, non-union, single-product company from the founder. The purchased company was well over twenty years old. The mix of the forty or so employees was about equally divided – predominantly white female employees working first shift in the Administrative side of the business; predominantly Hispanic male employees working first and a smaller second shift in Manufacturing.
Weeks could go by with the white founder never coming onto the manufacturing floor. He delegated manufacturing responsibility to a white manager, who in turn relied 100% on what his bilingual Hispanic foreman told him was going on.
None of the white managers or employees spoke Spanish. A few of the Hispanic employees understood and spoke a little English. Only the foreman was bilingual.
A single door connected the administrative and manufacturing functions, and neither racial group welcomed the other on its’ turf. Employees in both groups were long-serviced individuals and were good at their jobs. There was no talk of unions.
Because the founder discouraged open dialogue to resolve issues, problems were repressed, ignored and festered.
When the purchaser was doing his due diligence, he and his staff focused all their attention on the financial aspects of the company; no one ever thought about assessing the cultural / organizational “fit” of the target company with the acquiring company’s values and management style.
Once the deal closed, the new owner installed as company president a man experienced in business development, but without CEO experience.
SITUATION OVERVIEW:
The new owner believed in open book management and insisted that the two factions share feedback and feelings openly. Because he had never investigated the employee climate, he was unaware that he was opening Pandora’s Box.
In short order, twenty-plus years of repressed feelings, slights, racial and gender insults pushed their way to the surface. People definitely spoke openly and conflict erupted. For the first time ever, there was talk of unions and of filing discrimination suits against the company for permitting a hostile environment to emerge. The company’s community reputation as a good place to work took a nose dive, as did profits as the company’s reputation suffered.
RAMIFICATIONS:
Because Manufacturing was the backbone of the company, the Latino employees were crucial, absolutely critical, to the continued success of the business. And yet, within six months of taking over the business, the new management saw it was disintegrating.
SOLUTION:
The parent company had just brought on a bi-lingual, bi-cultural human resources / organizational development consultant for a six-month contract; I was that consultant. I had met the new president just a few days earlier and he asked me to come help him turn the business around.
METHODOLOGY:
When I undertake an assignment such as this, my first step is to interview the primary stakeholders to gain their perspectives and expectations regarding the ideal outcome.
Once I understood their expectations, I proceeded to gain local perspectives and begin building trust, first by conducting an “Ideal” Visioning exercise with the local president and his executive committee.
Then, over four days, I observed and interviewed all admin staff, and in Spanish interviewed a wide cross-section of manufacturing staff at all levels and on both shifts to gain their perspectives and begin to determine root causes.
I formulated initial impressions on range of organizational issues and reviewed my findings with the company president and then proposed:
• Three Ideal Profile™ sessions involving key managers and supervisors from manufacturing floor and the administrative offices
• During the sessions, the company president’s role was to be like “fly on the wall,” learning about his staff in this new perspective, participating only when necessary to make sure they were open and honest.
ESTIMATED MONEY AT-RISK:
• $ 1M Lost orders because customers were uncomfortable with conflict
• $ 10M Lost business referrals because of customer perceptions
• $ 4M No growth (maintenance of status quo)
• $ 3M Costs of bad press & community relations, employees unwilling to “go the extra mile,”
9-to-5 attitude, active employee disengagement, actively excluding others, failing to act
until crisis, passive/aggressive, bottlenecks and rework due to supervisory “filters”
• $ 2M Potential cost of lawsuits – race, gender, sexism, harassment
• $??M Loss of market share
Total: $20M EST. Minimum
TOTAL INVESTMENT TO RESOLVE PROBLEM:
• $ 1,536 32 man-hours – Initial assessment/data gathering
• $ 1,152 24 man-hours – Facilitate 3 Ideal Profile sessions with 10 participants
• $ 6,608 272 man-hours – Participants
• $ 3,305 32 man-hours – Travel and living for 4 trips (15 days)
Total: $ 12,601 360 man-hours
Preferring to be conservative, I estimate my ROI to have been 1:587.
My intervention lasted six weeks. My immediate objective was to reestablish productivity between two very capable and very different ethnic groups. Longer term, I wanted to lay the groundwork for them to begin merging themselves after I was reassigned to my next project.
With certain private and proprietary information removed for the sake of confidentiality, this graphic shows the before-and-after results of my intervention.
Please note that the information is presented in terms of a standard balance sheet (Assets, Liabilities and Equity) spread across four separate dimensions (Culture, Organization, Political, Employees).
The change is significant. It bears repeating that the company already had within itself the essential foundation to resolve its’ own issues: intelligent , well-trained and competent employees who, at heart, were loyal to the company.
When companies want to survive and thrive, and are heavily dependent upon the work ethic and continued good will and employment of their Hispanic employees, it is imperative that their culture, values and expectations be known and taken into full consideration in all significant business decisions.