How these Entrepreneurs Managed a Team Amidst the Hustle of a Big, Bang Merger
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Some mergers can be path-breaking for the startup space in India. These include the Flipkart-Myntra, Quikr -CommonFloor, Ola-Taxi4Sure and a couple of others. The aftermaths of a merger can be disruptive to an industry, leading to identical deals, layoffs, price war and marketing wars.
However, what gets unnoticed in this hustle are the under-currents that the management teams of both the entities go through during this collaboration.
Jitendra Gupta, Founder Citrus Pay and MD of PayU India, spoke to Entrepreneur about what entrepreneurs and employees go through during these events. PayU acquired Citrus Pay in a $130 million deal in September last year, and the combined entity would help add more than 30 million to PayU's user base.
Back then, Gupta and the other Citrus co-founders took over the management of the combined entity. Recalling the event, Gupta spoke about what he underwent as a leader during that period.
"The first thing that we had to convince the existing PayU employees was that we were not coming in with any vindictive or destructive agenda, we are sort of coming in to work together with them. Similarly, we had to comfort the Citrus employees that we are out there to change their roles and their careers would not get affected," he said.
People always worry about what happens to them personally rather than worrying about the fate of the organization, he said.
Communication was the key
The initial couple of months, Gupta and his team spend in comforting and communicating to their employees. The management had to take few hard calls in terms of business processes for the combined entity.
"Whenever you drive any change it definitely faces some resistance. There were of course some mid-management level executives who quit, who weren't okay with some of our decisions but at large all the employees at both sides understood our perspective," Gupta revealed.
How to keep the management together
According to Gupta, following are some of the key drills that should be practiced by the higher management post a merger of this sort -
- Communicate a lot - Keep your team together by talking/emailing them regularly
- Meet your team as often as possible with your existing employees and encourage them to ask difficult questions. "We did not duck any difficult question posed by our employees because that sort of gives a negative vibe
- Explain your decisions - especially with regards to a shutdown of any business plan. This practice sort of helped us create a confidence in the team.
On a personal level, Gupta said that before the deal was announced, he along with the top management prepared a month in advance for media queries and questions from customers in order to have a uniform communication throughout the board.
"The second thing that we had to take care of was the fact that even though the Citrus story was great, we could not have undermined the potential of the PayU story. PayU was our largest competitor. It was a very sensitive situation and we were very cautious while answering questions so that we could keep a balance on both sides of the story," he added.
Gupta has more than 12 years of work experience in banking and financial services industry and considered an expert in payments industry. Prior to Citrus, he was working with ICICI bank for 7 years, wherein he was part of founding team of Retail cross sell and Investment banking division in the bank.
During his last stint with the bank, he led the whole initiative of stitching a joint venture between ICICI bank and First Data in Indian market. This was a unique JV ever done between a bank and an independent payments company.
Gupta has observed that today the market looks at the combined entity as a more credible unit. Today, the fintech space is undergoing a roller coaster of changes and there is pressure in terms of pricing which throws new challenges to companies. However, he continues to believe that new challenges gives the company the ability to do something new in their field.