Synergy is a favourite word amongst those who practice 'corporatespeak' in relation to mergers – Synergy, or rather its plural form, Synergies.
Normally presented as a positive, it is anything but should you be on the receiving end of it. It’s all about (although not exclusively so) job cuts and re-evaluating the commercial outlook for joint businesses.
This was an issue my Avida International colleagues and I discussed with a number of the larger pension funds. We found some of the feedback particularly interesting. There was consensus on the view that in an industry dominated by the requirements of insurance companies, cost pressures are significant and increasing. So potential synergies will be relentlessly sought. In that context, some of the main observations from our discussions were:
Job losses are inevitable; the merged entity will not require two advisory units for example.
Considerable disquiet was expressed about the possibility that key individuals may decide to leave the enlarged group. Often the pension fund / consultant relationship is built on a long-term trusted link between people which is not easy to replicate.
However, it was also noted that pension funds often have a contract with their consultant that would see the automatic triggering of a re-tender in the event of a key person leaving the latter business.
There was also an interesting if perhaps the somewhat uncharitable assertion that pointed to research showing that mergers often result in the “successful” retention of less highly regarded staff.
So what might the kings of 1970’s disco, the Bee Gee’s have made of all this? Perhaps it could have persuaded them to go for a slightly different wording for one of their classic songs ('Tragedy'):
“Synergy - When the deal is wrong and your job is gone – It’s synergy!”
A pinch of salt -- thoughts on the Aon / WTW merger part 1
Advice sure isn't what it used to be -- thoughts on the Aon/ WTW merger part 2
The WTW/ Aon merger: You have more power than you think
The Aon/ WTW merger: A Keynesian perspective
The WTW/ Aon merger: To B or not to Plan B
The WTW/ Aon merger: A customer temperature update
The WTW / Aon merger: UK Pension Plans' Virgil van Dijk moment
The WTW / Aon merger: Talk About Governance
Read the full report on the Aon / WTW merger