How a culture of trust helped this CEO and her team survive acquisitions

This is how PDRI by Pearson has spent the last two decades.

“We were venture-owned, publicly traded,” says Elaine Pulakos, CEO of a talent management solutions provider. PDRI’s current owner: publishing and educational services giant Pearson, which bought it last year.

But here’s the really interesting part. Throughout, PDRI has maintained largely the same leadership team and continued to grow its business.

How? Remaining a wholly owned subsidiary of PDRI has helped maintain its culture, says Pulakos, who has been CEO since 2010. But she also appreciates leadership’s focus on building “a high-performing culture, with engaged employees who can withstand a whole host of disruptions.” and change and continue to keep our key players in place and achieving positive results.”

A lot of this comes down to trust.

A high-performance culture requires a foundation of trust, says Pulakos, who has a doctorate in industrial and organizational psychology. For a leader, building trust among employees is just the beginning. They also need to embed certain trust-building behaviors into the culture and have their teams address those behaviors in the same way, Pulakos maintains.

PDRI, whose clients include Fortune 500 companies and the U.S. government, has examined how to build trust in several studies. One line of research led the company to develop a formal performance management system, but it turned out that this approach could backfire.

“High performance and engagement really come from good communication, trust and partnership between leaders and team members, not from ready-made, planned actions,” says Pulakos.

In its research, PDRI found that two trust-building behaviors predominate. First: informal real-time feedback – recognizing people for good work and flagging problems that need solving.

The second key behavior? Helping team members solve problems. For a leader, that means “pitching in, sharing the problem, taking on appropriate responsibility, and really showing your team members that they support you,” Pulakos says. “Conversely, blaming, pointing fingers, hiding from problems, creating fear and defensiveness – these things actually destroy trust, as does micromanaging and second-guessing what team members are doing.”

Pulakos co-authored a 2019 study on how organizations and teams can become agile and resilient in a rapidly changing world. A paradoxical conclusion after examining 300 companies around the world: you cannot be agile if you are not stable first.

“And a big part of building stability comes down to leader and team behaviors that build trust,” Pulakos says. “The same behaviors we found in our work on performance management turned out to be incredibly important for building agility.”

When such behaviors were an integral part of the culture of both leaders and employees, the impact on the bottom line was enormous, Pulakos notes. “On average, companies that were better at this had a 150% higher return on invested capital and a 500% higher return on equity.”

How did it all work out for PDRI and its 100 employees?

Pulakos admits that some acquisitions have been difficult, mainly because each new owner brings with it a change in strategy. For example, one wanted PDRI to focus on the government market, while another insisted it focus on the private sector, she recalls. “It was shocking.”

But PDRI is dealing with these changes through opportunism, Pulakos explains. The hallmark of building stability is “going out into the world, looking for opportunities and actively taking advantage of them when they arise,” he says. “Because it builds self-confidence, which stabilizes.”

Confidence is one thing, but PDRI doesn’t expect success every time. “If we try something and fail, we fail quickly and move on,” Pulakos says.

PDRI appears to have found ownership stability with Pearson, which insists it has no plans to sell. If that changes, Pulakos and her team will have their playbook. “We just take it in stride, try not to get crushed, and just tell our people, ‘We’ll take it one step at a time.’”

And they say that only cats have nine lives.

Nick Rockel
[email protected]

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TRUST EXERCISE

“Last month, speaking to a crowd of supporters, former President Donald Trump injected new momentum into the November election – and reignited the debate over the future of the U.S. digital asset industry – by declaring: “…if you’re for crypto, you better vote for Trump.” It wasn’t subtle, but it was an acknowledgment of the growing importance of cryptocurrencies as a pressing political issue. They should pay attention to other elected officials and candidates for office.

According to a recent survey by DCG and The Harris Poll, Americans would like candidates to discuss cryptocurrencies in a more substantive manner. One in five registered voters in battleground states think cryptocurrency will be a major issue in the upcoming election – a percentage that no one could call marginal.

Cryptocurrency is a potential asset for Donald Trump – and a huge missed opportunity for Joe Biden and the Democrats. This is according to Anthony Scaramucci, founder and managing partner of SkyBridge Capital, and Kristin Smith, CEO of the Blockchain Association.

As Scaramucci and Smith point out, over 50 million Americans own cryptocurrencies. But they believe the Biden administration has done everything in its power to thwart digital asset innovation, even though a decentralized financial system should appeal to both progressives and libertarian conservatives. In cryptography, Scaramucci and Smith see a rare opportunity for politicians to tap into a young, diverse and tech-savvy group of voters.

For Democrats, they argue, this means getting rid of the unfair perception of the industry as an unregulated playground for illegal actors. By framing Democrats’ support for cryptocurrencies as a vote for American innovation, Scaramucci and Smith are dangling the carrot that it could also decide the knife-edge presidential election. Talk about political currency.