Do You Stand To Gain?

Do You Stand To Gain?
15 April 2019 Marina Hercka
In Journal


Value creation for clients is a priority for executive search firms, and specifically Patrick Morgan – our niche focus on Transaction and Acquisition Consultancy provides us with the knowledge in the field to guarantee optimal hires for our clients among the Big 4 and Global Strategy Consultancy Firms. We offer a backbone of intellectual curiosity and intensive research as an assurance that the process will produce the best possible outcome. Profit, after all, in any of its variants, is the goal; as either the leader of a business or an individual in the face of a significant decision, you must ask yourself: do you stand to gain?

 It’s the principal driving force of any transaction, hence the importance of due diligence on every single front – tax, legal compliance, cultural and strategic fit between the two parties, tangible and intangible assets, revenue and operational synergies; the list goes on. It takes a quick look at a significant and widely covered merger to quantify the importance of due diligence and thorough research in the quest for profit: Yahoo!’s 2013 purchase of Tumblr was ambitious. The Yahoo! CEO at the time had hopes of widening the Yahoo! Audience via Tumblr’s loyal userbase and keeping Tumblr’s ascension an undisturbed straight line. The lack of a cultural fit, both between leadership of the two parties and their respective userbases, was the merger’s ultimate downfall: even if, in theory, both parties stood to gain from the acquisition, internal politics resulted in bad advertising decisions and Tumblr’s much younger users had no place within their desired experience on the site for Yahoo!’s intervention; and so, the transaction serves as a reminder that surface-level solutions don’t work for complicated problems, and that the strategy to turn a profit is more often than not counterintuitive. (1)

           I’ll explain what I mean.

           In the quest for profit – a gain, where it be monetary or intangible – the usual strategy is to maximise the amount earned and minimise the amount spent, hence why Yahoo! tried to combine its advertising team with Tumblr’s to make one big conglomerate, even considering the lack of a rapport between the two in the early days. Given that Tumblr was no longer on the rise at this time in its life, spending the extra time and energy to establish an unquantifiable connection among the new combined workforce must not have felt justified, though it might’ve played a big role in the ultimate outcome of the merger.

           It’s the nature of the industry – the most profitable way from A to B is often the cheapest possible shortcut, which makes cost-cutting at the top of most priority lists; but the process is often less straightforward than that, to the point of a direct correlation between spending more and earning more. Culture and human considerations – aside from the obvious value of human capital – are one of those stones usually left unturned. That people are adaptable creatures and the workforce will ultimately somehow find a way to transition with no need for external aid is taken for granted. That, however, is almost never the case.

           And so, with that in mind…


             It’s not only during a transition that the state of the workforce must be considered, in equal measure for its own sake, as well as for the sake of increased productivity. Happy, healthy and safe staff are much more focused and eager to work, and though that sounds simple enough, the process of reaching a balance that’s comfortable for everyone can feel labyrinthine. Luckily, at this point in business history, we’ve got hindsight, experience and a much better understanding of workplace psychology to help develop optimal strategies for wellness in the office.

           In The Human Side of Enterprise, in 1960, Douglas McGregor addresses two different management styles, which influence employee motivation and mood in different ways – X and Y. Theory X management can also be referred to as authoritarian management: leadership delegates responsibility, talks at staff rather than to staff, establishes no non-professional rapport with employees, and allows for very little creativity in problem-solving. Theory Y management is the exact opposite: staff has almost unlimited liberty in the office, leadership participates in the process with more emotional involvement, but trusts staff with decision-making responsibility at the same time, and allows creativity within reasonable parameters. (2)

           A development on this theory brought about the concept of Z theory management, introduced by professor William Ouchi in his book, Theory Z: How American Management Can Meet the Japanese Challenge. In short, this presented itself as a happy medium between X and Y, and focused specifically on company culture and much more profound aspects of the job: employees need to be emotionally and intellectually involved in the work they’re doing, collective and individual responsibility need to co-exist in equal percentages, and there must be constant and genuine concern for individual wellbeing. Now, no theory will fit to every company completely, of course, some specifications won’t work for everyone, but the focus on hard work from both sides – leadership and workforce – is what makes it an appropriate model for modern-day business practice regarding wellbeing; because that’s all that’s needed, really – a sincere willingness to get involved.

           There are endless possibilities of detailed plans on how exactly to ensure that employees are feeling as confident and comfortable as it is necessary in order to be at their most productive – facilitating social interaction within the team, allowing for individual responsibility and executive decision-making, taking full breaks, allowing time outside of the office after periods of intense concentration, and so on; at the top of any of those lists, though, should sit constant communication.

           When asked, employees will name what they particularly appreciate and what the company environment currently lacks. Leadership can listen, adapt and, over time, the entire team can figure out what works consistently until a routine is established and everyone has a clear view of the company culture, their values, and daily routine so that stress is always just a temporary issue. This, of course, is a complicated and time-consuming process, and in cases where so much of a resource is spent, the question arises once more: do you stand to gain?

           The answer is: absolutely. Consistent wellbeing in the workplace is a gain on its own, not to mention the long-term productivity benefits and its potential to make or break an acquisition. It’s tempting to cut corners wherever possible and focus our attention away from intangible aspects of a business, such as office culture and whether everyone has adapted to it, and onto quantifiable profit or loss, though the former should be just as important as the latter. ­There’s room for value creation every time we spend a little extra time and effort to ensure the wellbeing of the workforce, both throughout the process of a merger, as well as in day-to-day office life. The combination of intention and constant communication is optimal for reaching a balance in terms of wellness and, though it won’t be a quick and painless process, one way or another, the entire industry stands to gain.

By Marina Hercka

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