Agenda
1
Organiza(onal model and Unilever control extent
page 3
2
New organiza(onal structure and cost reduc(on
page 4
3
Risks and synerge(c effect priority
page 5
4
Talent and reward management
page 6
5
Change management plan
page 7
6
Integra(on of corporate culture
page 8
7
Appendices
page 9
Acquisi(on of Inmarko is an important strategic decision to achieve our long-‐term aim: to double business up to 2018! Autonomous model
Authoritarian model ① Build into the exis7ng organiza7onal
structure ② Full integra7on of business processes ③ Replacement of top management ④ Brand name of its acquirer ⑤ The mission and values of the acquirer ⑥ Corporate culture of the acquirer
⑦ Ac7ng almost independently of the acquirer ⑧ Acquiring company sets up an overall objec7ve ⑨ Business processes are controlled by managers
of the mother company ⑩ Brand names remain the same 11 The personnel replacements aren’t numerous 12 Iden7fica7on of the roles of the top ranking managers 13 Corporate culture stays unchanged 14 Values and principles remain stable
Combined model 15 Flexible op7ons for incorpora7on 16 A mixed team of top managers with
hiring new staff 17 A selec7ve integra7on of business processes 18 Different op7ons about the brand name change 19 Mixed corporate culture based on effec7ve factors
Inmarko will be a par(ally independent unit with the mixed management group, corporate culture and unchanged brand name
Ben & Jerry’s
Food
BesMoods
Comparable companies Current Management Segment Market Brand experience share recogni7on ra7o
Food
10-‐12%
20-‐25%
25-‐30%
1.9
20 years
20-‐24%
0.93
20 years
Model features
Unilever control extent (level) Managerial Sales Decision-‐making in business processes control
8, 10, 15, 16, 17, 19
8, 12, 15, 16, 17, 18, 19
Inmarko
Combined model Food
16-‐19%
30-‐40%
1.5
15 years
ü Par7ally independent ü Mixed top management ü Control of opera7onal marke7ng and logis7c process ü Unchanged brand name ü Mixed corporate culture
3
New organiza(onal structure Unilever has a hybrid, matrix form: 3 divisional regions, Today Inmarko has the 2 product segments, 5 func7onal segments. Inmarko as well as Unilever RUB has a linear-‐func7onal organiza7onal structure following values that it is eager to keep Management ü Responsibility for your own result ü Flexibility and afen7on to every market and to every consumer ü Involvement of the employees through trust and openness ü The atmosphere of mutual help and support in order to achieve the joint goal
Financial
Logis7cs Produc7on
Legal
Marke7ng Commercial Sector
East
Central region
Economic Security
Key accounts
Reduc7on Time Time before Constant Achievability (mln EUR) lag achievement effect 1 year
0.974
1 year
0.312
2 years
0.187
2 years
0.707 1.060
2 years 1.5 years
Automa7on, QA/QC
ü Ensuring close rela7onship between consumers and producers ü Substan7al experience of management ü Specializa7on of managerial labor ü Leader in the segment
Moscow We are aimed at produc(vity growth in 2.5 (mes up to 2010 => labor force should be reduced by 50% due to synergy effect
Cost reduc(on can be achieved by means of synergies
Purchase of raw materials and packing Brand promo7on Transporta7on and storage Administra7ve costs Sales costs Technologies
HR
New linear-‐func7onal organiza7onal structure of Inmarko resembles the old one, but management is headed by the board of directors and the president of regional department Unilever RUB
0.13
Total: 3.254
Customer Development Marke(ng Supply Chain General Management Facili7es (incl. security) Total (main departments) Deliver Make Plan Total (produc7on) Marke7ng Research Communica7ons Finance (incl. regional) Research & Development HR (incl. regional) Informa(on Technology (incl. regional) Legal Total (support func7ons)
Inmarko 570 (-‐2058) 9 (-‐14) 149 (-‐50) 12 23 763 262 (-‐470) 1595 25 1882 1 1 112 (-‐124) 0 (-‐9) 11 (-‐50) 22 (-‐50) 15 (-‐7) 162
Total
2807 (-‐2832)
4
Post M&A risks can be mi(gated
10
Medium
2
8
3
5
7
4
Low
Significance
1
9
Low
Valued employees
Medium Probability
1 leave Inmarko 2 Integra7on failure
3 Governmental policies
6
Levers of value crea(on Protect base Combina7onal Transforma7onal
High
6
Highest-‐priority synergies
4
Produc7vity declines
5
Projects go over budget 10 Passive and ac7ve and pass their deadline resistance emerge
9
4
6
5
7
7
7
Capital Levers of value crea(on
5
2
• Op7mize hedging and risk posi7ons • Reconfigure warehouse network
6
3
• Redesign routes market, op7mize distributor network • Enter products, geographies, channels new to both companies
4
• Duplicate overhead • Procurement • Overlapping sales branches
Effect of risk-‐allevia7ng measures
3
1
7 Clientele of companies 8
2
• Outsource/offshore back-‐office func7ons • Establish industry alliance for distribu7on
isn’t merged Macro-‐economic crisis Increasing pressure from mul7na7onal compe7tors
Cost
High
Distributors refuse to con7nue coopera7on
1
7
Revenue
• Cash flow and liquidity posi7ons • Leverage lower funding rates • Cross-‐fer7lizing products • Cross-‐fer7lize products, geographies, channels • Protect current customer accounts • Prevent talent poaching • Manage labor to avoid poten7al adverse ac7ons, business disrup7ons, nega7ve impact on top line
Primary Secondary Ter7ary
5
To get the greatest benefits from the merger HR-‐management of Unilever should form an effec(ve united team Possible solu(ons
Issues to be solved
Key employees should be treated the most carefully: it’s very important to listen to them, s7mulate them to retain and use their Inmarko managing experience
Which of the employees should be assigned to the managing posi7ons? Who of them should receive an appointment on the equivalent grades?
