Many attempts to merge, or start collaboration between teams, departments or organisations fail.
One of the leading causes is that many people assume everyone wants to be treated the same way they themselves want to be treated.
They are not aware how profound the differences between the parties involved can be.
The CoLab process helps build this understanding and increases the chances of a successful partnership.
Why Things Go Wrong
Let’s use the word ‘collective’ to refer an organisation, or a team, or a department, or any group of people for that matter…
Each collective has its own distinct personality.
To better understand such differences, we can look at four broad personality types.
Depending on their personality type, collectives will focus on a different main priority.
We’ll use colours to refer to each personality type.
- Blue collectives are rational
- Green collectives are operational
- Red collectives are intimate
- Yellow collectives are innovative
Successful partnerships between collectives depend on knowing themselves, as well as knowing what drives their counterpart(s).
Cooperating collectives need to know how they differ.
What The CoLab Process Can Help With
When collectives of different colours come together, things often go awry because they are so different from each other.
It’s not that either one is wrong; it’s just that they are different.
The CoLab process is an approach to improve the odds of a successful partnership or collaboration.
With this process, any differences are brought to light early on in the process. Differences can be discussed, managed and used as as source of strength rather than as a weakness.
Suppose an operational (green) collective (Chart 1) needs to form a relationship with an innovative (yellow) collective (Chart 2).
There is a substantial risk that the relationship will not work out.
A green collective will expect the yellow collective to have the same priorities as they have themselves.
Managers for an operational (green) collective know that
– strong controls
– processes and procedures
– traditions and rules
are working for them.
But they may not understand that these things will not work well in the yellow collective where innovation is the first priority.
This sample chart visualises the relative priorities and preferences of a typical green collective:
This next sample chart visualises the relative priorities and preferences of a typical yellow collective:
An example taken from real life. Some time ago, when Westpac (a blue/green organisation) took over Trust Bank (a red/yellow organisation) most of the inherent value of Trust Bank was lost after a few years.
This outcome was totally predictable and could easily have been avoided.
Mismatch Is Not A Problem
A mismatch is not a problem. Differences can add strategic strength to the partnership.
A merger or collaboration only works when both collectives understand each other well.
They must respect each other, and allow each other to remain true to their personality type. Differences can be used as strengths.
In our previous example, a merged collective would be able to use the practical process orientation of the green collective, and draw on the creativity of a yellow collective.
A second real-life example: when the ANZ Bank took over the National Bank of New Zealand, Chairman Sir John Anderson showed deep understanding of the differences between the two organisations.
For several years after the merger, he allowed both brands to exist side-by-side, and he focused on reducing costs in common back office areas.
Who Can Benefit From The CoLab Process?
The CoLab process is useful to the following target customer groups:
- Top managers who are intent on improving the way different departments in their organisation work together. For example: reduce friction between the accounting department (blue) and marketing department (yellow).
- Boards of directors who want to know about, and reduce the risk of failed mergers long before any avoidable damage is done.
- Corporate Advisers who are advising organisations on how to get better collaboration within teams, departments or organisations.
Real-life Examples Of The Use Of The Colab Process
Increasing Collaboration Between Internal Business Units
Virtual Group worked with the Accounting Department of a major New Zealand government department in Wellington.
The government department worked in the social development sector and was mostly red (intimate).
Like most accountants their profile was mainly blue (rational).
Before applying the CoLab process, the accountants delivered reams of analytical material to their top managers, who largely ignored it.
The accountants were frustrated because they were often left out of the decision making loop and seen as irrelevant.
At the same time, the top managers suffered from lack of good analysis and information.
Applying the CoLab process brought the needed clarity.
The accountants became aware of the underlying issue and they changed their approach.
Instead of sending out loads of data, they carefully analysed and summarised the important parts and sat face-to-face with the managers to discuss what it meant.
Deliver More Value To The Best Customers
Virtual Group worked with a butter company, and used the CoLab process to analyse the key customers.
They sought to improve the service to each key customer by tailoring the delivery to match the colours of each customer.
The butter company was mainly red (intimate) and their largest customer was mainly green (operational).
The CoLab process helped them see how to adjust, to make the product offering more appealing to their more conservative customer.
Sector-Wide Cooperation Between Agencies
Virtual Group worked with all the agencies in New Zealand responsible for delivering emergency services.
This included Fire, Rural Fire, Ambulance, Defence and Police.
After applying the CoLab process, it turned out all the organisations involved were mainly green.
This result instilled confidence in the managers, and they set out to develop common working procedures.
They all signed up to define and use a common language and common behaviours.
Consequently, this reduced misunderstandings, overlaps and gaps at critical times during emergencies.
Aligning the Culture, Brand and Customer Service Within Organisations
Virtual Group worked with an educational provider.
The CoLab process highlighted that their operation was seriously weakened because of an internal misalignment within the organisation.
The senior management team was striving towards “customer intimacy” (red).
At the same time, the marketing manager and her advertising agency designed TV ads that were highly innovative (yellow).
Meanwhile their culture and their service delivery was quite operational (green), with mainly paper-based delivery.
It was no wonder that their customers – teachers and students – were receiving confusing signals.
Maximise the Results of Strategic Mergers
If strategic mergers are not well managed, the costs can be extraordinarily high.
The Virtual Group worked for a major automotive company (yellow) which was one of New Zealand’s major listed companies.
It was taken over by a steel trading company (green).
The two parties were very different. They each should have been managed in a totally different way.
Unfortunately, the directors and senior managers in the steel trader assumed they could manage the automotive company the same way they managed the steel trading company.
Five years after the takeover, the combined organisation was valued lower than the value of either of the two original organisations.
The CoLab process helps wherever there is an interaction between two collectives.
- When two internal business units need to improve the way they work together
- When choosing a critical customer
- When choosing a critical supplier
- When government departments are merging their ‘back offices’
- When agencies need to work together closely to achieve the needs of a sector
- When doing due diligence prior to a merger
- When merging with another collective
- When clubs or not-for-profits need to work together closely.
- The CoLab process helps determining the reasons for and the reasons against forming a partnership before a commitment is made
- The CoLab process smooths out the conversation, communication and decision-making process before and after partnerships take place
- The CoLab process helps to make use and maximise the potential synergies between partners
- The CoLab process minimises the risks of failed partnerships.
A CoLab case-study usually includes the following steps:
• Three or four people within in each collective will complete a CoLab questionnaire on-line.
• The results of the questionnaires for each collective are computed into CoLab profiles.
• The CoLab profiles of each collective are compared.
• Virtual Group produces a report highlighting the important characteristics of each collective.
This report covers:
- similarities and differences
- what the mutual expectations are
- whether these expectations can be met
- potential merger issues
- recommended actions for a successful merger
• Virtual Group will work with the collectives involved to resolve any issues.
This product has been developed and is supported by Virtual Group Business Consultants.