Whipping down the streets of Washington D.C. in a taxi, I was dreading my arrival at a recent business acquisition. I mistakenly believed that my organizational design role was to break the hearts of these leaders. Twenty years earlier, they had founded a company in their garage and now they had made it big, having been purchased by a Fortune 100 company. I erroneously thought that my role was to deliver the news that their small company ways of doing things would now have to completely change. They would need to assimilate to the mother ship!
I glanced down at the final piece of research I had gathered in preparation for this meeting. It was the Ichak Adizes model of an organizational life cycle (Ichak Adizes, www.adizes.com, 2017). This holistic and intuitive approach fundamentally changed how I approach recently merged companies, as well as how I engage with all smaller entities within larger organizations.
The Adizes model of an organizational life cycles provides a metaphor for viewing the stages of organizations. Adizes wisely observed that the basic principles for managing organizations as they mature are similar to living organisms. We have all exclaimed in frustration at some point that managing our staff is like trying to deal with a bunch of unruly kids. Adizes took this statement usually made in jest to a whole new level!
Adizes pointed out that the predictable and repetitive patterns of behavior that humans experience as they grow and develop are similar to what organizations experience. As a result, just as you develop ways to help your teenager move from adolescence into adulthood, you can leverage similar strategies at an organizational level. One can reflect on the characteristics of the organization at each stage and, more importantly, identify prescriptions that will assist the organization to move to the next stage. This model, metaphorically, allow long standing bureaucratic organizations to detour and in some cases even avoid death.
The organizational implications and lessons that fall out of Adizes model are wide and deep. However, my main concern was that I was about to be dropped off at the door step of the founders of the small company that we had recently acquired. Wasn’t there a more positive message that these leaders should hear as we become the same company, working towards the same goals? This is where Adizes learnings about why large mature companies buy small growing companies is invaluable.
Adizes maintains that the large bureaucratic companies desperately need the small innovative companies in order to grow and stay alive. While established companies often times have a great deal of cash and strong financial statements, they have many factors working against them. Adizes points out that they tend to:
- Be interested in reducing risks
- Reward employees who follow directions versus innovate
- Value uniformity and consistency
This push towards maintaining the status quo is exactly what brings down many of these organizations.
Enter the newly acquired kid on the block… These small nimble organizations typically offer growing technology in new markets. And most important, they have flexible ways of thinking and working, quickly embracing new strategy. This provides an agility injection into the staid bureaucratic organization.
Based on this line of thinking, you can probably guess the end of the story. I did inform the founders, who it turned out still acted more like teenage rebels than leaders, that I would be helping them introduce more structure and control. They understood that this was an important part of their growth and development.
However, the larger, more amplified message was that our now combined companies needed their innovative products and new markets. And most importantly, we needed to tap into their agile approach of doing business and infuse some of that bias for action into our increasingly unadventurous culture.
I had falsely believed in a compliance focus in working with newly acquired companies. I was all about sticking pins into them for their own good. Adizes helped me realize that the actual opportunity lay in bottling up the innovative thinking and approaches that the smaller companies offer and infusing them into the larger bureaucratic culture. This strategy offers big wins as the ripple effect positively impact a hundred times more employees than are housed at the acquisitions.
In the years following my mergers and acquisition role, I have applied the Adizes approach in working with all types of small, innovative departments and teams within larger organizations. As I help these groups grow and accomplish their larger objectives, I make sure to avoid squashing their agile thinking and approaches. In fact, I help them find ways to capture these innovative approaches and embed them into the larger organization.
With mixed results Americans spend millions of dollars a year on products which claim to help us stay young. The Adizes approach offers a tonic that really does allow old dying organizations to reclaim youth!
Note: The views expressed in this blog are my opinions and do not reflect the views of my employer.