«Opinion shapers» are also useful for the integra7on process: such people can help to create a posi7ve image of the acquisi7on so they should be especially supported by Unilever All other employees should have a choice: they can either be transferred on the equivalent level or leave the company with a good dismissal compensa7on
What incen7ves should Unilever apply to keep those Inmarko employees that would be needed to assure efficient performance auer integra7on?
• • • • •
High salaries and bonuses Compensa7ons, benefits and rewards Career prospects Higher level of responsibility Opportunity to work in central office
How to adapt new employees to the exis7ng career management and professional development system?
Process of adapta7on should go through the introduc7on of Unilever Performance Management Wheel and with the use of web-‐enabled PeopleSou among new employees (see the Appendix)
How to coordinate and unify current reward system in condi7ons of the integra7on project?
The main aim of reward system in condi7ons of acquisi7on is to provide comfortable working condi7ons to new employees that’s why Unilever should consider such expenses as social taxes, reloca7on cases, harmoniza7on and Inmarko on-‐top bonuses
General principles:
• • • •
Informa7onal openness of the restructuring Minimizing risk of resistance to changes Competent selec7on process Support of both re7red and retained employees’ loyalty
6
In order to implement Significant change a few steps of change management process should be undertaken Ini(a(on
Planning
Implementa(on
Review
Determine Develop ① Implement test plan ① the risk ① test plan ② Review informa7on ② the impact ② rollout plan ③ the type of change ③ change confirma7on ③ Create work order ④ the change schedule plan
Closing
① Validate the result ① Con7nue if approved ② Communicate new status ② Record change status ③ Close program ③ Implement the change or reschedule
Plan of most-‐merger integra(on ac(vi(es for 12 months comprises both organiza(onal and cultural arragements First 100 days are extremely important Jan
Feb
Mar
Apr
Is integra(on successful? July Aug May June
Sep
Oct
Is integra(on successful? Nov Dec
Type of ac(vi(es First 100 days The rest of the year Weekly Change management mee7ngs Weekly Weekly Change status report Weekly Monthly Reports containing advances Monthly Monthly Corporate culture events Twice a month Twice a month Trainings Twice a month Twice a month Q & A sessions Constant Campus communica7ons Three 7mes a month Twice a month Constant Psychological monitoring Constant Constant Communica7on with mentor Constant
Key performance indicators Purpose ~ 3% 20% Discuss pros and cons Market 16% Gradually adapt to changes share Track advances < 1% Estabilish shared vision Inmarko Effec(veness Total Unilever Develop team spirit 150% Develop openness 50% Improve network Turnover per React quickly in case of conflicts employee Track individual performance 2008
2010 7
Cultural integra(on is highly dependent on change management policy and takes into account all features of the merger, determining the success of post-‐merger integra(on Important factors leading to the success of the merger (ra(ng: 0 to 5)
Factors determining success of post-‐merger integra(on
Cultural integra7on Opera7onal synergies Process op7miza7on
82% 60% 46% 20%
Integra7ng products Integra7ng cultures Reten7on of key employees
4.18
Shared vision
4.36
Annually
Reten7on of key customers
4.45
Strong management team
4.67
Communica7on
4.74
Once every two to three months Once every six months
Takeover Immediately auer signing
Team structure Fundamental decisions Change management Unilever values ü Integrity ü Respect ü Responsibility ü Pioneering ü Customer focus
4.23
Weekly 14% 1%
1%
20%
Features of the merger: Costs Synergies Fast, under 7me pressure Speed All areas Extent Integra(on spirit Integra(on start
4
Clean team In advance, implicit En passant Inmarko values ü Responsibility ü Leadership ü Innova7ons ü Teamwork ü «Customer Mania»
Growth Mid-‐range perspec7ve No or par7al integra7on
64%
Monthly
Increasing business twofold with a decrease in the nega7ve influence on the environment €80 bln
Merger of equals Deferred un7l closing Joint team Explicit, extensive Explicit, comprehensive Unilever + Inmarko values Company helps people feel befer, look befer and get more from life due to friendly products and services. Everyone in the company believes that all together we can help make a big difference to the world
€40 bln
Influence on business
Stabiliza7on of the organiza7on
Amer merger how omen does management team meet to discuss the progress of the integra(on progress?
