At the end of last year, Egencia released a white paper Mergers and Acquisitions: 7 Steps to Realign Your Travel Programme that quoted a recent trend suggesting deals are stronger than ever, despite the lack of stability worldwide both politically and economically. Indeed, while the old-school wisdom was always that stability is what propels mergers and acquisitions, a quick look at deal activity in 2017 shows that we closed the year breaking the US $3 trillion barrier for the fourth consecutive year in a row (Mergermarket Global M&A Trend Report 2017.) Regardless of the reasons behind mergers and acquisitions, it’s important that travel management companies and your in-house travel manager appreciate the complexities of merging two potentially very different travel programmes and policies together. Below we have outlined 6 steps to keep in mind if your company is going through a merger and acquisition.
1. Comparing two different policies
When confronted with two very different travel programmes it’s a good idea to go beyond the in-house travel manager (of course, you may now have more than one) and research the different travel management companies out there (Egencia included). This is because a travel management partner may take a more objective look at both policies. You want a best-in-class policy; the strongest elements of each programme merged. Of course, when formulating this new policy it’s vital to communicate the major changes to all those who will be affected. More on that below...
2. Merging different travel cultures
Before you dive head first into merging two different travel programmes consider the differences and similarities in culture. Does the acquired company use a travel manager whereas the acquirer is used to partnering with outside travel management companies? When large businesses in particular acquire smaller rivals, the differences in mindset can be very large. If you do not tread carefully issues can arise. Immediately forcing one company to adopt and embrace the culture of another is not a good idea.
3. Consolidating different travel management companies
In many cases, the acquired company will have an incumbent travel management company that may be different from that of the acquirer and the contract may need to run to its conclusion. Consider extending the contract of your current travel manager on a rolling basis until the contract of the acquirer is up. You can then run an RFP for the combined business. During mergers and acquisitions it is not uncommon for some companies to go on acquisition streaks, fuelled by readily available capital from the markets. Still, reviewing travel arrangements every time a new unit comes on board is likely to be a waste of time for everyone, especially your travel manager. Instead, wait until the company pauses for breath and then think about consolidating.
4. Adapting to different travel patterns
Mergers and acquisitions shake up every department. Specifically, your travel manager has to adapt to not only a new, potentially larger travel programme, but also to different travel patterns. In certain situations your travel manager may find that he or she suddenly has a much larger budget to oversee. This is a perfect opportunity – and take special advantage of the travel management companies you chose to partner with here – to negotiate more attractive corporate rates with favoured vendors. Of course, mergers and acquisitions don’t automatically mean growth. Perhaps your company has gone from being a large, multinational organisation with hundreds of business travellers, to a smaller, spin-off entity with a fraction of the travellers and a fraction of the previous budget. This is where your travel manager has to be creative. Teleconferencing, anyone?
5. Getting buy-in from the top
As with other integration projects, combining two travel programmes into one is going to need top-level support. This is especially the case if the two travel policies are widely different. This is a good time for your travel manager to show their worth to the CEO, CFO and other senior management. Indeed, everyone will be so busy, with their own projects to oversee, that making it clear that you “own” this space during the merger will ensure you stay valuable. And should the company be growing? This is the time for your travel manager to propose to top brass the benefits of corporate travel management companies.
6. Communicate with your travellers
Mergers and acquisitions bring out the best and worst in people; those excited to be part of a growing company, and others nervous their role may no longer be applicable. Be sure to listen to everyone on all aisles. If you are running traveller focus groups, get travellers from the two companies together at the earliest possible opportunity to find out what they expect. In a world of traveller-centricity, this is now more important than ever.
7. Take a step back and breathe
Mergers and acquisitions provide the perfect opportunity for your travel manager to review your existing travel policy and compare it to the practices of the acquired company. You don’t want to rush in head first and start making changes. Sit back and ask: Which policy is more efficient? Which programme better encourages online adoption? Where can costs be cut? Whether you are a travel manager or an executive assistant who appreciates you are about to have your work cut out for you and have a line-up of travel management companies ready to go; take a deep breath and remember. Mergers and acquisitions provide the opportunity for growth and change – embrace it. Get practical tips on how to successfully manage changes to your travel programme.