Mmi Group 4f1e1a

MMI’S MERGER: AUTHENTIC TRANSFORMATIONAL LEADERSHIP

INTRODUCTION • Momentum • Metropolitan

BACKGROUND OF THE MERGER • This merger was formed in 2010 by two South African’s insurer

• Provides the service in 12 nations • Its products include asset management, employee benefits, life insurance, and managed healthcare istration

MERGER RATIONALE

COMPARISON OF MOMENTUM AND METROPOLITAN

UNBUNDLE OF SHARES

FIRSTRAND

METROPOLIT AN

FIRSTRAND

REDISTRIBUTION OF SHARES Chart Title

METROPOLITAN; 41% FIRSTRAND; 60%

FIRSTRAND METROPOLITAN

MARKET COMPARSION PER AND POST MERGER

SEPARATION OF ENTITIES

MERGER RESERVATION • No effect on shareholder Price • Who was taking over whom? • Different culture • Required efficiencies

MERGER PROCESS • Wilhelm van Zyl – Vision for Metropolitan

• Partnership, combinations, and non-standard affiliations

• Van Zyl and Kruger approached each other • Merger talks were started • Business Model & Restructuring of Portfolios

APPOINTING THE MMI GROUP CEO

• At executive level there was vagueness due to change process

• Trust, Integrity, Purity of Intent – Consequences of Different scenarios

• There could only be one CEO • During initial phase, van Zyl and Kruger tly managed the change process

• Eventually, Kruger became the CEO

TRANSFORMATIONAL LEADERSHIP •  implemented a structured communication process

• They made brief which provide answer to potential question

• Transparency of the brief

IMPACT OF VARIOUS INFLUENCERS DURING SPECIFIC STAGES OF THE MERGER PROCESS

• Leadership communication and the

management of organizational change

• Leadership communication and the

management of organizational conflict

• Leadership communication and the management of corporate culture

ORGANIZATIONAL CHANGE • a good organisational relationship including each member

• attaining such an environment is the establishment of trust and honesty

• while each organisational member should promote loyalty and reliability.

ORGANIZATIONAL CONFLICT Organizational may perceive an M&A activity as a conflict, it is imperative for the success of the organization

CORPORATE CULTURE • moment of truth for management • it will be visible among of the

organisation in the sense that they will strive to meet organisational objectives and display positive behavior if they succeed.

MMI HOLDING •  a laser focus on messages and a solid

commitment from leadership to communicate with employees from both premerger companies can help to assuage fears, prevent negative chats around the water cooler, and ensure employee loyalty during the sometimes turbulent M&A process.

CHIEF INTEGRATION OFFICER’S LEADERSHIP ROLE

• Danie Botes was appointed as the MMI chief integration officer

• A true merger was a different task as compare to take overs • Decision making power was a critical issue • A recruitment drive was launched to appoint staff to their new positions

CHIEF INTEGRATION OFFICER’S LEADERSHIP ROLE

• The main differences in culture existed in area of management style

• Values which formulated during the survey were ability, innovation, integrity, teamwork, excellence and diversity

• It was decided that staff will not reduce for two years

MERGER COMMUNICATION • Bi-Weekly Briefing Sessions • To kill the “grapevine” • Regular and timely communication built confidence

• Exco delivered its promise of providing answers

• Messages of both CEOs cross-checked and expedited

• “Soft” issues were often the “hardest” • Change process was managed well • Still not all stakeholders were on-boards • Many positions had to be rationalized

CHALLENGES AHEAD • Both cultures were jelling in • And most of the expectations turned out to be true • But there were still great challenges to cope with • Multi-racial workforce • Ailing Economy • Increasing Unemployment • Decreasing Disposable income

• Kruger was faced with a task to break-out to the employees about structural re-organization

KOTTER’S CHANGE MODEL & MMI • Create Urgency

• Merger would add value by increasing market share

• Form a Powerful Coalition

• Partnership and trust between Kruger & Van Zyl

• Create a Vision for Change • Communicate the Vision

• Remove Obstacles

• Effective communication, steering committee, CIO

• Create Short-Term Wins

• Stakeholders on-boarding, seamless integration

• Build on the Change

• Analysis after each success, continuation of momentum

• Anchor the Changes in Corporate Culture • Structural re-organization

THAT’S ALL FOLKS!