€44 bln
Influence on environment
8
Talent management
Individual Differen(ated Pay for Performance
Goal Seqng
Forced Distribu(on
GPS Feedback
Building talent and teams
Bias for ac(on
Learning & Development Plans
Performance Ra(ng
360 Feedback
Tools of web-‐enabled PeopleSom Talent management process
E-‐tool
Recruitment (incl. applying to a job internally or externally)
VURV
Learning
Learning Management System
Goal sezng, performance evalua7ons, PDP online system performance ra7ngs, succession planning, high poten7al lis7ng, etc. Reward
e-‐Reward system
1. Goal Seqng – first step in the annual Performance & Development Planning. Sezng 3+1 (3 key workplan goals + 1 key development plan goal) 2. Learning & Development Plans – discussing long-‐ term Individual Development Plan (IDP) with a line manager; using it as input for short-‐term development plan goal 3. Performance Ra(ng – deciding on the appropriate personal Performance Ra7ng (between 1 & 5), basing on a performance regarding 3+1, SOLs, and core job responsibili7es 360 Feedback – personal feedback from peers and 4. manager etc. (up to 15 people) line 5. GPS Feedback – Global People Survey ques7onnaire which aims to get opinions of Unilever employees regarding working at Unilever 6. Forced Distribu(on – differen7a7on between peer managers in a certain func7on and at a certain work level 7. Differen(ated Pay for Performance – performance ra7ngs (1-‐5) are directly linked to bonuses, each performance rate has its own bonus range without overlap between the rates
10
Intelligence: How to think?
Interpersonal: How to interact?
Energy: How to work?
Unilever and Inmarko corporate culture. Employees’ traits Happy with where you are Quite ambi7ous Extremely ambi7ous Leisurely, relaxed Passionate about key interests Driven, obsessive Peaceful, gentle Quite compe77ve, adventure-‐seeking Aggressive Pessimis7c, sees the nega7ves Level-‐headed, can be detached Op7mis7c, sees only posi7ves Reserved Outgoing Highly extrovert Risk averse Measured risk taker Enjoys high stakes Steady pace Short bursts of high energy Persistent, tenacious, never stops Delegates Conscien7ous Workaholic A few close friends Sociable Knows everyone Consensual Engaging, persuasive Forceful, dominant Focused on self Caring, but self first Selfless Mild mannered Self assured Extremely confident, high self-‐esteem Says anything to get things done Honest, some white lies Highly principled, can be too honest Serious, professional Fun, entertaining Daring, provoca7ve, edgy Thick skinned Forgiving Retaliatory Thrives away from stress Copes with stress, highly resilient Needs stress to thrive Analy7cal, highly structured Highly intui7ve Free form Comfortable with what you know Progressively learning Hungry for Informa7on Detail oriented Strategic thinker Visionary, can have short afen7on span Happy for others to create ideas Crea7ve in ideas Highly experimental Highly inquisi7ve Curious, open to new ideas Prefers "tried and tested" approach Steady, methodical Incisive, quick Knows it all Thrives in structured environments Copes with structure and ambiguity Thrives in ambiguous environments Inmarko Unilever
11
Organiza(onal health indicators
12
Suren Avanian
Anastasia Tikhonova
Anna Tikhonova
Igor Anosov
NRU HSE’14 Faculty of Economics
NRU HSE’14 Faculty of Economics
NRU HSE’14 Faculty of Economics
NRU HSE’14 Faculty of Economics
Achievements: • Winner of the All-‐Russian olympiad in Economics in 2010 • Twice recipient of the award given by the president of Russia • HQ 15% Changellenge Cup Moscow’10 • HQ MedXChallenge’13
Achievements: • Winner of the All-‐Russian olympiad in French in 2010 • Recipient of the award given by the president of Russia • HQ MedXChallenge’13
Achievements: • Winner of the All-‐Russian olympiad in French in 2009 and 2010 • Twice recipient of the award given by the president of Russia • HQ MedXChallenge’13
Achievements: • Winner of the HSE olympiad in Economics in 2010 • Member of the Student Council of the Faculty of Economics HSE • Semi-‐finalist Changellenge Cup Russia’13
• Semi-‐finalist Changellenge Cup Russia’13
• Semi-‐finalist Changellenge Cup Russia’13
• Semi-‐finalist Changellenge Cup Russia’13