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You can dream, create, design and build the most wonderful place in the world,” said Walt Disney. “But it requires people to make the dream a reality.” As a growing number of companies seek to expand their own wonderful worlds by collaborating with other organisations, the issue of people management remains an essential part of the puzzle.

This is nothing new. For years, companies have struggled with the clash of cultures and working practices when embarking on mergers or acquisitions. During the integration process, a period of uncertainty, employees circle each other warily and can be reluctant to trust their counterparts who, after all, come from an organisation that often, until the deal was done, represented the competition.

Some of the same principles apply to more informal collaborations when it comes to integrating employees from different companies. “Businesses don’t collaborate, people do,” says Brendan Mullany, a UK-based independent consultant. “And collaboration is a natural act for some people but not necessarily all. So, it requires businesses to look at how their different cultures can work together.”

Of course, less formal collaborative ventures do not face many of the people problems encountered during a full-blown merger, such as staff cuts, which can demoralise employees and send others on a pre-emptive mission to find another job, taking with them much of the intellectual capital that was the reason for the deal in the first place.

Nevertheless, in other respects, the people management aspects of collaborations between companies can actually be more difficult to manage than in mergers or acquisitions. For a start, these ventures usually do not have the support of the integration teams that come in after a deal has been done to work on the merging of two separate cultures.

“One of the differences is that it’s left to the individuals from each company to do all the kind of things that in a proper merger would be taken care of by the merger team,” says Susan Dunn, a partner at the Mercer Delta Executive Learning Centre. “Due diligence is a rigorous process and they need to make sure they can use each other’s technologies – all those sorts of things get done by people who are not necessarily expert.”

Moreover, while a merger or acquisition is a done deal, a collaboration is a work in progress and, therefore, subject to as much scrutiny, if not more, by investors and senior executives. As a result, top managers often impose the kind of measurable goals and timeframes that can stifle a venture that is designed to foster creativity.

“The trouble is that all of these joint ventures are born out of the need to innovate, and innovation can be totally cramped when it is being too tightly managed,” says Ms Dunn.

At the same time, ambiguity and uncertainty are part and parcel of new collaborations and not all employees respond well to this. Moreover, if they are working on the collaborative project in addition to their normal job, they may feel overworked.

On the other hand, if they are seconded into the new joint-venture unit, they may worry about how long the venture will last and what will happen to their career prospects back in the parent company. As a result, a key responsibility for human resources staff is to find a way to manage the careers of employees in working on a collaborative project.

The danger for companies is that without a clear career path, employees working on a collaboration may be tempted by job offers made by their own organisation, by the partner business or by another company altogether.

“Often, nothing is formalised about career development in the informal arrangements because they’re often seen as temporary,” says Linda Holbeche, director of leadership and consultancy at the Work Foundation. “There is no counterpart development stream for them within the joint venture and, for most people, career advancement goes through the parent company. So, just as the collaborative venture is starting to work, the key people can get lured away.”

Furthermore, since companies tend to assign their brightest and best to new collaborative projects, they are prime targets for headhunters. “People’s skills tend to accelerate in these ventures, because they’re the ultimate strategic testing ground,” explains Ms Holbeche, who conducted extensive research on collaborations in her former position as director of research at Roffey Park Management Institute. “They’re entrepreneurial and call on the ability to navigate different organisational cultures and complex political environments, to cope with insecurity but be commercially astute.”

Joint ventures also test people’s ability to work with executives from other organisations who may be used to working in a very different way from their own.

“It is surprising how much people presume they have the same outlook,” says Mr Mullany. “Like perspectives about what drives the market and how it behaves – this can be well understood within a business but the other company may have a very different approach to customers, inventing a product and marketing a product. Peer businesses take all these things for granted, but on a collaboration you don’t have that.”

While team meetings and internal communications can help, experts say often the best people management strategy when embarking on a joint venture is to create an entirely separate culture – one that can be differentiated from that of both partner organisations, with its own expectations, procedures and ground rules. Executives that feel they are part of something new and exciting are often able to bond more quickly.

On the other hand, too much harmony can stifle creativity, since part of what drives innovation is the readiness of people to challenge norms and expectations and suggest radically new ways of doing things.

“They have to hit a sweet spot in terms of conflict,” says Ms Dunn. “Because to be innovative and get a diverse group of people together they have to disagree and roll up their sleeves and say, ‘No, that doesn’t fit in.’ You can’t have innovation without difference.”

Negotiating this tricky balance are the team leaders. These alliance managers can help build the trust required by the team before they feel comfortable sharing information and ideas with their counterparts from the partner organisation. These managers need both the responsibility and the stature to lead across both organisations.

Ms Dunn suggests that a useful model for these managers might be the designations given by many businesses to certain employees. Companies such as Sun Microsystems, Intel and Cisco Systems, for example, award the title “distinguished engineer” or “fellow” to many of their most respected staff. “In a joint venture, these status-driven roles would be helpful,” she explains, “because it says to someone that this is an individual who can be relied on.”

Despite the challenges of managing people in what may be an uncertain, ambiguous and high-profile venture, cross-company collaborations have one big advantage when it comes to motivating staff – their entrepreneurial nature. As a result, collaborative ventures can be attractive to their most promising employees, and a position on one can even be a way of rewarding excellent performance.

“When people are achievement oriented, they want to try new things, have jazzy new toys – and have fun,” says Ms Dunn. “And if they see that they can join a new culture that promises those things, they’ll roll their sleeves up pretty quickly.”

Copyright The Financial Times Limited 2017. All rights reserved.
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