Paul is an old friend who, until his recent retirement, worked as a senior scientist at a pharmaceutical company, where he managed a group of innovative researchers. After reading The Progress Principle, which describes our discovery that progress in meaningful work drives employee motivation, Paul was eager to share his own story with us. When he started at his company, it was young, relatively small, and doing cutting-edge research. Because of the start-up's success in developing drugs, it was acquired by a large multinational company. Unfortunately, that firm didn't understand that the true value of Paul's company lay in its people and practices, not its patents.
Paul told us that, instead of immediately finding ways to help his people make even more progress in meaningful work, the first thing corporate headquarters did was hold a series of all-hands meetings on "best practices." These meetings focused on creating "harmony" between the operations of the two organizations — which really meant that corporate headquarters wanted Paul and his group to forgo the practices that had made them an attractive acquisition in the first place and adopt the practices of the acquiring firm. If this homogenization had worked, it might well have spelled disaster.
Fortunately, Paul quickly recognized that in order to continue innovating, he and his team would have to find a way to maintain the integrity of their work environment while providing headquarters with the expected productivity. Shortly after the best practices meetings, the COO visited Paul's location to see how the alignment was going. At the end of the day, he told Paul that he didn't see much "harmony" going on; his group seemed to be doing things their own way. As it happens, Paul is a talented amateur singer, who performs regularly in choral groups. He explained to the COO that there is a difference between singing in harmony and singing in unison. In harmony, the performers sing different notes which, when combined, create the lovely complexity and consonance that we all enjoy. Singing in unison — everyone singing the same note — is not nearly as rich and satisfying.
We think that Paul's analogy is beautifully apt. Organizations work best when there is harmony among units, not simply uniform practices. Certainly, smooth coordination is crucial — and that's something Paul's group achieved with the parent organization — but it's foolhardy to think that everyone should do the same things in the same way.
The COO was smart enough to accept Paul's explanation and to avoid meddling with that group. Paul and his team were able to thrive and contribute to the organization. Unfortunately, some of his colleagues in other acquired units were not able to adapt to the new corporate culture while retaining their former strengths. Some good scientists left the company, and others lost their innovative spark.
A few years later, Paul was talking to a top executive of the acquiring company. That executive admitted that they had made a mistake when they took over Paul's company. He said that they had thought the most valuable assets they were purchasing were the patents. But he now realized that the talent and creativity of the people, along with their innovative way of working, were the real treasures.
If your reaction is anything like ours, right now you are probably thinking, "Well, duh!" Why couldn't the top brass — smart, well-intentioned people — see beyond those attractive patents? Why did they try to make Paul's company just like their own? We think it's because they overvalued the shorter-term returns that the patents could bring, and undervalued the longer-term innovation potential of talented people who work well together within a supportive system. We know, from our own research, that people work harder and perform better when they feel valued by their organization. The acquiring company put the future at risk when it tried to unravel the start-up's culture of success.
Maybe this is part of the reason why most acquisitions don't work out. Often, people speculate that the cultures of the acquiring and the acquired firms stayed too distinct. But it's possible that overzealous efforts to achieve uniformity often smother what's great about one — or both. What does your experience say?