The Challenge: When a company acquires a new firm, even if it’s just across the street, its human resources leadership must navigate the inherent challenges of integrating two separate workforces. Consider that complexity on a global scale, and you’ll have an idea of what Dean Kepraios faced in 2015. His client, an international company with 45,000 employees across 40 countries, acquired a divested firm with 20,000 employees in 55 countries. The two had completely different organizational structures. Because of the seller’s requirements, Kepraios had only five months from the deal’s announcement to closure, and a firm deadline that his client would assume all HR duties on day one.
It had to be evolutionary. . . . The culture change would be too significant all at once.
The Strategy: Kepraios’s team began planning the integration during the due diligence phase. The team focused on the 40 overlapping countries, but made sure to educate the client on the HR implications of the 15 new countries. The transition also required a new HR delivery model, which incorporated some of the target company’s practices. Kepraios relied on the knowledge he gained at Booth in Organizational Design and Governance and elements of Negotiations to demonstrate the need for change.
“While this deal was revolutionary from the perspective of HR organizational design, it had to be evolutionary with my client from the perspective of implementation because the culture change would be too significant all at once,” he said.
To uncover any risks during due diligence and explain the need for change, Kepraios started transitions in areas new to the client and focused on one part of the world. This allowed the client to learn along the way, and gave Kepraios the chance to show progress. He also gave the client case studies to show how success would look, allowing for a smoother design of roles and responsibilities and drafting of decision guidelines, which led to high client engagement. The change is ongoing and will be used elsewhere, with adjustments planned for geographic and cultural differences.
The Takeaway: When acquiring a company, explore possibilities to incorporate the target’s best practices during transition. The acquirer can reap significant rewards and deliver the value that it committed when announcing the deal.
The Challenge: How do you connect an entire country? In 2009, Australia’s government embarked on its biggest infrastructure project ever—a national broadband network that would bring high-speed internet to all its citizens. But well into construction, the project was behind schedule and projected to go over budget. In October 2013, Australia’s National Broadband Network brought The Boston Consulting Group on board to correct course, and deliver the fastest internet at the lowest possible cost to taxpayers as quickly as possible.
Bringing better internet to all of Australia posed ‘a massive geoanalytics problem.’
The Strategy: In urban areas, fiber optic lines directly connect homes and businesses to deliver fast internet capability. However, it was quickly evident that relying on this single solution would be cost prohibitive in sparsely populated areas, said Kaustubh Wagle. Australia has roughly the same land area as the contiguous United States, but less than 8 percent of the population, adding to the challenge. “It was a massive geoanalytics problem,” Wagle said. As part of The Boston Consulting Group’s project leadership team, Wagle co-managed more than 30 handpicked consultants assembled from around the world and hailing from various industries, including telecommunications, technology, and construction. They broke down the massive project into modules to create a bespoke solution, all the while keeping in constant communication.
They researched all available broadband technologies, from fiber and cable to fixed wireless. Using big data, geoanalytics, and advanced analytics, they estimated how much each technology would cost and how quickly it could be deployed. Using complex modeling, they optimized a solution to deploy broadband service to individual households and businesses in more than 60,000 distinct distribution areas nationwide. This customized solution is estimated to save taxpayers AUD 30 billion and cut construction time by four years. The project is expected to be completed by 2020.
The Takeaway: Solving big challenges requires a multifaceted, creative approach. Look at every step of the project to leverage expertise, even if it’s from other industries, and use breakthrough analytic tools to come up with a purpose-built solution. Booth’s analytical rigor in particular prepared Wagle to take on challenges like these in his consulting career, he noted.
The Challenge: Thanks to mobile and digital breakthroughs, people now expect all of their interactions with big companies to be simple. In insurance, for example, people think that a basic task like purchasing insurance or filing a claim should be easy to do online or on their phones. But most insurers aren’t set up to meet that need, and instead still require customers to contact an agent or call center. At the same time, new, technology-driven companies are making tempting offers with the promises of a lower price and better service, while comparison sites let customers find the cheapest deals at the touch of a button. Insurers are in a bind: they need to lower their costs while also making big improvements to the customer experience. How can they do both at once?
These are radical changes for a company and its employees.
The Strategy: Alex Singla, senior partner at McKinsey & Company, discovered through extensive customer research and working with insurance clients that customers want to dictate how they interact with their insurer. Because all customers are different, insurers need to offer a wide range of interaction options, combining the latest mobile apps and chat services with long-standing channels such as agents, desktop sites, and phone support. Customers also don’t want to be locked in to any one option: they want to be able to start their interaction on their desktop and, if they get interrupted, finish it later on an app rather than having to start over. This is the “omnichannel” world, Singla explained: all channels, all the time. To be successful, a customer-service platform must provide seamless integration no matter which channel customers use, based on design thinking that’s user friendly and easy to navigate.
Digital solutions are a big part of the equation, he continued, but what’s just as important is change management. The most advanced technology won’t make a lasting difference unless the company buys in, from the C-suite to the front line. “These are radical changes for a company and its employees, and it requires a level of coordination, coalition, and collaboration before you can transform anything.” His work further showed that while the changes need to be C-suite driven, the front line has a crucial role to play in relaying customer insights to the entire organization.
Everyone—from the sales team to the IT department—needs to hear that customer feedback so that they can all participate meaningfully in designing a better experience. Based on his clients’ experience in using this model, Singla said the journey from idea formation to full-scale implementation for all customers and employees can be two to three years for a large institution.
The Takeaway: Business leaders know that great service comes from a customer-backed perspective. The hard part is building a company’s processes so that they reflect that perspective every day. A successful transition requires not only digital tools, but a solid focus on internal change management, where all stakeholders help create a new relationship between customer and company.
—By Debbie Carlson
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