“They revisit strategic decisions!”

Post-merger integration. A German company acquired an American company. They had been competitors for many years, and were two of the five major players in a global market. I would serve this German company over several years, going from one organization to the other, doing my best to ensure that the two cultures first understood each other before trying to integrate their approaches.

I was in the process of conducting a Check, an audit, from Latin to listen. The Check was a series of background interviews in one of the larger organizations within the merger. It’s the first step in supporting my clients. I have to get a read on the situation, get to know the people, the issues, the recent history. Also, it’s important that those people know who I am, what I do, how I do it, if they are to trust, and therefore open up to me. The Check is the basis for my support.

I conducted over seventy-five interviews (a very big consulting engagement) across five locations in Germany and the U.S., with folks at all hierarchy levels, and in all disciplines: engineering, manufacturing, supply, sales/marketing, service, etc.

A furious pace, not thought through

At the very outset I encountered something new to me. The Americans complained time and again that there German colleagues were revisiting certain key strategic decisions. It was not clear to me what they meant by that term. After a while, however, it did become clear.

Unfortunately, in many post-merger integration projects the companies involved – acquirer and acquired – feel that they have to make critical strategic decisions quickly, within a certain timeframe after closing. They discuss, debate and decide at a furious pace, often without first having understood each other, how the respective companies operate, the logic behind what they actually do.

One can imagine the stress, pressure and fear involved when folks are unsure how these decisions will play out. For most of them it’s about job security. For some of them – high-level management – it’s about power and prestige. In the case of this client, several decisions were made which had very high impact on large organizations and their locations, literally and directly on which organization will design, develop and manufacture what products and at which locations.

Power and back-room political deal-making

Two titans were battling each other within the same, newly formed, company. It was neither healthy, nor transparent, nor particularly pretty to observe. But apparently top-level management felt the need to make such decisions quickly.

Revisiting. One of those strategic decisions did not go the way the German side of the organization had hoped and expected. They were angry, hurt, shocked. From their perspective the decision was clearly the wrong one. The Germans were convinced that it had not been made based on objective, factual, rational grounds, but instead on power, clever persuasion and perhaps even backroom political deal-making.

They were not willing – or not fully willing – to accept, therefore execute the decision. Over the months, and even years, they consciously sought out ways to challenge the decision. Large, complex companies offer opportunities to delay and disrupt high-level decisions. Execution can be clear and disciplined or unclear and undisciplined.

The American colleagues felt – but could not quite prove – that their German colleagues were undermining the decision. Their term was revisiting.

Disrupting, or pehaps threatening, the business?

Were the Germans disobeying a strategic decision? Were they being insubordinate? Were they running the risk of severe punishment should their revisiting-tactics be identified, documented and attributed to specific people, whether management or subject-area experts? Was their behaviour outrageous?

These were certainly the sentiments on the American side of the company. But, did the Germans go beyond what was considered acceptable company-internal politics? Was their behavior insubordinate? Did it question the overall decision-making authority of senior management, which was jointly American and German? Were the German colleagues disrupting, or pehaps threatening, the business?

From the American perspective it was yes in each case. But from the German perspective? This story is not about where the line runs between accepting and not – or not fully – accepting a decision in two business cultures, although that is a very relevant intercultural topic. Instead, this story is about understanding how the German culture – and therefore German business culture – defines revisiting a decision.

Führen mit Auftrag

Go to our core content on Germany-Leadership and read about the German military‘s foundational leadership principle Führen mit Auftrag. The following quotes indicate what‘s operating in the German mind when they feel that a decision is suboptimal, not workable, or just plain wrong:

“The mistakes of senior commanders are often rectified by the troops below.” Carl von Clausewitz (1780-1831), Prussian General, author of On War.

“Sir, the King of Prussia has made you an officer of the Prussian Army, so that you know when not to obey an order!” Prince Friedrich Karl to a Major in the Prussian Army (1870)

“In reality, the Germans owe their final victory to the enormous amount of independently-minded and innovative junior officers in all positions all the way down to the very lowest ranks.” Russian General Woide on the Franco-Prussion War of 1870/71

“The most unfortunate officer in the field, is the one who is distracted by headquarters with daily, even hourly requests for reports on his strategy, tactics and intentions, quite often from an overly self-important junior staff officer with access to a telegraph line.” General Helmuth Moltke, Head of the Prussian General Staff

“War demands iron discipline of troops and exceedingly tight coordination of forces. In the heat of battle, however, of highest importance are officers and soldiers trained to think and act independently and spontaneously.” Prussian officer training manual of 1906

“… in those cases, in which the junior-officer comes to the conclusion that his commander is no longer in a position to judge the situation, and where his order has been rendered inadequate by events, it is the expressed responsibility and duty of that junior-officer to either redefine or ignore the order.” Prussian officer training manual of 1906

“Führen mit Auftrag is an extraordinarily broad and involved term, which includes all-encompassing aspects of current doctrine concerning the essence of war, characteristics of leadership, tactics, the leadership of troops, the relationship of senior to junior officers to each other and to soldiers, as well as training and education. In addition, these aspects are formulated systematically in a way which allows them to both mutually support each other and to make them inseparable.” An American Army Officer (1987)

German leadership logic tolerates . . . 

This thinking is very uncommon in the American culture. In fact, it is antithetical to it. German leadership logic accepts, and in many cases expects, that people working on the tactical level either revise, in some cases reject, important decisions which they view to be suboptimal, not workable, or just plain wrong.

This is worth repeating. The German leadership logic, which is a logic shared by both those who lead and those who are being led (a shared logic), allows for what Americans (and perhaps other cultures) would call revisiting or disobeying. The Germans would not call it disobeying a decision.

Germans would say that they are doing their job, which is to interpret and then execute a decision based on their analysis of the situation on the ground. In other words, they see it not only as their job, what they get paid for, but at a deeper level their duty to the company, their customers, and the communities in which these people live, to re-interpret, re-address, slow down, even block decisions which they believe are wrong.

The battle over this strategic decision

This is one reason why the German leadership logic stresses decisions, tasks, mandates, missions which are generally-formulated, which are not highly-defined, not prescriptive. This allows for room for interpretation. This approach applies also to high-level strategic decisions.

Now certainly there were individual, surely selfish, motives involved in this particular case. Germans are people, too. From the German perspective, and the battle over this strategic decision went on for years, they had very concrete, objective, business-driven reasons for why the decison was wrong.

What was not apparent to the Americans, however, was the German leadership logic and its encouragement of analyzing and interpreting decisions critically before executing them. It goes against the cliché Americans, and many other cultures, have of the Germans as being totally disciplined in executing the order or commands handed down by their superiors.

Much of this cliché is based on American movies and documentary films focused on the Germany of the Third Reich, under the control of the National Socialists. Those portrayals, however, offer an incomplete picture, at best. In fact, the German military during the Second World War operated, as it had in all previous wars going back to the early 1800s, under the foundational leadership principle of Führen mit Auftrag, which was not top-down, command-and-control, hierarchical, but actually quite the opposite.