What can we learn from Catalonia and Spain?
It screams poor change management, the absence of a shared purpose/ vision, and a lack of team building. But, let’s back up…
Why does Catalonia want to succeed? Acknowledging there are years and years of history and tremendous nuance and opinion, here is a blog-sized “why” in a nutshell:
- Cultural differences deep in history and pride dating before 1150
- Decreasing autonomy (after taking it, granting it, taking it, and then granting it again)
- Unequal financial contribution to Spain, especially at time of Spain’s poor economic health
For some additional context, here is a blog-sized history lesson:
Basically a “larger” power saw something it wanted (Catalonia). Catalonia was defeated in 1714 during the War of Spanish Succession and became part of modern day Spain. Throughout history, Catalonia has been given autonomy and has had it taken away several times. Catalonia now finds itself fighting for that autonomy again. The stakes are much higher this time given Spain’s poor economic health; hence, one of Spain’s reasons for their “you cannot leave” stance. There are also internal divides on the issue (urban vs. rural) across Catalonia.
So, what does this have to do with business?
As I mentioned at the start, a lot. If you are part of an organization that has been through a Merger/ Acquisition (even if just a merger of departments) or has a Cash Cow division/ product line (BCG Matrix), keep reading…
We’ve seen it time and time again across our clients and across newswires. Company X (Spain) sees successful Company Y (Catalonia). Company X decides it wants Company Y. During due diligence it becomes crystal clear that one of the main reasons for Company Y success is its culture.
Company X assures Company Y that it will not get in its way – “Y” can still do its “magic.” That lasts maybe a year. Company Y becomes resentful, frustrated, and starts to loose its “magic.”
In addition, Company X and Company Y executives do a poor job of managing the “human element” side of change; they mostly think about the “business or task” element in merging the two companies.
Even if not on purpose, there is no established or communicated vision for how Company X will succeed in Company Y, there is no investment in unifying the companies (we don’t count beer and bowling as an investment)….the list goes on. However, there are plenty of shared resource cutting measures and imposed corporate procedures and policies. How do you think Company Y culture is doing now?
Cash Cows are a good thing. An organization needs them. But you also need clear vision and on-going communication on why and how your Cash Cow’s role to the organization is critical and essential. The second a Cash Cow does not feel it is appreciated or is not acknowledged for how much weight of the organization it is carrying on its shoulders, trouble brews.
Catalonia is one of the wealthiest regions of Spain, tied with Madrid for contributing about 20% of GDP; in other words, about twice of Scotland’s contribution to the UK. Most of the articles I’ve read only mention the one-side gain Spain receives from Catalonia, leaving out Catalonia’s gain of staying with Spain. How do you think Company Y culture is doing now?
When poor “M&A” management meets an unappreciated Cash Cow, things get ugly.
Without building a strong, unified foundation at the start (a shared vision, team building, and on-going communication), the Cash Cow starts to feel resentful. It feels like its only purpose is to contribute revenue. Whether perceived or real, your Cash Cow feels like it is being “used and abused.”
Culture deterioration across the entire organization, not just the Cash Cow, and unwanted attrition (enter succession talks).
Modern-day Spain can displace blame on several historical figures, such as King Phillip V or General Francisco Franco for not laying the proper foundation during the M&A of Catalonia. With that said, ownership and accountably of now establishing a shared purpose, alignment, and team-building lies in front of Company X (Spain) and Company Y, the Cash Cow (Catalonia).
Do you have a Cash Cow that you need to recognize and boost? Do you have an M&A situation that you need to rectify? Is one coming up and you need to rethink your approach? It is not too late! Here are few reminders:
- Create a shared purpose/ vision
- Communicate that shared purpose/ vision over and over again, especially recognizing wins and successes that result from that shared purpose/ vision
- Invest in your culture and in building high performing teams
Ensure Cash Cows feel appreciated and recognized for vital contributions of overall corporate success, even better reward the accordingly