[M&A] The Delusion That "Big Company Employees = Capable of Managing an Acquired Company" (Solution Part: Organizational Theory)

Last time, I stated that "it is difficult to cultivate the qualities of a manager in a large corporation, and failures occur when such employees are placed in management positions."

The summary of the previous article is as follows. You can find the full text here.

This time, I would like to present "what should be done" from the perspective of "organizational theory."

Solution 1: Flatten the organization and delegate authority at all costs

The need for decision-making is not limited to management or M&A. It is a phenomenon that inevitably occurs in any type of work. However, when a tall pyramid is built in a large corporation, decision-making authority tends to rise along with it, often leading to a state where "nothing can be decided in the bottom half of the pyramid."

When that happens, the "absolute number of decisions" that can be experienced during the 20s and 30s, which is the period of greatest absorbency, decreases, and inevitably, the "courage to make decisions" is not developed.

What a boss should do is "entrust tasks to subordinates, guide them, and take responsibility for the results."Surely everyone understands this in their heads. However, the more people gather, the more "authority = reason for existence" becomes, and they cannot let go of it. As a result, authority keeps rising to the top.

Instead of going against such human nature, we must prevent it from working. To do that, we have no choice but to lower the height of the pyramid. Make it a wide, flat triangle.

It is said that Google has a rule: "Do not build an organization if you don't have at least seven subordinates" (though they change it depending on the situation). If you do that, 1+7+49+353+2,501 = 2,801 people, and an organization of up to 2,801 people can be managed in four levels below the president.

Also, when the organization is flattened and the number of people involved decreases, "flexibility" is born at the same time. It is easy to understand if you imagine which is more agile: a large sailing ship with many crew members or a small boat with few crew members.

Flattening the organization increases the number of times decisions are made, and courage is acquired. Because decisions are repeated speedily, thinking becomes flexible.

"Organizational flattening," which has been called for in the last few years, is also extremely important from the perspective of producing managers.

Solution 2: Foster psychological safety from the top down

What is psychological safety?

When you flatten an organization, you are prepared to increase decision-making power and flexibility. However, large company employees who have lived for a long time without making decisions are in a "mentally stiff" state. Unless you loosen this state, they will not easily "decide for themselves."

The keyword that appears here is "psychological safety." Its definition is,

In other words, it refers to a state where one can speak and act without fear of "Will I be scolded if I do this?" or "Will I be made a fool of if I say this?"

If you are a student reading this, you might think, "Wait, do people still feel this way even after becoming working adults?!" but this is something the majority of so-called "salarymen" feel.

Or rather, if you have decision-making authority or personnel management power, it is normal to feel this way. After all, someone with different standards and values than your own is evaluating you. You might measure with a ruler, while your boss might use a protractor. It is natural to feel anxious.

In other words, "Psychological safety is something that will never be born unless you try to create it." There are still many working adults who do not understand this.

"Wait, why didn't you tell me?!"

I hear this statement, but

"Oh, I didn't create an environment where they felt comfortable telling me..."

comes first.

How do you create psychological safety?

Since there are entire books written just on this, I naturally cannot cover it all here. However, I will propose a few methods.

The most important thing here is that "Psychological safety is something created by the top." It will never be born by accident, and even if middle management or subordinates try to create it, they cannot. If you, the readers, feel the need for it, do not try to implement it yourself; instead, work on the top management.

1. Abolition of "VIP signals"
This is an expression used by Yoshiharu Hoshino of Hoshino Resorts. It means creating "psychological flatness" by eliminating items that remind people of "hierarchical relationships" in daily actions, such as "abolishing job titles," "abolishing private offices," and "prohibiting designated seating orders."creating "psychological flatness".

2. Permission for direct meeting scheduling
Even now that IT tools have developed this much, when you want to book a time with someone who has a secretary, don't you consult with the secretary via email in advance instead of booking directly? Let's stop that. You are all employees of the same company. Let them properly block out the times they don't want meetings scheduled themselves.

3. Permission for all employees to post
There are still a great many companies that hinder employee posts for the reason that "we don't know what they might say." However, as we know from the fact that speech control is always a habitual tool of dictatorial states, this is the quickest way to "kill individuality and autonomy."

By "returning" the freedom and responsibility of posting to each employee and each individual, they will feel that "I am trusted."

If you are afraid of posting externally right away, first let's activate posting on internal groupware. Through that, I hope you can feel and learn "effective posting" and "posting etiquette" before launching externally.

There are many other methods. If you are interested, I have listed related books at the end for your reference. In the near future, I plan to write a note specialized in psychological safety.

What if you possess "the courage and flexibility to make decisions"...?

Even though I am talking about management, the word "management" has not appeared once so far. Those who opened this note expecting such a discussion must be quite disappointed.

However, to repeat what I said in the problem-posing section, I have been involved in what is called "management" overseas in my own way, and I have had conversations with many managers, so I am convinced.

And so.

Unless you create a foundation that makes it easier for such talent to emerge through 'organizational restructuring' and 'transformation of organizational culture,' the probability of management talent being born from large companies will remain low(since there are always mutants, it is not zero).

Therefore, I started by discussing those points.

Next time, I will move on to more technical discussions, specifically 'what kind of mechanisms should be introduced to enable business management within large companies,' so please wait another week.

Kaoru Hosoda

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