Monday
December 17
2018

Alexie Seller

Pulling Back the Curtain on a Social Enterprise Merger: Practicalities and Surprises as Two Companies Become One

Editor’s note: This post is part of the NextBillion series, “Course Correction in Social Enterprise,” one of several topics we’re covering through special series this year. Click here for more details on our 2018 series.

 

“You’ll probably fail.”

For many companies considering a merger, this sentiment is common. However, when my company, Pollinate Energy, began executing our recent merger with a former competitor, Empower Generation, hearing these words didn’t dishearten me.

Sure, there were pieces that didn’t make immediate sense, like languages and countries, as we’re based in India and Empower Generation works in Nepal. But culturally, our teams felt similar. We both recruit and train a workforce of salespeople and a network of entrepreneurs to sell products to their peers in underserved communities. And the goal of empowerment, particularly for women, was at the top of everyone’s list.

Empower Generation founder Anya Cherneff took to these pages earlier this year to discuss the reasons behind our merger. I wanted to pull the curtain back on the process itself, exploring how we navigated the obstacles of combining our two companies – while continuing to serve customers in two very different, but equally challenging settings.

 

Identifying an approach – then executing it

As the process began, we took external feedback seriously and held structured conversations internally to share the approach that would create a strong future for both companies together. This feedback encouraged us to make quick decisions to avoid our employees losing confidence. We found the best way to tackle this was to execute the merger in three successive, 90-day phases with measurable action items. Phasing the merger took the pressure off me to solve all the problems at once. But more importantly, it eased the path for the team. They understood our objective, timeframes and goals within each phase.

We also structured a merger team, which included leaders and team members from our two organisations who worked to understand each side’s different processes, identifying opportunities for consolidation or improvement.

Surprisingly, when we announced the merger in early 2018, the most common question from stakeholders in both companies was: “What will happen to the brand?” We’d already decided not to prioritize questions about the brand (e.g. what would happen to logos, our brand story or visual identity) in favour of working through the integration of operations and systems. We explained that people would see the two companies’ logos side-by-side during the merger, and we needed to understand what our merged business looked like on the inside before starting our new story in 2019. Other businesses may handle this differently, but by engaging our stakeholders we convinced them of this strategy.

 

Lessons across systems and people

Pollinate’s technology solution manages everything from HR and recruitment to sales, product and inventory. Empower Generation was less tech-inclined, so it was an easy decision to migrate their operations into Pollinate’s system. We prioritized bringing Empower’s Nepal sales and financial data onto the India system and aligning that to internal key performance indicators. This meant we could understand any merger-related performance impacts in real-time from a remote location, which was necessary because our merger crossed four Indian states and two Nepal districts – plus Australia and the U.S., where we have registered charities that enable us to scale our operations faster. It also ensured that all teams could get to know the other business through metrics like top-performing products, sales price points and average sales per agent.

A major part of the integration was, of course, the people. In some cases, we did this well. In others, we failed and learned fast.

In India, our team operates on an English app, but in Nepal we had to translate key words to Nepali to make training and on-boarding easier. Also, in India, data connectivity and smartphone skills are reasonably high, and we prefer that our salespeople and entrepreneurs enter the data while in the field. We tried to use this approach in Nepal, but many entrepreneurs there don’t have primary access to a smartphone. In hindsight, we should have identified this issue earlier and proactively provided an alternative to smartphone-based data entry in Nepal.

 

Connecting people and generating opportunities

We wanted as many respective staff members to meet each other as possible, but with a remote workforce that wasn’t easy. While the India and Nepal teams continue to operate in their respective countries, knowledge sharing across countries is key to further the impact of both operations. To help advance this effort during the merger, we decided to leverage a key opportunity for the India team to get directly involved—a group of staff travelled with their Nepali counterparts across three Indian cities, and shadowed Nepal trainers so they could learn new training methods. This built strong relationships across borders, upskilled the Indian team in Nepal’s training approach, and helped both teams to realize the merger’s value through a tangible learning experience.

A real surprise was the outcome of connecting Pollinators, our door-to-door salespeople in India, and Empower Generation’s entrepreneurs from Nepal. Pollinate was piloting an inter-city mentor program and, on a whim during the merger, we decided to trial the program with these field staff from India and Nepal. This field team learning has transformed the way everyone works. Where we’d previously struggled to share information across locations, now it’s flowing faster than we can keep track! Anecdotally, this is attributed to our sales teams across countries having direct contact with each other – which, in comparison, makes sharing information across regions seem easier. Pollinators are continuously learning new tips from their counterparts in Empower, and there is healthy sales competition between the two countries.

For years, our India team has struggled to bring women into Pollinator roles, as the job has high barriers to entry – full-time hours, travel and evening community visits. During the merger, India adopted Nepal’s approach and started recruiting women from the slums to sell lower-cost product lines on their own time, from their homes. The Nepal training team provided the first round of training in this new approach and, out of 11 Indian trainees, seven are now actively selling – and one already wants to become a full-time Pollinator.

As these women develop business skills, they’re also proactively sharing ideas on the products they need. It’s hands down the most successful strategy we’ve employed in India to address the women empowerment, community engagement, product market knowledge and logistics challenges we faced in the past.

 

What we didn’t plan for

In quarter two (April to June of this year) we had our best sales ever, and the sales team across India had three record sales months in a row. Pre-merger, we effectively told the sales teams they were on their own for a quarter, while management focused on the merger. So we’d actually built in the assumption that sales might drop. But actually, sales over-performed. We believe that the new sense of freedom and ownership among our salespeople made them successful.

The biggest hurdle we’ve faced in the merger, though, was when a number of staff members chose to leave. I learned that organisational change creates opportunities for people to reassess their own plans. If we had a chance to do things over, I would prioritize individual conversations with management staff to identify potential exits, and create space for this to happen rather than being surprised during a time of intense change.

 

Growing in more ways than we imagined

Most people assume a merger is for direct commercial value, like access to a new customer segment, or revenue growth. For us, it was also access to new skills and an alternative way of working that we knew would push both of our organizations further and faster than we could go alone.

The integration has delivered countless lessons we’ll benefit from, like idea sharing at all levels and cross-border connections. And, while we’re gaining traction globally through our combined voice, it’s the new skill sets – like improved training approaches for women and fresh ideas across all business functions – that have been the most powerful results of our merger. We’re optimistic to see what the future holds for our company and the underserved communities with which we work.

 

Alexie Seller is the CEO and co-founder of Pollinate Energy.

 

Images courtesy of Pollinate Energy

 


 

 

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Energy
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business development, business models, clean energy, energy access, renewable energy, social enterprise, social entrepreneurship, solar energy