Incentives for Integration

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  • #95905
    Brant Miller
    Participant

    I was struck by the Daimler-Chrysler deal lesson (section 9), and the approach taken to offer bonus incentives and enhanced career opportunities for integration project leadership (those who also held business-as-usual) leadership roles. On one hand this seems highly appropriate, as they are often being asked to increase their output and the impact of their work on the company value will be significantly more than under normal operating circumstances. On the other hand, they are selecting key leadership who likely already have an incentive structure tied to short and long-term performance of the organization. Any equity (stock) would likely increase in value with a successful merger announcement and retain that value if the integration is successful. Therefore, the leadership are already incentivized. I have never been part of an integration where additional incentives are offered, but believe that increased engagement, productivity, and prioritization of the integration project would occur if there was an incentive system in place.
    Interested in any other models that may be out there to properly compensate and incentivize the interim integration leadership who are not pulled out of their business, and retain dual responsibilities. What works, what doesn’t, what should be considered?

    #95946
    Thinus
    Participant

    This is an interesting question as I agree that mostly those leaders are already incentivised through equity or other stock options. We found that using high potential up and coming leaders in conjunction with the executives and providing them with once off bonuses and a incentives such as career progression and mentorship a very successful tool. This has two benefits: it provides additional time and support to the executive to increase their output and ensured BAU is not left behind; secondly, it creates a succession plan for those executives and an opportunity for potential high performers to grow quickly.

    #95978
    Lisa Hall
    Participant

    To-date, incentives haven’t been used for any integrations I’ve been involved with. I’d like to look beyond leadership and see financial incentives being used for key participants from our various functional areas. They often have to manage the integration work on top of other responsibilities, and I believe an incentive program would be well received.

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