Those of us old enough to remember jeux sans frontières may have images of teams from obscure places on the continent doing battle with Anglo Saxons in the silliest games possible. Today, these games are not so silly, and the stakes are high. Martyn Sakol describes how one international organisation integrated its different businesses into a matrix of different areas – and how communication was the key to success.

Globalisation has meant that the world of organisations and managers has expanded dramatically. Amongst others, the integration of the European Union, the establishment of the World Trade Organisation, and the entry into the world marketplace of the former Soviet Union and Eastern Block have provided opportunities for the expansion of international operations. The managers and employees of many of our clients from both commercial and non-commercial organisations encounter these wider international realities in their strategic and tactical thinking, as well as in their daily activities. In addition an unprecedented advance in information technology and communications has brought geographically dispersed individuals and groups into closer contact.

These continuing changes make new demands on organisations and their employees. An increasing global market environment requires that managers be aware of developments around the world, and that new systems of information collection and processing are needed so that decisions can be made quickly and accurately. Internationalisation has also meant that staff within the global organisation are working with colleagues of different countries and cultures. This clearly makes additional demands on the skills of those who participate in cross cultural activities. They are faced with interpreting the actions and (perceived) attitudes of individuals and organisations operating in contexts quite different from their own. The business imperative is to successfully work with groups that may not only have different objectives, but also different methods of achieving them, and different understandings of what is appropriate business behaviour.

AC Nielsen

The leading international market research company, AC Nielsen, has undertaken an ambitious programme to restructure the organisation and delivery of services to their European clients from a base of 18 European countries, to 6 European areas. This project, known as Go To Market, began at the beginning of 2001 and meant that ACN had to manage both the complexity of cross-national relationships with the additional challenge of becoming a matrix organisation. This transformation has delivered economies of scale and effort and has facilitated the sharing of knowledge and resources across what would previously have been considered impermeable national boundaries. The benefits are a more flexible response to both local and international clients, together with a reduced cost base.

Managing the white spaces – the AC Nielsen European area structure

Prior to integration, each country operated autonomously and was managed by a country manager. In the restructured organisation, a vice president was appointed in charge of each area to lead the transformation from independent country businesses to European area, with the unambiguous objectives of sharing clients, knowledge, resources and processes in order to deliver both cost reduction and revenue growth, through adding value to their client base.

ER Consultants, together with AC Nielsen’s training and development team, helped AC Nielsen integrate Sweden, Denmark, Finland and Norway to form the Nordic Area, the UK and Ireland to form UK/IRL Area, Germany, Switzerland and Austria to form DACH Area, France, Belgium, Holland and the Netherlands to form Area 1 and Spain and Portugal to form the Iberian area.

Matrix relationships, different countries, different languages

The effectiveness of matrix organisations comes down to relationships. For ER Consultants and AC Nielsen’s training and development team, whose remit was to facilitate the implementation of the new structure and marketing strategy, the following questions were at the forefront of our minds: would the challenge of cross national relationships be a significant variable? Does national culture affect business relationships in a qualitatively different way that makes a matrix structure more difficult to manage? And, what methodology and process would enable the smooth transition from country to area structure?

Methodology

Working closely with the Area Executive Teams in each of the areas, it quickly became very clear that there were a number of key stages required in order to achieve transformation, integration and a new way of working. Firstly, we organised a series of management workshops facilitated by us but driven by the business agenda of the participants, to define an area strategy for the implementation of Go To Market. Using a variety of tools and techniques (some conventional and others not so conventional) we asked each area to consider the following:

• What is our common vision of a successfully integrated area?
• Can we create a sense of urgency within our country teams in order to deliver the projects that will make the vision a reality?
• What is required of the Area Executive Team to form a leadership coalition?
• Who are the key stakeholders and what are the risks and hurdles that we anticipate in making this vision a reality?
• How can we deliver business as usual whilst transforming our business?
• Can we find a quick win and deliver an early result?

The workshops identified a set of immediate objectives for each area team focused on achieving alignment, sharing knowledge and resources. Whilst the process to identify these objectives was similar between area teams, the objectives varied according to where the area was on the change continuum, and what was the most urgent need. However in general terms, creating a compelling area vision, an implementation plan, and gaining the commitment of employees to it was a key concern for all of them.

The actions taken by the Area Executive Teams following the workshops varied considerably and included, for example, agreeing on and implementing an area communication strategy, systematically assessing management capability, agreeing to transfer resources from one country to another and resolving urgent employee relations challenges. ER Consultants, together with AC Nielsen’s training and development team provided intervention where and when it was required. The workshops were followed by active consultancy support, to facilitate, challenge, provide expert resource and ensure that the momentum gained at the workshops followed through into the day-to-day business of the area teams.

The outcome has been a transformed and successfully integrated AC Nielsen across Europe, measured by both reductions in cost and increases in revenue. We have helped AC Nielsen build organisational capability and learned with them that national culture is not a confounding variable at all. Any hurdles identified were not related to culture, but were related to loss of power, autonomy and resistance to change. Finland is a good illustration here. By April 2002 employee relations as a consequence of the implementation of Go to Market, had reached a low point. So, with the help of a local management consultant, we ran a series of focus groups with both management and employees, and held meetings with a variety of key stakeholders, in an attempt to understand the reasons for such significant resistance to change. What emerged was not an unwillingness to become Nordic and cede power to Denmark, Sweden and Norway, but a desire to do things the way they had always been done within this business.

For example, the managers’ offices within the Helsinki office are enclosed rather than open plan. As part of the area vice president’s initiative to win the hearts and minds of his employees, he suggested removing the walls to create an open plan space. This met considerable resistance including suggestions that as the building was designed by the award winning Finnish architect who designed the Finnish parliament, its walls were sacrosanct. (We suggested here that the VP contact the architect. The architect’s response was that the walls were stud partition, and that he had never wanted them there in the first place!) Whilst the resistance was clearly related to Go to Market, it was not a consequence of national culture, or of alignment with, or ceding power to, another national culture. It was however, a consequence of the fears that some employees have when confronted by organisational change, such as fear of betrayal, fear of losing recognition for the past, and fears of incompetence in the new order. This resistance can occur within an office between desks, never mind across national boundaries. The Finnish challenge was resolved through the implementation of an integrated strategy to engage and enroll the staff groups and key stakeholders around Go to Market, and required communication and dialogue using a variety of media.

Consequently, as with matrix management, the key to success has been the development of effective relationships. We have helped AC Nielsen achieve this by promoting a constantly communicated vision, which ensured that the organisations were coherently aligned and harmonised. We worked with the area teams to ensure that they focused on commonalities, not differences. We have helped the teams across national boundaries establish a common currency through consistent performance measurement and tracking, and the teams shared both financial and market insight. As with jeux sans frontières, the players may come from different countries with different traditions, but in order to dress up in an alligator costume and learn to swim across the river, they have to communicate effectively, overcome resistance to change, challenge each other constructively and form sustainable winning relationships.

For further information, please contact Martyn Sakol:
T 44(0) 1223 31594
E martyn.sakol@erconsultants.co.uk