It was in September 2006 that global express logistics major TNT, one of the world's leading business to business express delivery companies, acquired the Indian semi-express carrier, Speedage.
This acquisition added 514 depots, 26 transit hubs, 730 vehicles and 1,195 employees (and about 1,300 sub-contracted staff) to TNT's existing resources. The current staff strength of TNT in India is 2,500 people.
Eight months later, Abhik Mitra, managing director of TNT India, feels that they have reached a comfortable position as far as transformation and integration issues are concerned. At the time of the takeover the TNT management was clear that it would not implement its own processes from the very next day.
Being in a service industry, explains Mitra, the company did not want to walk in and paint everything in its own colours; this may have alienated both employees and customers.
Says Mitra: "Our immediate concern is not to change Speedage to TNT but to allay the doubts of our people." After the acquisition, TNT has charted out a detailed plan on how to fully integrate the domestic player with the multinational.
The real work, adds Mitra, started once the deal was sealed. Speedage and all its 1,300 employees were put through to a phased transformation and integration process.
The first few months were all about communication and sharing. The TNT culture and values programme was shared with the Speedage employees, as were the short-term goals of the merger and the long-term ambitions from it.
The second and third months were dedicated to making the changes within the organisation and sharing the TNT value system with them. Then began the cultural training, continuing until the fifth month.
Certain worldwide practices of TNT-- such as the tele-answering policy where the phone has to be picked up within three rings, how to answer the phone, the importance of information sharing -- was shared with all the employees.
In the eight-month process, communication is what Mitra identifies as a major hurdle. "Understanding the expectations and needs of Speedage employees and coming up with communication that is relevant to them was our biggest challenge."
Allaying fears and doubts of the employees was a daily chore as the process of transformation was underway. Deriving synergy between the two companies was no mean task. TNT began by introducing Speedage to the processes of the multinational.
Speedage has a young culture that was not process or structure driven. "We had to change the structure and establish clear accountability and reporting time." It boiled down to how quickly TNT processes could be inculcated.
Performance, policies and process-driven standardisation was brought into the core functions of sales, customer care and operations. As a result, on-time arrival and departure of vehicles at the hubs has recorded more than 70 per cent improvement.
TNT has earmarked Rs 18 crore (Rs 180 million) for the transformation process and invested about 5 per cent of the total amount on IT, training, infrastructure and customer services. TNT also plans to invest another Rs 5 to 10 million on Speedage before the integration process is complete.
Extensive communication exercises like an open house with the MD and the CEO were carried out with Speedage employees. These still happen regularly. Employees were free to ask questions and clear doubts.
"Interestingly, one of the biggest fears that came up was "would I need to know English to carry on with TNT", Mitra points out. TNT was questioned at all points in the transformation process.
Though Mitra agrees that the long-term goal is to brand Speedage as TNT, the company has been judicious in identifying and retaining some of the best practices of Speedage, such as customer-retention and IT functionality, which was found to be very high.
He says he has seen attitudes change in Speedage: "While earlier the employees would fear downsizing or question their abilities to work in a MNC, the concerns have now changed to how soon they can become TNT." Mitra is betting on early next year.
