Analyses
13 juil 21

How to merge Car Policies? Tips to avoid failure

Companies merge or are acquired by other companies constantly; it’s part of corporate growth strategies. But also, within a single company, the alignment of local policies into a regional or global policy can lead to its on set of worries. Here are 5 tips to merge car policies.

1. Understand the context

Mergers or acquisitions are complex events prior to which both parties decide about valuation, Shareholdership, boards and future state. Employee benefits are generally looked into as well, especially when both companies have a significantly different approach to the benefit structure.

Unfortunately, practical matters such as car choice, are rarely being put on the table. Most often, a few principles of integration can be found in the acquisition or merger side letters. These could state, for instance, that the benefit strategy of company A will be implemented across both companies. Although generic, these guidelines are not negotiable and often create conflict with works councils or unions, who see things differently.

Tip 1: Reach out to your legal to check the content of merger or acquisition documents closely, as it’s the starting point of the work you’re about to do

2. Map and quantify the “As Is” and “To Be”

If you’re harmonizing local car policies into a global one, or if you’re handling the effects of a merger/acquisition, you’ll be asked to defend the project in front of stakeholders and the employees, through unions and works councils. The first ones will look at the cost impact and alignment of benefits, whereas the worker representatives will defend the perceived value of the benefits.

Your “as is” assessment is essential: which benefits does the employee receive and how are they perceived? A smaller premium vehicles cannot be simply replaced by a larger non-premium vehicle, even at the same lease rate, as this might be perceived as a downgrade.

Tip 2: Mapping and quantification of the car benefits is essential. Your comparison table will the core element of the transition project, therefore, prepare it carefully and have it signed off to avoid reiterations and waste of time

3. Decide about strategy first

There’s thousand ways of merging car policies and, as the project evolves, you’ll notice that the views of your stakeholders are not aligned – everyone has an opinion about cars. At the start of your project, develop a few guiding principles on supply chain, vehicle selection, sourcing, safety, sustainability… and have these signed off by leadership. Make sure that your suggestions support the overall values and strategy of your company: this will make support from leadership a lot easier.

When starting the conversation with stakeholders, especially those who need the most cars (sales, field services), set the scene by sharing these guiding principles and underline that these have been agreed upon by the business leaders.

Tip 3: Formalising context and guidance in policy merger projects is the foundation of the work to be done

4. Pay attention to the transition period

Everyone will be interested in the outcome of a policy merger project and especially looking for the answer to the million-dollar question: “What car will I be driving?” Nonetheless, the transition from as-is to to-be is a much more important question. You have several options, going from big bang to phase-out.

Whatever your recommendation is, it will have impact on the employee, on your HR OPS colleagues, on the supply chain and so on. It will inevitably lead to questions and conflict and you’ll be surprised by the number of oversights as well as by the noise this will generate. If these questions and conflicts are poorly managed, the entire project will be questioned.

Tip 4: Transition does not only include a glidepath from old to new, it also covers the governance of the transition period, including a governance body that includes stakeholders

5. Necessity and risks of communication

Comms are important. Unfortunately, in a situation of merger or acquisition, the employees will receive constantly updates and comms from all departments and will end up not reading whatever you’ve carefully prepared. Therefore, preparing a simple email is not enough if you’re looking for buy-in: employee engagement requires a communication campaign (Message House style) with different touch points.

Timing is another element that you’ll need to look into: communicating too early (e.g. before works council alignment) is damaging. Involve legal as well as your comms specialists for support.

Finally, the interactions with the worker representative bodies is a job on its own. Find support from the right people and talk to those who have done it before. Make sure you understand for each legal entity if there’s a risk of opening the entire collective employment agreement and understand if your project requires information, consultation or approval from works councils.

Tip 5: A comms strategy exists only partly to inform people. It is an essential part of the project and, if done well, the main contributor of its success. Therefore, involve a wide range of functions and specializations and have it signed off by leadership

Conclusion

These are 5 tips to avoid failure, but at the same time, policy mergers also offer many opportunities. Becoming more sustainable, implementing electric or mobility, reviewing the supply chain are only a few of them. Use your project as a context for change.

Finally, develop a storyline. The “how” is important, but so is the “why.” Find that hook that explains the bigger reason why you’re proposing a change model. The bigger the hook, the better: sustainability is great one, but others exist.

Picture Credit: Shutterstock

Authored by: Yves Helven