2004 OD Network Conference

San Juan, Puerto Rico

Understanding and Developing An

Organizational Culture: A Case Study
An experiential learning opportunity

Myron Beard, Ph.D.,

First Data Corporation

&

Lizette Zuniga, Ph.D.,

LCZ Integrated Solutions, Inc.

October 4, 2004

First Data has earned respect for both financial and human
performance. During this session, we will share with you the First
Data journey in a case study format, highlighting the use of
organizational culture assessment as a tool to understand cultural
gaps and improve performance. It is our hope that this session will
provide you with an understanding of organizational culture, culture
assessment and key interventions for the benefit of improved
performance in the workplace.

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MERGER INTEGRATION ___________________________________
___________________________________
___________________________________
UNDERSTANDING AND
DEVELOPING AN ___________________________________
ORGANIZATIONAL CULTURE:
A CASE STUDY ___________________________________
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1

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Goals of the Session ___________________________________

• Learn to use diagnostic tool to understand ___________________________________
organizational cultures
• Understand the role of organizational culture ___________________________________
assessment while integrating two or more
organizational cultures ___________________________________
• Identify key organizational development
interventions based on organizational diagnoses ___________________________________
• Uncover barriers and challenges when using
organizational culture assessment and implementing
OD interventions
___________________________________
• Identify techniques to deal effectively with those
challenges
___________________________________

Maximizing the Deal

___________________________________

•Most mergers fail to increase

___________________________________
Problem
shareholder value
___________________________________
•Value erosion is primarily an issue
Cause of planning, focus, execution,
strategic fit and premium paid
___________________________________
Solution •You can maximize the deal potential ___________________________________
and capture value by speedy and
effective integration planning and
execution
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Merger Managers

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2
 Statistics are Sobering ___________________________________
Value Creation
– 70% of today’s mergers and ___________________________________
acquisitions fail to add value
___________________________________
• KPMG - 2001 Study of 700 firms

– Study after study of past 30%

31%
merger waves has shown
that two of every three deals
have not worked
___________________________________
• The Economist, January 9, 1999
39%
Retention ___________________________________
– In the average acquisition, Created Shareholder Value
40-80 percent of top
managers and engineers
No Discernable Difference
Eroded Shareholder Value
___________________________________
are gone in 2 years.
___________________________________
• John Chambers, Cisco Systems

Merger Managers

Market is Skeptical ___________________________________

• Market Reaction
– Acquirer’s stock falls after announcement due ___________________________________
– 30-40% premium paid for an acquisition adds to
expectation ___________________________________
• Resources
– Diverted from business
– Acquisition benefits are easily replicated by
___________________________________
competitors
– Acquisitions demands of integration divert attention ___________________________________
away from competitors
• Financing Value ___________________________________
– Acquisitions require payment upfront
– Price paid may have little to do with achievable value
Harvard Business Review (Nov-Dec 1999)
___________________________________

___________________________________
Conclusion:
___________________________________
Mergers and Acquisitions
are Risky Business!!!
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3
 ___________________________________
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The First Data Growth ___________________________________
Challenge
___________________________________
Meeting the Street without
missing a beat. ___________________________________
___________________________________
___________________________________

___________________________________
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The Cultural ___________________________________
Challenge ___________________________________
Addressing Differences,
capitalizing on best ___________________________________
practices
___________________________________
___________________________________

4

“Any merger is doomed if there is no
real effort beforehand to see whether
the two cultures have anything in
common.”
- Anne Fisher, FORTUNE,
January 24, 1995
What is culture?
“Organizational culture is
the way we do things
around here.”
- Burke & Litwin, 1995
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Culture is the collective values,
assumptions, beliefs and
paradigms that create the expected
and accepted behaviors of the
organization.
For Example…
) Hierarchical vs. Empowered
) Risk Avoiders vs. Risk Takers
) Reactive vs. Proactive
) Sales Driven vs. Profit Driven
) Cautious vs. Innovative
Culture clash: When two organizations
have different beliefs and
behaviors about:
•How to make decisions
•How to organize resources
•How to supervise people
•and so on...
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 ___________________________________
Examples: ___________________________________
Novell & Word Perfect
___________________________________
___________________________________
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Merger Integration ___________________________________

Cultural Analysis
Cultural
Dimension
Culture
of Word
Culture
of
Gap
Between
Importance
of
Impact of
Cultural Gaps
Strategies ___________________________________
Perfect Novell Cultures Dimension on Integration

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Cultural
___________________________________
assessment
gives you a ___________________________________
roadmap to ___________________________________
successful merger
___________________________________
integration.
___________________________________
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 Organizational Culture Assessment
___________________________________
• How alike are we? ___________________________________

• How different are we? ___________________________________

• How different are we from HPO?

