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 / Autumn 2013 / Issue 72(originally published by Booz & Company)


Life in the Matrix

The symbol of the two merging tributaries was rolled out in many concrete ways. One example involved the uniforms that the sales force wore on daily visits to customers. For the first time, Gamesa and Sabritas employees wore shirts of the same color, with the new PMF logo on them. The new shirts became ever-present reminders that helped fuel key behavior changes. However, the company also kept the old Sabritas and Gamesa logos on the left side of the new shirts, so as not to disrupt the sales force’s identity, or move too quickly. The rivers need to merge at their own pace, and since they were most closely associated with each brand, the sales forces were very sensitive. PMF took time to merge their practices.

They used a matrix structure to set up the new organization. One goal was to free up the collaboration across boundaries that true integration would require. Another goal was to focus attention where it mattered most: on opening new markets and meeting customer needs with well-targeted products delivered in a timely manner.

The new enterprise was composed of four business units: savory snacks, biscuits, confectionary and new businesses, and foods. As president, Padierna had 12 direct reports, four heads of the business units and eight leaders of functions: finance, sales, R&D, marketing, IT/transformation, legal, operations, and human resources. The sales units, which had formerly been organized according to product, were now deployed by customer—for example, one each for Walmart and for convenience stores. Most departments reported both to a function and to a business unit.

Even with this new structure in place, Padierna knew leaders could not simply move people around, especially because the two legacy identities would remain in place for a while. To create a better hybrid culture, people on both sides would have to focus on something new and different from the old companies’ cultures—a culture that perpetuated what was good from each, but was not afraid to develop wholly new elements as well.

During its first year, through mid-2011, the merger engendered a measure of confusion and did not itself create an automatic sense of alignment. Entrenched behaviors and traditions remained in place even as new reporting lines and processes were solidified. Territoriality surfaced in the business units, which continued to drive the business as if they had their own P&L sheets. Leaders competed to get the more highly regarded people to be loyal to them.

In addition, while the more interconnected and horizontal structure mandated that people take more responsibility and initiative, the long-established traditions in both cultures made people reluctant to challenge leaders or hold them accountable for decisions that undermined real collaboration. A leader in the savory snacks division launched a cheese-based cracker, even though the biscuit division was already developing a similar product. Instead of acknowledging the possible consequences of this overlap, people on the snacks team simply went ahead with trying to create the new cracker and get it out into the market. As a result, marketing and R&D got pulled in opposing directions as the biscuit and snacks units sought the same resources. Collaborating for the greater good was not an easy task, despite the tremendous efforts and disposition of everyone involved.

Change also proved difficult—even impossible—for some people individually. Most of them quickly identified themselves, and were offered an easy out. As Padierna put it, “In a merger, there are three kinds of people: those who are willing to accept change and become your partners from the very beginning; those who are willing, but cannot make the change even if you help them; and those who don’t want to be part of it at all.” Finding and energizing the first group, he added, is essential: They can model and help spread the change you want the company to follow.

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