Occasionally in business, one plus one can make three. When it comes to an acquisition though, the result is very rarely greater than the sum of its parts. A recent Harvard Business Review report found that 70% - 90% of all mergers fail. Even for those that succeed, there can be problems. All too often one of the companies involved can become diminished or minimised in the process - gaining a parent company but losing its unique character. However in certain circumstances quite the opposite can occur. Add complementary companies together in the right way and they can become much more than their constituent parts.
One of these rare moments came in December 2016 when Mercer acquired Thomsons. You could forgive some for being sceptical about the acquisition. “Global consulting giant acquires feisty British start-up” – corporate leader purchases small, agile tech business… the news could have been received less than favourably. Thankfully for us the story one year on has been a success overall. But why? When so many organisations struggle following an acquisition, what was it that made this one work?
Firstly, both Mercer and Thomsons had a clear idea of what they wanted to achieve through the union from the outset: Mercer wasn’t looking for a company, it was seeking a competency – a best of breed, global technology solution to wrap around its first-class consulting and broking services. Thomsons meanwhile embraced the opportunity to be part of something bigger to be able to further scale globally, driving forward fundamental changes in the benefits ecosystem.
Together we knew that we could deliver an integrated end-to-end solution that global enterprises are crying out for – one which would enable them to achieve the best possible outcome from their benefits spend, aligned to their corporate objectives and the personal needs of their employees. Combining Darwin, Thomsons’ global Software as a Service benefits platform, with Mercer’s broking and consulting capabilities offers clients unprecedented insight into their global workforce and their benefits requirements now and in the future. It delivers a globally consistent approach both in terms of technology and thinking and it enables comprehensive management of risk, compliance and legislative change.
Thomsons was already automating benefits administration and communications. Partnering with Mercer meant that together we could revolutionise the entire benefits supply chain, unlocking efficiencies, innovation and cost savings for clients every step of the way – from vendor to broker to HR team. For instance, we can now provide real-time membership data to insurers, so clients receive better pricing and a better understanding of their risk and cost rather than quotes based on their membership data that is a year out of date. We can marry Darwin analytics data and Mercer consulting to deliver data-led insights to global clients, overlaid with unparalleled local market experience. With benefits admin now automated, local benefit teams can focus on more transformational activities including communication campaigns and content.
By focusing on our joint strategy, clients, our employees and IP - things that add value - we hoped to maintain performance over the acquisition period, but ended up far exceeding what we’d anticipated. Our acknowledgment that we individually brought something of value to the table laid the groundwork for mutual respect – which I believe has been a critical factor in our success.
Another significant factor has been Mercer’s willingness to preserve Thomsons’ unique spirit. Thomsons’ culture is brave, open, can-do and innovative. It has a clear vision that its people support and work incredibly hard to make a reality. Their courage and passion means that the business has enjoyed phenomenal growth since its foundation, and the leadership team has worked hard to preserve the company’s nimble, entrepreneurial attitude despite its growing size. It’s this fast-paced agility that Mercer admired – and acquired – and is aligned with their vision and evolution as a business, so it makes absolute sense to sustain this.
While from the outside Thomsons and Mercer may seem like very different organisations, there are also plenty of similarities to celebrate. We are both incredibly ambitious – which gives us the enormous momentum we need to transform the global benefits landscape. We also share many of the same values. We want to empower our people to be the best they can be as individuals and as teams, and go the extra mile every time for our clients, in a way that is unmatched elsewhere. And we also believe in making work fun and enjoyable – as well as outside of it.
So what have we learned? A successful acquisition is not one-sided. One party may do the purchasing, but it’s integral that both respect and buy into each other and focus on creating value for clients that they couldn’t do on their own. Differences of opinion will inevitably arise, however with mutual respect and focus, these will never be enough to derail a successful partnership. It takes two to make a partnership and in Mercer Thomsons has found a worthy partner – and we’re ready to launch into 2018 and beyond together.