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ADP Crosses the Transactional HR/Payroll (Branding) Chasm in Acquiring The Marcus Buckingham Company

January 18, 2017 | Steve Goldberg

Maximizing team performance and improving employee engagement are both winners in their own right as HCM themes to focus on. Solutions that focus on either are correlated with better business results. ADP and its clients can now play in this arena with the strategic acquisition of The Marcus Buckingham Company.

By many accounts, including mine, ADP's past acquisitions of companies like Workscape, Virtual Edge and The Right Thing, while accretive to revenue (not necessarily a game-changer on a base of over $10 billion) and enabling a more diversified solution and customer portfolio, didn’t fully detach the company from its long-time transactional HR / Payroll branding. Yes, Workscape did bring cool technology around total rewards and portals, but ADP also talked a lot about their new benefits admin outsourcing capability after that acquisition.

The bold move of adding The Marcus Buckingham Company could pay off nicely for ADP, and in “multiplier effect” ways that, by definition, are much more consequential than incremental revenue or adding some new strategic customers.

Just as SuccessFactors was a clear catalyst in SAP’s embracing of the cloud, TMBC could do the same for ADP; not in terms of the cloud as ADP operates there already. The story here is adding a disruptive HCM solution, one that weaves together technology and services elements to help customers solve issues many HR tech products will never tackle.

Among other things, TMBC’s flagship technology StandOut distils the complexity of a team leader’s job into two fundamental questions: “what are my team members’ priorities, and how can I help them?”. As this will entail a new way of approaching the job for many team leaders, the transition is helped along by targeted and expert coaching, TMBC’s other strength that ADP plans to tap into.

TMBC’s technology and complementary coaching bring self-awareness to the performance management and career development process

Self-awareness/self-discovery is often the missing link in feedback and performance management models and systems. You could say that one exception is when an employee is told their self-ratings are very different than how others see/rate them; however that is “being told” rather than learning it through a guided process. Coaching is also advocated by more and more companies, but most aren't consistently adept at it enterprise-wide.  ADP customers can now benefit from Marcus Buckingham’s proven approach, one centered around individuals fully leveraging their strengths (motivating and energizing) vs. addressing their performance gaps (often de-motivating). The model also clearly fits organizations wanting to pursue a “learning organization” strategy and corporate culture.

While a talent management solution offering the type of capabilities TMBC brings can be ahead of many smaller company's adoption or strategic interests for some time, this acquisition should allow ADP to finally break free of its transactional HR/ Payroll branding constraints.

The Bottom Line:

The Marcus Buckingham Company found its mother ship to reach the next stage in its journey to greater revenue and broader market influence/impact; and ADP likely jumped on an acquisition that will put it on the broader HCM brand trajectory it’s been longing for. The pairing should bring even more value to ADP and TMBC customers, and broaden ADP’s strategic HCM footprint in those customers, over 600,000 strong worldwide.

Posted in: Digital TransformationHR Strategy

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1 Comments

2 Comments

  1. Jamie Davies
    Posted Jan 18, 2017 02:16 AM | Permalink Reply

    I was one of the early trial users for StandOut and found it a very powerful tool for the weekly check-in and engagement process, until they withdrew the product for small user groups. If ADP can scale it successfully it can be a big win, perhaps widening the functionality to include similar pioneering products like Officevibe.

  2. steve goldberg
    Posted Jan 18, 2017 02:54 AM | Permalink Reply

    Thanks Jamie. Scaling these niche but otherwise high-impact tools is often a challenge for solution vendors, and this solution involves scaling coaching as well ... so totally agree. That said, one would think ADP has the resources to figure this one out.

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