Employees hold the secret of success for Alliance Boots

The 76,000 employees at newly merged Alliance Boots may be concerned about their jobs, but they actually hold the fortune of the company in their hands.

The Work Foundation experience with mergers shows that success depends on clear long-term vision and alignment of cultures. Managed well Alliance Boots can capitalise on their best asset - their staff ñ and carve out a distinct and profitable niche in the market that supermarkets just canít offer.

Pharmacy is one of the few areas on the High Street where customers continue to feel high involvement with their purchasing decisions, because of their impact on personal well being, while also feeling anxious and lacking in knowledge. This merger offers the potential for the still-trusted Boots brand to come to their rescue. It might offer such a quality of service, whether through Boots outlets, or by sustaining independent pharmacies through first class distribution support, that customers will prefer that ëexpertí option to the commodity convenience of a supermarket. And if the brand proposition and its delivery are successfully aligned in this way in the UK, then there is every hope that the rest of Europe will remain loyal to it as well.

This model is close to the governmentís aspiration for Community Pharmacies, so it is to be hoped that the competition authorities will recognise necessary sector consolidation that benefits the customer and not destabilise the merger through regulatory delays.

The Work Foundationís research ìCracking the Performance Code ñ How Firms Succeedî suggests that customer service enhancement and employee engagement will be the critical success factors for a more productive post-merger organisation. After all, it is the front line pharmacy staff that must provide knowledge, competence and reassurance to high street customers. And it is the wholesale distribution staff that must empower the pharmacists through the effectiveness of their supply service.

Richard Sharpe ñ Associate Director in The Work Foundationís Consultancy practice says about his experience of mergers -

A significant number of mergers fail to realise their anticipated gains. It is people and cultural issues that are frequently responsible for these ’failures’. Whilst significant time and money is rightly spent on the legal and financial implications of integration, the critical people related aspects appear to get scant attention. The ’merger syndrome’ can create huge uncertainty and stress for employees of those organisations involved. To achieve full value from a merger the people issues have to be taken seriously.