Connecting...

Reo Group merger stalls, uncovers silver linings

Reo Group merger stalls, uncovers silver linings

June 23, 2021 by Catherine Kane

The planned merger between Reo Group and Cox Purtell has stalled, but the agencies’ leaders have learned some valuable lessons, and the process overall has silver linings, says Reo Group CEO Marcelo Concha.

After last year announcing the intended merger, the process “deviated” due to corporate structure matters that couldn’t be resolved, he tells Shortlist.

Concha notes Reo Group completed a fuss-free merger with TDR Group last year, but the Cox Purtell deal got to a point where there would be an inevitable delay (beyond 12 months), which neither party felt was acceptable for their teams.

In the absence of a suitable short-term solution, Concha says the deal is not moving forward, although the companies “haven’t said no” to something down the track.

And the relationship between the two businesses remains strong, their leaders say.

“This doesn’t impact either Cox Purtell or Reo Group operationally, and both organisations continue to grow and work collaboratively together,” says Cox Purtell managing director James Purtell.

“The relationship’s good,” Concha adds. “It’s probably strengthened the two businesses, because we share a lot more and there’s a lot of cross networking between the two companies.”

They are “treating each other as sister companies in the interim, which has been a really good outcome”, he says.

Key takeaways

Looking back, “99.9% of what we did, we did well, and I would do again”, Concha says, but he notes there was plenty to learn from that 0.1%.

A key lesson is the importance of really understanding the potential timelines.

“Our focus was on culture, and we really executed that well and to a high degree. We worked with a change manager and culture consultant to ensure we executed the program with ease. But what we didn’t plan for was the timeline it would take to merge the actual corporate structures themselves.”

The accountants, lawyers, change consultant and culture consultant each “did their role in helping the companies merge”, Concha says, but the “12-month delay was not something either party was prepared to give or was prepared for”.

Behavioural metric frameworks

As a result of the M&A activity, Reo Group has beefed up its people practices, including frameworks to support positive psychology around behavioural metrics, Concha says.

“We invested a lot into creating frameworks that spoke to behaviours in the organisation, making sure the values positively mirrored or at least complemented the behaviour that we were looking for in people.”

Reo doubled down on its philosophy on flexibility, for example, whereby “we want people to own their time”, and choose when they work, when they take time out, and when they prioritise things.

In practice, this means employees must come into the office on two days, but aside from that, they are free to manage their own time, he explains.

Concha, for example, is “super productive” at night-time, when there are no distractions, and he notes this wouldn’t work “in a typical corporate” with a nine-to-five policy.

As well as measuring productivity (“and it has increased”), he says consultants’ engagement and happiness at work has really “elevated” because of the new framework.

Beyond staff turnover, which at 10% is well below the industry average, a key metric reflecting the impact is absenteeism, which “has definitely come down”, Concha says.

Moving away from “standard” verticals

This year, Reo has formally launched its executive search business under executive and founding director Raghav Mehta, followed by its financial services and insurance practice under recently appointed executive director Jonathan Attwood.

The expansion is due in part to “the nature of roles coming up”, Concha says, as the market moves away from “traditional, standard verticals” to more “cross-disciplinary roles”.

And Mehta, who has been at Reo for 11 years, is tasked with helping clients understand “where their future talent needs are going to be”, as these skills shift.

 

*Article Courtesy of Shortlist*


Can we send you an email?

Join more than 7,000 other smart finance professionals by signing up to our newsletter. You'll get a monthly email with new blog posts,  job news, views, and insider tips. Don’t miss out on this valuable advice!