We recently spoke with Markus Fost, managing partner at the European digital strategy consultancy Fostec & Company, about how to enact change in different company cultures, and the differences in working with American and European companies.

(The interview has been condensed and edited for clarity.)

Master B2B: I’ve heard you say that companies tend to divide their projects into growth projects and efficiency projects. Do you have to tackle both growth and efficiency at the same time? Can you do one without the other? Does it work better if you do them both together, or are they separate things. Are they two sides of the same thing?

Markus Fost: Although this year we’re seeing much more focus on ways to make organizations more efficient, it really depends on which economic cycle we’re in.

In general, the Private Equity investors we often work with are focused on how to increase the enterprise value of the organization and they would actually do both types of projects right from the beginning. But depending on the size of the company and the people working there, it’s possible that you’ll overload them by doing too many projects in parallel – you can’t run 50 project streams in parallel in a mid-sized company, for example.

There’s another aspect to this. Some European countries have work cultures that are more similar to what I’ve seen in the United States – they’re more numbers-oriented with a more rational style of doing business. Doing both types of projects at the same time works perfectly. But then we have some countries like Norway and Sweden where companies care more about making sure everyone feels good about their jobs, rather than just looking at the numbers. And that’s harder because you have to do a lot of change management work to be successful there.

Master B2B: This is such an interesting difference with the US, where we don’t have the regional differences that you’re talking about. When you’re doing a project with a Norwegian company do you just assume they fit the stereotype, or how do you determine the way they make decisions?

Fost: With each project in the requirements phase we get to know the management at different levels, so we understand how they make decisions. In a Nordic culture, you may have a discussion with a person one-on-one before the meeting so you don’t have to be so direct during the meeting in front of everyone. It’s not that the direct approach or indirect approach is better, they’re just different. In one environment people would be upset if you didn’t get straight to the point, and in the other people would be offended if you did. As a consultant we just have to adapt. The work you do has to adapt to the culture of your client.

Master B2B: When a private equity firm or other investor brings you in, is the management team already on board with the idea of you being there and working with them? Or do you have to convince them that what you’re doing isn’t a threat to them? Because one of the things we hear all the time from folks working for companies in eCommerce and B2B eCommerce is so much of this is trying to convince people that what we’re doing is valuable and worth it and it’s still very uncomfortable. Do you still have to win over the executive team to get the project to work?

Fost: In an ideal case if they have already installed a strong management team and they quickly bring together the consultants with the management team. If the transition phase hasn’t happened then there are two options – either try to understand the intrinsic motivation (what is motivating each individual) or what we call “control and command” (Master B2B note: I think of this as “carrot and stick.”).
But regardless of which approach we use, without top management support or shareholder support, the project isn’t going to work. Certainly sometimes there’s friction. But if there’s a strong management team, the friction can be useful.

Master B2B: I wanted to talk about what you said around understanding intrinsic motivation plus being able to control the direction. That feels like a skill I’ve seen in consultants and I’ve not seen a lot internally in companies. Companies tend to work one way or the other – either very top down, meaning “you’re going to do this and that” or otherwise it’s “we care a lot about you, and I’d love to hear what you think.” The balance always seems to be off. I’m curious if you found that and how can people who actually work for a company (not as consultant) and bring that balance to their business?

Fost: I’ve had a good experience with companies that are used to change and transformation. There are some Industries where they are in high transformation mode all the time – every 6 months there’s change in the office. Usually the difficulty is in organizations that are not used to change. In this case, the American style is the more efficient one.

In Europe, we’re lacking people – there’s an extreme labor shortage. At the end of the day, everybody who wants to work will have 5 or 6 good opportunities.

Also in Europe we have very high barriers to letting people go – it’s very difficult to fire underperforming workers. So for larger corporations a whole industry has opened up where they can hire people who work full-time for staffing firms and then the company pays the staffing firm. That way, they can have them work until they’re no longer needed, then they return to the staffing firm. They pay a huge margin for this, but it gives them flexibility around staffing that you have in the US but we don’t have in much of Europe.

So as a consultant working with firms that have so many of these temporary workers, it’s hard to implement a command-and-control system because there’s no sanctioning instrument – there’s no stick for the carrot. The system says “you can’t fire me.” So the only way you can get those people aligned with you is through intrinsic motivation – what’s actually driving their behaviors. I think this puts us at a huge disadvantage.