OVHcloud: The Triple Lindy of Cultural Integration
By Russ Reeder, former President & CEO
I am a big believer that a strong, diverse team can accomplish great things. But only if the team trusts each other, communicate well, and has a great work ethic that allows people to fully engage and enjoy work. In other words, only if the team has a strong culture. Throughout my experience in business, I have gathered many stories related to culture. The most compelling –– and hopefully helpful –– have to do with sustaining a culture in challenging circumstances. Specifically, operating as a subsidiary of a larger company.
I’ll start with the easier of the two, running a successful technology company and selling to a larger company. When I was President of Media Temple, everyone in the company knew what we did, our values, and where we were going. Everyone understood who to go to when it was tough to deliver on our performance, technology, or cultural expectations. This is a very important point that I want to stress: culture breaks down when people are doing everything they can to maintain the culture that the company is trying to promote, but they still fail for reasons outside of their control.
As a stand-alone company, our culture thrived. We maintained a culture of performance and high expectations of one another. We had a fun work environment with morning yoga and team mud races. But everything changed when we sold to GoDaddy.
Things changed not because GoDaddy had a drastically different culture –– in fact, they too had a culture of performance and fun –– but because as a smaller division, the team struggled to feel their unique value. The yoga and mud races were still there, but the day-to-day jobs had a new dynamic. Once we were acquired and were just a division of GoDaddy (a previous competitor), people had to come to the realization that is was not all about Media Temple anymore. Worse yet, we had to explain to our customers why we sold and convince them that we were still committed to delivering the same level of service. Losing some of our identity (and pride) by selling to a competitor was the first hurdle. Not insurmountable, but still an obstacle to overcome.
The real challenge came when Media Temple employees didn’t know who to go to for help. When previously they could solve a challenge independently or with a local team member, now it wasn’t clear who had the authority to help them. This made it feel impossible to have their challenges prioritized and get the job done.
As an Executive Leadership team, we realized that we needed to align our global priorities across brands and to improve communication. We improved over time, but it required constant focus at all levels of the organization. We failed whenever people felt disempowered after the acquisition. We succeeded when people felt they were now part of a larger team and together could build on the two brands, technology, and customer base.
The second culture issue is a closer reality. The reality over the past two years of my CEO tenure at OVHcloud US, a wholly owned subsidiary of the French-based cloud hosting company, OVH. After KKR and Towerbrook invested over $225 million into OVH, I joined to help start and grow OVHcloud in the US. Two years ago we put the plan together to grow the US into a $100 million subsidiary, and within 7 months closed an acquisition of a division of one of our partners. We quickly grew OVHcloud from one employee based in San Francisco and no customers, to 250 employees with $60 million in revenue and over 500 mid to enterprise sized customers.
Sounds easy, right? Not at all.
Plus, now we had the challenge of integrating and developing three different cultures: the dominant culture from our parent company based in France, the culture of the new employees that joined to grow OVHcloud in the US, and the culture that the employees brought over from the acquisition. Like the GoDaddy/Media Temple example, it was easy to promote the fun side of our combined cultures. It’s amazing how everyone can agree to the fun things we did, like pushing for people to take time off to re-energize, stay healthy, and give back to our community. We’ve joked on the management team that this was the “Triple Lindy” of cultural integration and growth.
The most challenging aspect came down to making it easy for people to accomplish their goals and succeed in their positions. There we were with a newly-acquired, high-performance team that just joined a small division of a French owned company. Since we were a new wholly owned subsidiary, we had no finance systems, no HR systems, and data centers that were still under construction. Try performing the “Triple Lindy” of cultural integration under those circumstances!
Still today, two years into our journey, the hardest part is aligning goals to make sure we can make everyone successful –– even if they do not have full authority and control over all the inputs. To do this, we are constantly working with the executives at OVH Group and OVHcloudin the US to align goals and prioritize tasks. We experience a huge cultural breakdown when people feel like they are failing for reasons outside of their control. This is where the management team continues to focus to bring clarity, goal alignment, and accountability to the entire global organization.
These two examples have something in common, they are both smaller divisions of larger companies. If you’ve ever been in the position of working in a smaller brand, subsidiary, or newly acquired company –– or even just a new employee joining a new team –– I’m sure you can relate. If you are part of the acquiring, larger organization, it’s your responsibility to make sure that there is goal alignment across divisions.
Ever since my management days at Oracle, I’ve acquired, integrated, and run many companies. The cultural responsibility always goes to the larger, parent organization. Even with a clear purpose and vision to set the direction, a clear mission to ensure that people understand the short-term tactics and strategy, and established values so that people understand the rules of the road, you must take the time to ensure all employees have the proper channels to go to for help and are empowered to be successful.
Culture breaks down when a company does not have the processes for everyone to perform. The clearer the expectations are of the employee and the quicker your people can raise an issue, the sooner your company will have a bulletproof culture of performance that grows from within.