Cloud Software Organization | Organizational Design
Two cloud software providers came together in a merger of equals. As they planned for the future, leaders wanted to make sure the new organization structure and management team leveraged the best aspects of both firms and positioned the new company to achieve aggressive revenue and workforce growth goals.
Our team brought decades of experience in human capital M&A. We leveraged this experience to help the new organization quickly design its new structure and define the right leadership assignments based on growth goals and go-to-market strategy. Now, the company and its leaders can devote their full attention to growing the business.
projected revenue growth by 2025
projected headcount growth by 2025
undesirable turnover in the merger, retaining key leadership talent
In early 2020, a private-equity-backed enterprise software company merged with another software company, creating a nearly $3 billion organization with approximately 12,000 employees. The new company and its investor have aggressive growth plans: They expect to more than double revenue by 2025. Achieving that goal hinges on continuously innovating their products and effectively partnering within the organization – in other words, activities that depend on a productive, well-organized and well-run workforce.
As the two companies planned their integration, they wanted to be sure they were establishing the right organizational structure and leadership to meet performance goals. Given the rapid integration schedule, they had to do it quickly. That’s when they called in West Monroe.
We specialize in designing organizational structures that enable the effective execution of business strategy. That allowed us to quickly mobilize a multidisciplinary team of software industry, merger integration, human capital management, and organizational change management experts – built specifically for this challenge.
We interviewed leaders from both companies to understand current business processes and structures along with future opportunities and barriers. We conducted a survey to identify key differences in the cultures and operating environments of the two organizations, as well as respective strengths that the combined company should preserve. Our survey also captured insight into employee views about the merger.
We then leveraged our workforce visualization tool by uploading workforce data – including job titles, tenure, compensation, benefit costs, and demographics. Using these visualizations we drove discussions with company leaders about how we could group together the work that needs to be done and create organization structure options.
Working with a core group of leaders from both companies, we facilitated agreement on guiding principles for the new organization and, ultimately, the structure for the top four levels of management. This included identifying appropriate roles for all leaders from both organizations—making sure executives had developmental and/or stretch opportunities within the model, rather than looking outside the organization for talent. Creating roles for all current leaders helped maintain institutional knowledge in the organization—critically important to this particular merger’s investment thesis. After creating the initial structural model, we helped slate current executives from both organizations into key roles.
Throughout the engagement our organizational change management experts were involved developing a short-term plan for socializing the new structure leadership team, as well as a long-term plan for rolling out the new organization structure to ensure all parties are informed in a timely manner. We leveraged our deep expertise in change management to bring along leaders, employees, and teams as decisions were made.
Our method? Structure follows strategy. We modeled that message with leaders throughout the engagement as all decisions made were based on realizing the strategy. Ultimately, we aligned the new organization with the go-to-market strategy for the combined entity and created new capabilities focused on driving the organization’s growth, including innovation and portfolio strategy.
Our approach helped the client quickly agree on a new organization structure and leadership roles with near-even distribution from both software companies. This model – and more importantly, the buy in for it that this process generated – is an essential pre-requisite for transforming into one organization and quickly focusing on aggressive growth goals, including: