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Archive for the ‘Management Consulting’ Category

Bath Towels and Marketing

Posted by Raunak Mahajan on December 20, 2013

Seen in my hotel bathroom in Mauritius:

Before putting away the towels for wash think of the large amounts of detergents that go into washing them and the millions of such pollutants entering our waters.

A similar message in my hotel bathroom in India:

Millions of liters of water are used daily in washing bath towels. Put the towels away for wash only if you think they need one. Help conserve water.

I find the above two statements beautiful examples of using behavioral science in putting across messages that are effective. In Mauritius, there is water aplenty. It is not the scarcity of water that concerns people, but the pollution of this natural resource that they hold dear. In India, the depleting water levels are a major worry and wastage of water connects better with the locals. Pollution is secondary because no matter how the water is, we can somehow clean it. The primary focus is the presence of water.

A Marketing Manager would normally duplicate messages across different geographical regions. A Real Marketing Manager would study such underlying differences and tweak the message accordingly. I guess that’s the difference between Good and Great!

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Posted in Management Consulting, Travel | Tagged: , , , , , , | 6 Comments »

New Business Book Now Available Now in Paperback

Posted by Raunak Mahajan on November 26, 2013

Highly recommended reading! Its a rare opportunity to gain real life wisdom from John’s rich corporate experience. There are no cliches in the book. What John shares are truly ingenious concepts that are refreshing.

John R Childress . . . Rethinking

LEVERAGE: THE CEO’S GUIDE TO CORPORATE CULTURE

JUST PUBLISHED IN PAPERBACK ON AMAZON

book and picture

Few concepts in business contain so many powerful truths, and at the same time so much crap, as corporate culture.

35 Years of Asking the Hard Questions and Searching For Answers

“Experience isn’t the best teacher, it is the only teacher!”  Albert Schweitzer

Inside this new book you will find my views on corporate culture after 35 years of working with senior executive teams and global organizations on the role of culture and performance.  Along the way I have searched for and found answers to some of the hardest culture issues:

  • Do you know why most culture change programs fail?
  • Do you know why Culture Statements and Value Statements do more harm than good?
  • Do you know how corporate culture is built?
  • Learn about one of the most successful culture changes that didn’t start out as a…

View original post 371 more words

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Altruism and Organizational Behavior

Posted by Raunak Mahajan on July 9, 2013

I enjoy exploring evolutionary explanations for our behaviors. One such fascinating characteristic displayed by human beings is altruism. On an individual level three explanations have been propounded. “The kind of process, where animals help promote the survival and reproductive success of their relatives, is known as kin selection.” Outside relationships reciprocal altruism exists. It thrives on hope for a return of the favor and trust in the sincerity of the receiver. A third explanation for altruism is mutualism where cooperation yields results that individual endeavors fail to achieve.

It is at group level that altruism becomes more intriguing and certain explanations present key lessons for organizations aiming to strengthen teamwork and solidarity among their employees. Evolutionary biologist David Sloan Wilson and philosopher Eliot Sober argue that, “..under certain conditions, it is possible for animal groups to function as the vehicles of selection, where the animals that make up those groups evolve traits that help increase the survival of the group at the expense of other groups or individuals. One of the most crucial conditions to be met is that there must both be competition between individuals in different groups and competition between individuals in the same group….it is crucially important that groups are in competition with each other and not isolated, each living on its own ecological island”.

Organizational-BehaviourIt is easy to see how such an argument can be used to foster constructive competitiveness among different departments/teams in an organization. I manage a manufacturing unit that houses four different production units, each employing around 35 workers. Until recently they worked as “isolated islands”. Each unit was accountable for production actualization with minimal wastage. Quarterly reviews were held with unit supervisors in “isolation”. To keep workers motivated, best performing workers from each unit were rewarded for their efforts.

A couple of months back, I decided to change things. We put the four units in competition with each other and removed the barriers that we had developed between them. The production teams now compete in monthly ‘5S” and Attendance competitions. We no longer reward individuals in the units, but the entire unit team. Quarterly reviews of the four units are held in the presence of representatives of all units. Analytic charts comparing performances of the four units are drawn and their contribution to the company’s top line and bottom line discussed.

While it is too early to judge the outcome of the change, positive signs are visible. Overall attendance of our organization has seen a 12% increase. Unit supervisors have observed stronger camaraderie among the workforce and wastage/defects levels have come down significantly.

While most organizations focus too heavily on dynamics within a team, better results can be generated by adding an external stimulus, an external threat or competition to the team. This will cause team members to evolve behaviors towards each other that will enhance the overall performance of the team.

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Doing Business Abroad: Cultural Differentiator

Posted by Raunak Mahajan on March 7, 2013

Here is an interesting piece from “Breakout Nations: In Pursuit of the Next Economic Miracles” by Ruchir Sharma. It highlights a very subtle yet significant difference between two types of nations/societies, the “high context” and the “low context”. An important lesson for corporates looking to expand business across the globe.

Both India and Brazil are “high context” societies, a term popularized by the anthropologist Edward Hall to describe cultures in which people are colorful, noisy, quick to make promises that cannot always be relied on, and a bit casual about meeting times and deadlines. These societies tend to be family oriented, with tight relationships even beyond the immediate family, based on close ties built over long periods of time. In an environment this familiar, there is a lot that goes unsaid- or is said very briefly-because values are deeply shared and much is implicitly understood from context. The spoken word is often flowery and vague; apologies are long and formal. “Low context,’ in contrast, describes societies like the United States and Germany in which people are individual oriented, care about privacy, and are more likely to stick to timelines and their word. People tend to be on the move, to have many brief relationships, and thus rely on simple, open communications and codified rules to guide behavior.

Business is not just about numbers.

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To think outside the box…

Posted by Raunak Mahajan on February 23, 2013

stepout

…step outside the box.

I have seen several senior executives repeatedly urge their employees to think outside the box. A million minutes each year are spent in meeting rooms to cultivate this thinking in a company and its approach. Sadly, the outcome in most instances is limited to a few momentary flashes of brilliance and then a return to routine.

Most members of leadership teams fail to realize that simply urging their employees to stretch their imagination is just not enough. It is equally important to reveal to them what the ideal state looks like. I cannot expect the manager of a production line in India to meet the expectations of a customer in France unless I have established a channel of communication between the two.

The Innovation Circle at one of the companies I worked with was immensely fruitful. The key to their success was the exposure that the company provided to its employees. Every month, trips were arranged for the line operators. While some of the visits were to other factories in the district, others were fun excursions to neighboring tourist hotspots. The idea was to step outside the factory and expose our senses to something other than the sight and sound of our factory. There was something to be learnt from everything outside. And that learning reflected in the cost reduction and innovation projects that the workers implemented back at work.

The same applies to senior executives. They cannot evolve and innovate until they keep themselves informed about the changes occurring in the business eco-system around them.

No radical change in thought or approach inside is possible without witnessing an equally radical change outside.

To think outside the box, step outside the box.

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Mixtape

Posted by Raunak Mahajan on February 16, 2013

seven

“…most people, when in prosperity, are so over brimming with wisdom (however inexperienced they maybe), that they take every offer of advice as an insult, whereas in adversity they know not where to run, but beg and pray for counsel from every passer-by.”

Benedict de Spinoza, A Theologica-Political Treatise

While Spinoza traces the root of superstition in fear and despair, I couldn’t help but realize how often the above situation plays itself out in the corporate world. While some foolhardy, egoistic CEOs find it demeaning to consult their team members, those on the other end of the spectrum lose sight of the solution in search of way too many reassurances. A true leader is a good assessor of his own judgement and knows where to seek counsel when he lacks the ability to make the right call himself.

On the topic of similarities in geographically separated cultures, here is another one. In Vedic Astrology, every person’s life assumed to be 120 years) is divided into  9 unequal phases, each phase ruled by a planet. One of these phases is ruled by Ketu and has a duration of 7 years. This phase is characterized by the person being stripped off his or her material comforts and being left with the bare minimum required to survive. A seven year period where the person may struggle financially, the material outflow being more than the inflow. Seven years, the duration of the famine in Egypt, stated in Genesis.

Posted in Management Consulting, Philosophy | Tagged: , , | 6 Comments »

[Repost] Management Consulting 101:Have a Problem, Google It!

Posted by Raunak Mahajan on February 14, 2013

I used the phrase “Google it!” twice at work today. Each time I was asked information that could so easily be accessed on any online search engine. So here’s a repost of one of my earliest thoughts on this blog:

This advice goes out to everyone out there doing anything, anywhere. If you have a problem, Google* it! Chances are that many on this planet have faced the same or similar problems and have shared the solutions online. It will save you a lot of time you would otherwise spend banging your head against the wall.

And Management Consultants in particular need to follow this approach. Lets face it, given the nature of capitalism, there are only a finite types of problems in the world. And most of those problems have been tackled and details posted somewhere online in the form of a case study. So the approaches to problem solving are limited and out in public domain. The real value addition lies firstly, in identifying the unique parameters that influence the process in which the problem lies, secondly, innovation in the form of tweaked derivative of an existing solution for the problem at hand and finally, implementing the solution in the unique Eco-system that the problem belongs to.

E.g when manufacturing moved to China, the management there faced production issues that were faced by factories in the United States in their infancy. The new problems were not new in nature but new to the Chinese Eco-system. The solutions that were implemented were derived from US factories and tweaked to adapt to the new environment.

There is no shame in incorporating Googling* as your first step of problem solving. It saves a lot of time and lets you use more of your grey cells in the real value addition.

*Googling refers to the act of searching. This could be both online as well as offline.

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Your partner is a Capitalist too!

Posted by Raunak Mahajan on February 3, 2013

outsourcing

“If you know your enemies and know yourself, you will not be imperiled in a hundred battles… if you do not know your enemies nor yourself, you will be imperiled in every single battle.”

Sun Tzu, The Art of War

In present day world of business globalization, it is equally important to know your “friends” or “partners”.

The past decade has seen an explosion of cross-cultural joint ventures and partnerships as corporations headed to developing countries in search of cheaper labor and a potential market. One of the many vehicles of entry being used is Contract Manufacturing (CM), a quick and low cost way of entering a new market. Unfortunately, CM doesn’t come without its inherent risk, that of being taken for a ride by the local manufacturing partner.

What many companies fail to recognize is that partners in new markets are Capitalists too and they too are in it to maximize profits. Their incentive to stray off the ethical path is strong, and many local companies fail to resist the temptation. In corruption ridden developing nations, statutory compliance is merely a piece of paper signed by a bribed authority. It is impossible to detect by carrying out a day long audit. Entrepreneurs have mastered the art of passing every audit under the sky. Another art that local businessmen have become proficient in is “cover up”. Manufacturing units that in routine business look like hell, get turned into 5 star facilities when there is a client visit. Having a third party conduct due diligence is just not enough. You have to know your partner yourself, not from second hand information.

So if you are a company that is looking to expand operations into a developing country, know your local partner. And the best way to know your partner is to be close to him. While I am in favor of reducing capital costs by sharing machinery and facility with a local partner, I firmly believe that leadership and management should not be outsourced. Have your own hands and feet on the ground. Recruit your own local team that works closely with the local partner. Run your partnership like a marriage and not a long distance relationship.

You can occupy new territory with leased weapons, but you cannot hold it with leased soldiers.

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If it sounds good, then it must be true – A Symptom of Denial

Posted by Raunak Mahajan on January 24, 2013

Denial is a dangerous state of mind. And most recently I have seen some of the best “leaders” display it.Much to my dismay.

Management consulting is a wonderful experience. I am usually called when something is either going wrong or is already in the pits. And many times it is too late. I wish people called me during there good times instead, because it is then that lasting improvements can be seeded in an organization’s working. I often mention Genesis 41:54 and how Joseph’s plan saved Egypt. In the corporate world it is even simpler. Preventive measures can keep the “famine” away forever. And these preventive measures need to be undertaken during good times.

We live in a world that bombards us with data. True data and false data. All conceivable calculations and estimations are presented to analyse trends and strategize businesses. However, sometimes excessive data is injurious. Especially during times of crisis. And this effect is amplified when the decision makers enter a state of denial. In such a state, people tend to look at data that conforms with their plan of action, no matter how wrong that action is.

If it sounds good, then it must be true. If the data presented to them justifies their ill-planned actions, then the data must be true. If the data does not agree with their plan of action, then it must be false. Alas! Denial is an easy state to slip into. It makes us see things the way we want to see them and not for what they really are.

Antidote:

Do not put the cart before the horse. Do not plan actions before analyzing data, both subjective and objective. Pre-conceived ideas and actions corrupt our analytical appreciation and interpretation of reality.

As always, comments welcomed.

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My management lesson for the day

Posted by Raunak Mahajan on January 9, 2013

Civilizations may be likened to mountain ranges, rising through aeons of geologic time, only to have the forces of erosion slowly but ineluctably nibble them down to the level of their surrounding. Within the far shorter time span of human history, civilizations, too, are liable to erosion as the special constellation of circumstances which provoked their rise passes away, while neighboring people lift themselves to new cultural heights by borrowing from or otherwise reacting to the civilized achievement.

McNeill, The Rise of the West

I find McNeill’s thought very universal. It can be effectively applied to a company’s growth in a competitive market. Market leaders need to realize that “circumstances” which provoke their rise are destined to pass away. Competitors will sooner or later, by either “borrowing” or “reacting”, nullify that advantage. There can be no stronger case against complacency. Continuous innovation and improvement is an eternal truth. Accept it or quit the game.

Posted in Management Consulting, Philosophy | Tagged: , | 5 Comments »

The Company That Can Never Collapse: Universal Bailout

Posted by Raunak Mahajan on August 25, 2012

 

Many of us hate its founder’s guts. A lot of us dislike its aggressive tactics. Several mocked its IPO pricing and many more have a grin when they look at its current share price. A few million are ruing the fact that they bought into the fairytale story, a bunch of analysts are earning their livelihoods bashing the company day in and day out.

 

Tons have played with the idea of removing themselves from the company’s inventory, another million have tried an alternate, but realized that nothing matches the real deal.

 

It is a company that bundles our thoughts, our life patterns and interests into a beautiful product and sells it to advertisers who in turn wish to sell us more things. The only company that gets its raw material free of cost and spends a pittance in processing it into a finished good.

 

And yet, Facebook is a company that will never collapse, we won’t let it. It is too important for the well being of humankind. Without it, we would suddenly be filled with extra hours in our days that we wouldn’t know what to do with. We would come face to face with friends and not know how to deal with them. We wouldn’t know what to do with the scores of digital images on our cameras. Auxiliary industries worth billions of dollars will face extinction. Life as we know it would cease to exist.

 

The Armageddon will unite the world in bailing out the company that can never collapse!

 

 

 

Posted in Management Consulting | Tagged: , , , , , , | 4 Comments »

Management Consulting 101:Have a Problem, Google It!

Posted by Raunak Mahajan on July 24, 2012

This advice goes out to everyone out there doing anything, anywhere. If you have a problem, Google* it! Chances are that many on this planet have faced the same or similar problems and have shared the solutions online. It will save you a lot of time you would otherwise spend banging your head against the wall.

And Management Consultants in particular need to follow this approach. Lets face it, given the nature of capitalism, there are only a finite types of problems in the world. And most of those problems have been tackled and details posted somewhere online in the form of a case study. So the approaches to problem solving are limited and out in public domain. The real value addition lies firstly, in identifying the unique parameters that influence the process in which the problem lies, secondly, innovation in the form of tweaked derivative of an existing solution for the problem at hand and finally, implementing the solution in the unique Eco-system that the problem belongs to.

E.g when manufacturing moved to China, the management there faced production issues that were faced by factories in the United States in their infancy. The new problems were not new in nature but new to the Chinese Eco-system. The solutions that were implemented were derived from US factories and tweaked to adapt to the new environment.

There is no shame in incorporating Googling* as your first step of problem solving. It saves a lot of time and lets you use more of your grey cells in the real value addition.

*Googling refers to the act of searching. This could be both online as well as offline.

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The Key To Conquest: Surrender

Posted by Raunak Mahajan on July 23, 2012

Sir Francis Bacon (1561–1626)

“Nature cannot be commanded except by being obeyed”- Francis Bacon, Magna Instauratio

The underlying message urges pursuit of learning the laws of nature in order to master her. The same postulation can be extended to our daily lives. Whenever we wish to accomplish or achieve something, the first step should be to immerse oneself into the essence of that object and learn as mush as possible about it. Only then will we succeed in conquering that which eludes us.Here are some examples,

  • To win over an enemy in battle, the strategist delves into the mind of the opponent. To do this, one must condition one’s brain with information that has molded the opponent’s thought process. Only then can the enemy’s move be preempted.
  • To solve a management problem, in-depth analysis into the parameters that drive the process is a must. Without gaining an understanding of the sequence of events that lead to a problem, the solution can never be arrived at.
  • Before designing a marketing campaign, the marketing consultant must literally live the lives of the target audience. Statistical Data that does not involve emotional factors is pretty shallow.
  • Next time you rebuke your child, try to peek into the mind of the little one and evaluate the circumstances that led to the child’s actions.

In short, to conquer or overcome someone or something, become one with that object. The rest will be a cakewalk.

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Philosophy-Science-Art-Business

Posted by Raunak Mahajan on July 22, 2012

The opening page of Spinoza's magnum opus, Ethics

The opening page of Spinoza’s magnum opus, Ethics (Photo credit: Wikipedia)

“Every Science begins as Philosophy and ends as Art, it arises in hypothesis and flows into achievement”- Will Durant, The Story of Philosophy

The key to innovation could not have been put in a more succinct manner. Compare this to one of the most successful consulting strategies in the world and you realize how hypothesis driven problem solving techniques yield better and faster solutions. Time to quote another one of my favorite thinkers, Spinoza. “…the motion and rest of the body must arise from another body, which has also been determined to motion or rest by another..”-Ethics

Spinoza was laying down his propositions for defining existence, body and mind. But if you apply the same postulate to science you find a relation with Newton’s First Law, that of Inertia.

The more one explores, the more one observes the symbiotic relationship that exists between philosophy, science, art and business. Exploring all dimensions can yield miraculous discoveries.Not surprisingly, the best discoveries and inventions have been realized by individuals who conducted research in multiple disciplines.

Posted in Management Consulting, Philosophy | Tagged: , , , , , , | 3 Comments »

Retail Bank Growth Strategy 101:Catch Them When They Are Young

Posted by Raunak Mahajan on July 20, 2012

Strategy: Retail banks need to catch prospective customers early. Target individuals that are making the transition from studies to professional life and benefit from the customer loyalty that is inbuilt into the product offering(explained below). Focus Sales efforts towards Corporate Accounts because these accounts translate into Employee accounts that tend to have a longer life. Do not go for customers that adversely affect the deposit per customer to cost per customer ratio.

Illustration:

The Manager of  SBI, a Public Sector Bank asked me to advise him on what he could learn from Private Sector Retail Banks. Why was it that I had my accounts with  HDFC, a Private Sector Bank and not his? And this inspite of the fact that there was no differentiation in the product lines of either bank; internet banking, mobile banking and other services were all part of SBIs offering as well. So why do I not have an account with SBI?

The question was out of the blue and not at all relevant to our preceding conversation. Caught me by surprise! So I thought…the cliched response that came to my mind was aging staff, poor quality service blah blah. But then I realized that SBI had already worked on these issues and addressing them would not add much value to their growth strategy.It was not the reason I did not have an account with SBI.So I though more…Eureka!

I used HDFC as my retail banker because the first company I was employed with used HDFC to process their salary accounts. When I joined that company, my first job after college, I was proud of my first salary and with it proud of my first very own bank account. HDFC had gained a new retail customer through their corporate account with my company. And I was not the only one. Like me, all new employees had there accounts opened in HDFC to ease transfer of salaries.

Lesson:

Customer Loyalty in Retail Banking has increased. While some of this can be attributed to good service quality, a lot of it is due to new features such as Internet Banking, Mobile Banking, Trading Accounts etc. that are bundled in the offering. The barriers to changing one’s account have increased because an account holder who gets used to the interface of Internet and Mobile Banking of one bank is hesitant to move to another bank where he would have to go through another round of initiation with the new bank’s interface. E.g. I am so comfortable with the UI of HDFC Netbanking that I am reluctant to shift to the platform of another bank. I have my customer IDs and passwords memorized and don’t want to change the status quo with a whole new set of numbers and passwords. I love my ATM card and don’t want to deal with a new one with a new PIN.

On further discussion it was evident that SBI was not aggressively targeting Corporate Salary accounts and this is hurting not only the quantity but also quality of its deposits.

Disclaimer: Bank names have been used only for illustration.I do not intend to endorse any.

 

 

 

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Humility Is Not A Virtue:Spinoza

Posted by Raunak Mahajan on July 19, 2012

“Humility is a sadness which arises from the fact that a man considers his own lack of power.Moreover, insofar a man knows himself by true reason, it is supposed that he understands his own essence,his own power. So if a man,in considering himself, perceives some lack of power of his,this is not because he understands himself but because his power of acting is restrained.

-Benedict de Spinoza, Ethics

Not surprisingly, this has been a prevalent thought in Western Philosophy and a key tenet that differentiates it from Eastern thought. While the Athenians, Stoics, Epicureans and others treated man as part of a society and framed definitions inspired by man’s interaction with his external surroundings viz. the state, fellow humans et al., Eastern philosophy focused on the individuality of a man, his struggles with his inner beings, the divinity that lay within him.

So why the two different approaches? One possible explanation could be that while the Athenians were struggling to find the answer to a Utopian form of state, the East may have already figured out the best form of governance. The East was already beyond the struggles of community living and had now reached a level of spirituality where the biggest struggle for a man was against the forces within and not without.

Posted in Management Consulting, Philosophy, Political Philosophy | Tagged: , , , , , , , , , , , , | 2 Comments »

Don’t Wait For Annual Appraisal For Conferring Benefits.Reward Now!

Posted by Raunak Mahajan on July 17, 2012

“Neither a Republic nor a Prince should put off conferring Benefits on People until danger is at hand.….Let no one, however, put off making sure of the populace until the time of danger arrives, because he may not, as the Romans did, succeed in this. For the people as a whole will not consider that they owe this benefit to you, but rather to your enemies, and, since they cannot but fear that, when the need has passed, you may deprive them of what you have been compelled to give, will in no way feel obliged to you.” –  Niccolo Machiavelli, The Discourses

Corporate Illustration: John walks up to his reporting manager with a resignation letter and states that he has an offer from another company. The reporting manager realizing John’s importance in the organization immediately offers to increase his salary and benefits by up to 20%. John negotiates a hike of 35% and stays back

Now that’s an all too common scenario in organizations around the world and calls into question the performance of existing Appraisal and Reward programs in a majority of companies. While organizations have increased the frequency of Performance Appraisals from annually to quarterly, the process of rewarding still remain annual in all but a few.

Delay in rewarding a deserving effort creates a window of opportunity for competitors to acquire performing assets from your talent pool. And even if you manage to retain the talent by giving into their demands, the payout ends up being several times more than had the rewarding been more frequent. This is evident in the above illustration where the cost of quarterly increments in John’s benefits would have added up to far less than the 35% hike that he eventually sealed.

Also, when the organization rewards John regularly upon the execution of good work, it adds to not only his motivation but also his loyalty to the company. In the illustration above, John walks out of the meeting, not with a sense of gratitude and motivation but with a sense of pride in his ability to squeeze the company’s arm as and when he wishes. Now that is not desirable at all!

Organizations need to re-assess their appraisal programs and stress rewarding good work when it is accomplished and not wait for the end of the financial year. There is a lesson to be learnt from the 15th century strategist.

 

 

 

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Corporate Acquisition 101: Inspired by Niccolo Machiavelli

Posted by Raunak Mahajan on July 16, 2012

In Chapter 3 of “The Prince” Machiavelli states, “when states are acquired in a country differing in language, customs, or laws, there are difficulties, and good fortune and great energy are needed to hold them, and one of the greatest and most real helps would be that he who has acquired them should go and reside there.”

Now here lies a lesson for all those consulting or undertaking Corporate Acquisition, especially one where entities from different countries or cultures are involved. Just replace “states” with “companies” in the above quote and the message is clear: The CEO or Chairman or Decision Maker of the company that makes an acquisition overseas, must move his office to the acquired company and run his business from there until Integration of the two entities is truly complete.

Further he wrote, “Because, if one is on the spot, disorders are seen as they spring up, and one can quickly remedy them; but if one is not at hand, they are heard of only when they are great, and then one can no longer remedy them. Besides this, the country is not pillaged by your officials; the subjects are satisfied by prompt recourse to the prince; thus, wishing to be good, they have more cause to love him, and wishing to be otherwise, to fear him.”

Proximity to employees of the acquired company will go a long way in allaying their fears and insecurities. Needless to say, this is of utmost importance when you wish to leverage the resources of the acquired firm to the fullest.

 

 

 

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