A successful integration: In June 2011, David Hunt, Managing Director of Ryder Europe, the truck leasing company, led the £151m acquisition of Hill Hire, the truck and trailer rental company, to create a rental and leasing company with 10,000 vehicles and a 5,000-strong customer base. Ryder is synonymous with a conservative and low-risk approach. This could have led Ryder to focus on systems integration first rather than people, but this was not the case… David Hunt tells us why.
I understood that successful integration would take thought, planning and time, and consequently anticipated that the integration of Hill Hire with Ryder would take about a year. The acquisition would double the size of the business. I was clear that I didn’t want us to be one of those companies that changed the sign on the door and said the integration was completed. I wanted to make sure that we did things right, and really understood who Ryder was acquiring in Hill Hire; where there would be opportunities and risks, what we could become with a new asset class, greater geographical reach, and what we could do with the people capability we would acquire.
The easiest thing to focus on would have been the rational (systems gap analysis, rebranding, etc.), but I was aware that, if we put that ahead of the behavioural and cultural element, we were in danger of falling at on our face.
We had seen evidence of different ways of working in Hill Hire that had been very successful for them. For example, how they interfaced with their customers in a spot hire environment was different from Ryder’s approach in a leasing context, and how they were organised in their depots, was different from the way we were organised. There were things they could learn from us, and us from them. Consequently we wanted to prioritise the cultural integration, to make sure that this was not simply a “colonial’’ acquisition, but much more a collaborative merger of two companies to “as if” create a third, that would leverage the best of both. If this meant that there was a delay on the rational, then so be it. We knew Hill Hire staff might be nervous; we knew they would be looking for guidance, but we also focused as much on Ryder staff, as they would go through as much change as Hill Hire staff, given that the new Ryder would be a changed company.
We worked closely with Martyn Sakol and Gary Ashton of OE Cam through this period to review the cultures of both companies; 40% of staff from both companies at all levels met to discuss the culture – the way they did things, in “no-holds-barred” workshops. The leadership had to walk the walk too: they had to focus on the behavioural/cultural and each benefitted from a 360º review, a psychological and competency review, to ensure we maximized our individual and collective effectiveness.
This was, and is, a huge success. By focusing first on the cultural, it’s meant the rational has gone as well, if not better, and my key advice to ensure successful integration is to understand these cultural dimensions, and then use them to inform your decision making about what will work and what won’t.
Our review focused on commercial/sales culture, operational, people and corporate. We were surprised at how similar and different Hill Hire and Ryder were across these dimensions, but because we knew this early on, we avoided making mistakes that could have been costly, both financially, and in terms of morale and reputation, and we have been able to seize the opportunity to do things better.
…this was not simply a “colonial’’ acquisition, but much more a collaborative merger of two companies to “as if” create a third, that would leverage the best of both.
By focusing first on the cultural, it‘s meant that the rational has gone as well if not better, and my key advice to ensure successful integration is to understand these cultural dimensions, and then use them to inform your decision making about what will work and what won’t.”
We are now number one in the trailer rental market. Hill Hire’s Bradford head office closed at the end of last year and there has been some consolidation. We identified six sites that were within 10 miles from each other and we’ve consolidated those sites. The word is ‘consolidated’ not ‘closed’. The sites affected are: Glasgow, Leeds, Avonmouth, Birmingham, Hull and north Manchester.
It is worth noting that five out of those six are Ryder depots folding into Hill Hire depots. This was in part, because we had identified in our culture review the way in which the Hill Hire depots were organised, and led, could be advantageous. This would not be what people would have initially expected, and is evidence that we have taken the people and culture side seriously, to ensure we continuously improve our service to our customers. And, the entire Hill Hire account management team has stayed, as has Hill Hire’s senior management comprising of company sales director, operations director, and sales director for trailers.
The process also reinforced for us some of the strengths we thought Ryder had. Our key partners: Hewlett Packard, Mercedes-Benz, SDC, Daf, Montracon, and Bridgestone came to the party, saying they wanted to support Ryder in making something special. Ryder’s emphasis is on own account, while Hill Hire was much more third party focused. And that combination of Ryder’s focus on light to medium trucks and Hill Hire’s focus on heavy trucks and trailers is a dream come true and gives us a great bedrock from which to build the business. There are opportunities for Ryder to add value to customers [its own and Hill Hire’s] and there are cross-selling opportunities, but Ryder has always sold on value and service, and that is not going to change.
The transport and logistics industry has a history of integrations taking far too long or failing to gel. In my view you have to accept that it takes time to build trust; you can’t build it overnight. Everything you do aaffects that trust – so you have to do what you say you’re going to do and do it in the right way.
Perhaps what we have undertaken is a far wider review of our culture and underlying ways of working and utilised the acquisition as an opportunity to stimulate reflection / change at an individual, group, and inter group levels. This was never going to be without consequences but is delivering a much healthier working environment. Because we have a multi-site environment with integrated systems and processes it is very easy to forget that the interaction of our people will dictate our company’s efficiency and the customer service it delivers. All three levels work in combination, magnifying the positive impacts throughout organisation (or not as the case may be!).
I think part of our success has been bringing in experienced professionals like OE Cam early and not being overly prescriptive in the first instance as to what we wanted to get out of it. Rather to nurture the process and let it evolve as we learnt about the dynamics driving key areas and individuals within our company. OE Cam have been very successful in creating trust and the right environment for people to feel able to shed some of their fears and open up which can only be a good thing.
I have always said that 95% of people come to work to do a good job but we all know it’s not that simple. In this fast moving, ever-changing world it is how we understand, constructively engage and bring people together to deliver efficient customer service that is key. From my perspective, creating the environment to achieve this is becoming an increasingly important part of a senior executive’s role.
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