___________________________________
___________________________________
• What specific areas warrant intervention?
___________________________________
___________________________________

___________________________________
How do you ___________________________________
assess ___________________________________

organizational ___________________________________
___________________________________
cultures?
___________________________________
___________________________________

___________________________________
The Qualitative Approach:
___________________________________
) Senior management interviews
) Customer / supplier interviews ___________________________________
) Focus groups ___________________________________
) Annual reports
___________________________________
) Press releases
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 ___________________________________
___________________________________
The Quantitative Approach: ___________________________________
) Surveys ___________________________________
) Metrics
___________________________________
___________________________________
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Pros & Cons ___________________________________

PROS CONS
• Can be used for
organizational development
• Measures “perceptions,”
not necessarily “truth”
___________________________________
• Provides snapshot for
strengths & weaknesses • Potential skewed results ___________________________________
– Respondents
• Can also show sub-cultures
(business units) within larger
culture
– Timing
– Deal
___________________________________
• Can also be used for
recruitment & leadership
• Results - as strong as ___________________________________
development your instrument

• Generic instruments
___________________________________
may not be suitable
___________________________________

___________________________________
First Data’s Approach

• Combined Approach
___________________________________
– Quantitative
___________________________________
– Qualitative
___________________________________
• Internally developed
___________________________________
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9

The CMI – Culture Merger
Integration Survey
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CMI Abbreviated Exercise
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Refer to your
___________________________________
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handout
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10
CMI Abbreviated Profile

Leadership Culture

The purpose of this profile is to diagnose an organizational culture in terms of its leadership practices.
Please circle the number that best represents the organizational culture in which you work.

Leadership Culture

LOW MID HIGH

Closely held 1 2 3 4 5 6 7 Open
Closely supervised 1 2 3 4 5 6 7 Empowered
Regulate 1 2 3 4 5 6 7 Delegate

Add your answers for your Leadership Culture Score and divide by 3: _________________

Planning Culture

The purpose of this dimension is to assess the given culture based on its approach to planning. Please
circle the number that best represents the organizational culture in which you work.

Planning Culture

LOW MID HIGH

Unknown strategy 1 2 3 4 5 6 7 Clear strategy
Tactical 1 2 3 4 5 6 7 Strategic
Reactive 1 2 3 4 5 6 7 Proactive

Add your answers for your Planning Culture Score and divide by 3: _________________

Decision Making Culture

The purpose of this domain is to facilitate understanding of the culture in terms of its ability to make
decisions and execute. Please circle the number that best represents the company in which you work.

Decision Making Culture

LOW MID HIGH

Consensus Approval 1 2 3 4 5 6 7 Streamlined Approval
Rules 1 2 3 4 5 6 7 Personal Judgment
Tradition 1 2 3 4 5 6 7 Originality

Add your answers for your Decision Making Culture Score and divide by 3: _________________

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 CMI Map
Plot your leadership, decision making and planning scores on the chart below.

Leadership
7
6
5
4
3
2
1

Decision Making Planning

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 CMI Maps
Decision Making Culture Leadership Culture
Leadership Leadership
7 7

5 5

3 3

1 1

Decision Making Planning Decision Making Planning

Planning Culture

Scale
Leadership
7 Low = 1, 2 & 3
5 Mid = 4
High = 5, 6 & 7
3

Decision Making Planning

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The Culture Team
Designing and Delivering
Interventions
Culture Team History
• FDC Finance – 1995
– “Making the routine routine”
• HP/Compaq – 2003
– “Adopt and go”
Culture Team Charter
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 ___________________________________
Goals
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Selection: Key Shareholders
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HR ___________________________________
Communications/Marketing
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Operations
Organizational Development ___________________________________
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Results
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Creating Interventions from
Results
Interventions
• Identify quick wins (e.g. guidebook to
company)
• Focus groups to validate and expand
survey results.
• Post-close talent assessment
• Address culture differences
• Values communication
• Change management training
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Notes, questions, ideas, actions to take
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17
Action Plan

Name: ____________________ Date: __________________________

Date to Date to
Development Areas Interventions
begin complete

What potential barriers may impede the success of this action plan?
_______________________________________________________________
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What techniques, resources or education will help me overcome barriers?

