GC Friday Interview: Diana Chan on Integrating Teams at EuroCCP

Unlike most CEOs, Diana Chan does not occupy an office of her own.

Instead, she sits amongst her staff. In the London branch of EuroCCP, all offices have been converted to meeting rooms with video conferencing facilities. In the Amsterdam headquarters Chan does not use an office either, in order to be more approachable. This is just one of the ways she is ensuring that the integration of teams at the two largest central counterparties in European equities happens without hiccup.

Given studies which suggest the primary reason many mergers fail to deliver the desired benefits is that people cannot work together, the result of Chan’s actions since the merger of EuroCCP and EMCF seems to buck management trends. The new company has retained all of its clients post integration and has achieved its financial objectives according to plan.

The less talked about soft skills saw Chan taking a number of actions to start building one team as soon as the terms of the deal were agreed among the shareholders in July last year. By the time the deal obtained all regulatory approvals in December, employees of the two companies had built good working relationships, which were only reinforced once the flurry of activities began to migrate clients to the Dutch legal vehicle.

In January, the combined company re-branded as EuroCCP N.V., headquartered in Amsterdam and with offices in London and Stockholm. The migration of platform and clearing clients began In February and was completed within seven weeks. The last platform migration took place shortly after the company achieved EMIR authorization in early April. This migration, says Chan, enables the company to take out one cost base while combining two revenue streams.

Because businesses are run by people, she says, after the merger one of the top priorities was to integrate the two teams. “Even though mergers are driven by financials, it’s not only about revenues and expenses. Integration of the teams is as important and this exercise already began in July last year.

“The people aspect is very important. Not only would the new company have three locations and staff from different cultures, the predecessor companies also used to be keen competitors. I need to ensure that everyone works well together and that the new company is better than the previous ones.” In seeing to this, once the shareholders reached agreement in July last year, Chan ensured that each of the 58 members of staff in both companies at the time knew each other even though decisions on the composition of the new team had yet to be made. To start with, both companies exchanged wall charts with photos, functions and contact details of every staff member.

“There has been a lot of effort put into team building. From last July until the end of client migration, the project teams responsible for integration had two meetings each week by video and numerous trips between Amsterdam and London. Video meetings make a big difference in encouraging collaboration. We use the internet for image and the land line for voice, which works very well and is economical.”

One month after the shareholders’ agreement was finalized, EuroCCP already went about working on rebranding and repositioning the company, finding a unifying theme and articulating the company message.

“Rebranding is not only for the outside world. It is also an extremely useful tool for internal communication, to make all staff feel that we are now one new company and one team with shared values and identity.” The work to adopt the new culture began in January with the launch of the new brand and a logo with the strap line Make a difference.

“Once the transaction was completed after regulatory clearance had been obtained, we announced the roles of the respective people in the new company and the new management team.” With the migration of the last client in April, the company turned its attention to strategy.

“Over a number of sessions the management team reached consensus on the mission, vision, and the focus of the company for its first year. Then we followed with defining the objectives and responsibilities of each function, and individuals’ goals. We are all in the same boat and we must all be rowing in the same direction.”

EuroCCP has a two-tier board structure, with a six-member supervisory board and three-member management board. The eight-member management team consists, in addition to members of the management board, of the main function heads.

The management team’s consensus on the corporate goals is essential to align everyone else in the organization in the same direction. “I meet with every member of the staff I have not worked with before, and I ask each person to describe, in three words, what they must do well in their function in order for the company to succeed,” says Chan. “It helps everyone to focus and be purposeful.”

Chan has distilled how EuroCCP must work into three words: be complete, accurate and timely, which the company calls its CAT program. “We could have called it ACT, which is more corporate, but this program is so important to client satisfaction that we want a name that is more attention grabbing. We encourage our staff to self-identify incidents where we are not complete, accurate or timely. We then work on the root causes and improve the process. We do not fault the person who identifies a defect. In everything we do – capture trades, net them, calculate and collect margin, settle obligations, send reports – clients need us to be complete, accurate and timely in order that they, in turn, can provide good services to their clients.”

Making the concept of service quality tangible through CAT and helping clients reduce operational complexity is one of the ways EuroCCP will continue to make a difference, says Chan. “We achieved interoperability to net away excess exposure and help clients save on collateral and settlement costs. We will continue to drive towards making equities clearing more robust and efficient.”

In May this year, EuroCCP won the trade feed from the London Stock Exchange. Implementing this new business will be a key effort for the company in the second half of 2014.

There are several other important focus areas. Building one strong team will continue for the eight-month old company under an environment of openness and trust. Keeping clients satisfied through the CAT program will ensure client retention and attract new ones.

“Having a collaborative and focused team, satisfied clients, and being EMIR compliant will bring more business, be it platforms that want to connect to EuroCCP or firms that select us as their CCP of choice.”