Merger of Trust Companies Requires Blending Distinct Cultures, Overcoming Different Operating Systems and Retaining Key Clients and Employees
The Client
- Two large Indiana-based trust companies, located 250 miles apart and still operating independently after a bank merger of their parent holding companies
- Combined companies had 20 locations throughout Indiana, Illinois and Kentucky
What the Client Wanted
- Bring together two organizations with distinct and well-established cultures
- Achieve cost savings through consolidation of shared functions
- Improve customer service and increase revenues
Challenges
- Each organization had its own operating and accounting system that controlled everything from deposits to disbursements
- Retain key account administrators so that client relationships with key accounts worth millions of dollars would not be put at risk
- Retain key local clients even if their local servicing location was closed or their account administrator changed
- Identify and establish new leadership team from current leadership pool; leaders in each organization had conflicting objectives and priorities
- Identify which jobs and what locations were going to be consolidated
LÛCRUM’s Solution
- Consolidated backend operations
- Consolidated locations and determined which products each remaining location would provide
- Established one accounting system shared by both organizations
- Unified organizations by establishing one leadership team
- Established a centralized call center for smaller trust accounts
- Developed a common sales strategy that included standard fee structure
LÛCRUM’s Approach
- Led off-site strategic planning meetings with top leadership of each organization during which critical success factors were jointly determined
- Established ongoing communication channels that included quarterly reviews to continue the “change” momentum and to help overcome any resistance to change in both organizations
Efforts
- Planning process: six months
- Implementation of merger activities: two-year ongoing process
The Benefit
- 20%-plus reduction in staff, resulting in cost savings and greater efficiencies
- Overall annual cost savings in excess of $1M
- Profitability can now be measured more easily at each location because all units are using the same accounting system
- Did not lose any key account administrators or any key clients
“LÛCRUM’s strategy engagement was the catalyst to our combining the two companies and cultures. Karl Ulreich’s (LÛCRUM Management Consultant Leader) ongoing involvement and commitment were crucial to maintaining our momentum and achieving the planned results.”
-Retired CEO of the merged trust companies in this case study