_______________________________________________________________
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 1. Discuss your results from
the CMI with a colleague

r e nce 2. Draft an intervention plan,

fe e! identifying key OD
C o n a l le n g
Ch interventions

3. List potential barriers to

implementing your action
plan

4. Identify ways to overcome

potential barriers
Notes, questions, ideas, actions to take
_______________________________________________________________
_______________________________________________________________
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_______________________________________________________________
_______________________________________________________________
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 LIZETTE ZUNIGA, PH.D.

Dr. Lizette Zuñiga is CEO of LCZ Integrated Solutions, Inc., a research and consulting firm focused on
organizational improvement and accountability. With more than 15 years of professional experience,
Dr. Zuñiga has expertise in leadership and team development, organizational culture assessment,
program evaluation, ROI and general assessment.

Lizette has served as both an internal as well as an external consultant for Fortune 500 companies.
Formerly with First Data Corporation, she led the corporate university's team in assessment and
measurement efforts. She executed a University dashboard, linking strategic business objectives to
organizational development initiatives as well as critical success factors and key measures. Lizette
executed impact studies showing the value of learning and development efforts. In her current capacity
as a performance consultant, she assists organizations by conducting various types of assessments and
surveys, including organizational culture assessment, needs assessment and leadership competency
assessment. Lizette also assesses the business impact of organizational development interventions and
facilitates leadership and team development activities. In addition, Dr. Zuñiga conducts leadership and
team development sessions to improve workplace performance.

Dr. Zuñiga’s academic contribution is extensive, including serving as an adjunct professor for a major
university, teaching Adult Learning Theory & Practice and Presentation Skills. She Lizette holds a
Master's degree in Psychology with a concentration in Cross-cultural Psychology and Psychometry
from Georgia State University, and a Ph.D. in Leadership & HRD from Barry University. She is
certified in ROI evaluation and in Myers Briggs Typology Indicator. Lizette has contributed to the
human resource development literature by publishing several articles on leadership development and
program evaluation.

Lizette was born in Miami, Florida of Cuban parents, and has a strong interest in the study of different
cultures. Her dissertation was published and presented at the 2000 Academy for Human Resource
Development was on The Role of Acculturation in Career Development Among Hispanic Managers. In
addition to spending time with family and friends, Lizette enjoys travel, exercise, dance, and hiking.

Lizette can be reached at: lcz_inc@bellsouth.net.

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 MYRON BEARD, PH.D.

Dr. Beard is currently the Senior Vice President in charge of Merger Integration at First Data. He was
previously head of the Organizational and Leadership Development. Prior to joining First Data, Dr.
Beard was a Senior Consultant and Merger Integration Practice Leader for RHR International, an
international management consulting firm. He has published several articles and book chapters on
mergers and acquisitions and leadership development. He maintains Colorado licensure as a
Psychologist. He has a Ph.D. in Counseling Psychology from the University of North Texas and a BS
degree in Psychology from Southern Methodist University

Dr. Beard was born in Santa Fe, New Mexico and has had a lifelong interest in the Southwest. He
collects art from Southwest artists including a storyteller collection from the pueblos of New Mexico.
He also has coached youth sports (basketball and soccer) for over 9 years. He is active with the Gold
Crown Foundation, and has served on the board of ArtReach. He is currently on the Advisory Board
to the Executive and Professional Development Program at the Daniels School of Business at the
University of Denver. He previously served on the Gifted and Talented Committee for the Littleton
School District and on the Healthcare Committee at the Denver Metro Chamber of Commerce. He
attends St. Andrews United Methodist Church in Littleton.

Dr. Beard is married to Nicki Stanton. He has two sons aged 13 and 16, currently enrolled in Littleton
Public Schools. In addition to coaching, He enjoys family activities, playing golf, reading, writing,
hiking in the mountains, exercise and travel.

Myron can be reached at: myron.beard@firstdatacorp.com

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