Merging employee benefits divisions of Metropolitan and Momentum
Merging two of South Africa’s largest insurance companies is a complex undertaking. When the aim is to reduce costs substantially without retrenching any employees, then the challenges multiply significantly. MMI Holdings Limited (MMI) is a South African-based financial services group listed on the South African stock exchange, the JSE.
The core businesses of MMI are: long and short-term insurance; asset management; savings; investment; healthcare administration and employee benefits. These product and service solutions are provided to all market segments through the operating brands, Metropolitan and Momentum.
This case study frames the employee benefits divisions of both brands. Marlene Dippenaar, the Head of Organisational Development at Momentum Employee Benefits, shared her experience and expertise for the purposes of this article.
Leadership challenges
Marlene shares her knowledge regarding the leadership challenges that EB faced as a result of the merger:
“Momentum Employment Benefits faced a couple of leadership challenges as a result of the merger. Prior to the merger, the EB business in Centurion (Momentum) and in Cape Town (Metropolitan) were equally strong. We had to integrate and merge these two businesses and this had an impact on our business strategy, structure, IT platform and culture. An integrated business plan, strategy and new structure had to be developed and proposed, and the branding strategy had to be finalised for Employee Benefits. To oversee all of this change, a new executive committee (Exco) had to be put in place that would be representative of Momentum and Metropolitan.”
“Once the new Exco was in place, a strategy session was held where the business plans, the branding and the systems decisions were finalised”, continued Marlene. “As a result, the roles of the new Exco members changed as well as the composition of their teams. The Exco then developed a change process that would integrate new team members and align business processes. Exco members had to take leadership positions that would build and embed a new culture – creating a ‘third cultural space’ within the newly-formed business unit. This ‘third cultural space’ serves to draw-in the most appropriate elements of the Momentum and Metropolitan cultures and add new elements that serve the unified organisation.”
“Appropriate retention of people was crucial in those insecure times” recalls Marlene. “Building trust in a new Exco team for the benefit of the bigger business was very important.” The responsibility placed on the executive was significant. Marlene says that “leading in a dynamic, complex and (at times) chaotic environment demands a specific level of self-awareness and specific thinking patterns in leadership.”
Approach to resolution
We asked Marlene about the process that was used to resolve the EXCO composition.
Marlene explained that a central issue was the design and structure of the Employee Benefits organisation in relation to its strategy. Otto Pretorius from QBIT was engaged to assist with this critical function. Working with Etienne de Waal – the Chief executive of the merged Employee Benefits organisation, the Employee Benefits business strategy and structure was clarified – as well as the key roles required to support the strategy . Once the design was finalized, the Exco positions were advertised and through a fair process filled. Following the announcement of the Executive Committee , Etienne de Waal conducted staff feedback sessions across all regions. According to Marlene, all of the Executive Committee members were satisfied with the transparency of the process as well as its outcome.
Other organisation development challenges experienced
In addition to the leadership challenges, Marlene says that “we faced change on multiple levels such as our brand identity (why we exist and who we serve); our process clarity (what we are setting out to excel at doing), our technology platforms; the roles and behaviours of our community, as well as the day-to-day operations issues of where and how we meet, what we discuss, and who is the room to address our daily business.”
“Our OD strategy played a critical role in the strategic alignment of the business and the desired culture of the people who make up Employee Benefits” says Marlene. “Working together, our OD team supported a series of integrated and aligned interventions, and I believe that we built credibility with the line. We also formed powerful relationships with leaders as business partners – because we delivered on our agreed quarterly objectives effectively, in a way that supported the health of the integrated organisation”.
Other highlights
We asked Marlene whether there were any interesting highlights for her during the merger.
Marlene responded saying how “the decision to use Momentum as our lead brand for Employee Benefits was not one we took lightly, but we believe that it is the right decision”. In addition, she is delighted that the majority of the senior management teams are in place and functioning; the brand is clear, and the decisions around systems platforms have been thoroughly considered and are now in development.
“As we look to the future, we are challenged to continue to grow our business sustainably against the backdrop of regulatory changes and fierce competition. We must continue with the work we are doing in relation to the transformation of processes, systems, culture and people and we must also shift our focus from the internal issues of the merger to the external issues of developing new initiatives to delight our current and future customers”, says Marlene.
