Nigeria’s financial services landscape is entering another cycle of big structural change. Recapitalisation pressures in banking, consolidation conversations in insurance, and competitive repositioning among pension fund administrators and capital market operators are all pushing in the same direction: more business combinations, more acquisitions, and more group structures built through deal-making.
On paper, the logic is obvious. Bigger institutions should create economies of scale, stronger distribution, shared capabilities, and cross-selling opportunities. However, many diversified groups struggle to turn those promises into measurable results. The reason is rarely the deal logic. More often, it is what happens after the deal closes.
“When a diversified group fails to build a shared internal labour market, it repeatedly chooses the expensive, slower route – not because the talent is absent, but because the system makes internal movement politically difficult and administratively messy.”
A major peer-reviewed review of post‑merger integration research by Melissa Graebner and colleagues underscores this point: Synergy outcomes are shaped heavily by integration choices – the hard, day-to-day work of aligning systems, capabilities, and people – not merely by strategic fit. The silent killer of synergy is the decision to run “one group” financially while still operating “many employers” on the people’s side.
This problem is easy to recognise. Each acquired company keeps its own culture. Pay scales remain different. Job titles mean different things in different subsidiaries. Career paths are not comparable. When vacancies arise, leaders hire externally or promote less-than-ideal internal candidates within the same business, even when talent exists elsewhere in the group. Cross-fertilisation becomes the exception. Silos become normal. Scientific research shows why this is dangerous.
Start with the talent-mobility question. In his widely cited study in Administrative Science Quarterly, Matthew Bidwell found that external hires, on average, come with clear penalties: they are often paid more, take longer to reach expected performance, and are more likely to exit than internal movers. When a diversified group fails to build a shared internal labour market, it repeatedly chooses the expensive, slower route – not because the talent is absent, but because the system makes internal movement politically difficult and administratively messy. Over time, this becomes a steady drain on synergy: higher staffing costs, slower capability building, and duplicated expertise across subsidiaries.
Then comes a quieter but more corrosive force: talent hoarding. An article in MIT Sloan Management Review by JR Keller and Kathryn Dlugos describes how managers often block strong performers from moving internally – reducing their visibility, discouraging applications, or subtly undermining them in talent discussions. The short-term logic is understandable: managers fear losing performance in their own units. The long-term outcome is destructive: the group cannot deploy its best people where strategy needs them most, and internal mobility becomes a high-friction event rather than a normal business practice. In diversified financial groups, talent hoarding is especially costly because synergy depends on shared capabilities spreading across the portfolio.
Culture amplifies all of this. When each subsidiary protects its own identity, employees experience the group as multiple “tribes”, and movement across boundaries feels risky. People ask: “Will I be treated as an outsider?” “Will my experience count?” “Is this move a promotion or a reset?” Even when leaders publicly announce “one group”, employees take cues from everyday realities — who gets opportunities, what behaviours are rewarded, and whether leaders truly act as one team.
Pay architecture is where the tension becomes visible and emotionally charged. Different pay scales and job grades across subsidiaries often create perceived inequities that weaken trust and make internal moves harder. A practical “aha” solution is wide band pay ranges: fewer levels, broader ranges, and a common pay philosophy that still allows flexibility. Done well, wide-banding lets a group place comparable roles into shared bands, while giving room for market premiums, performance differentiation, and business-specific realities. The message becomes “We are fair in structure, flexible in application.” That alone can remove a major psychological barrier to cross-subsidiary mobility.
These are not abstract ideas. I have seen the difference that disciplined people’s integration can make. In the earlier combination of IBTC, Regent, and Chartered Bank, many people-integration issues were not treated as top priorities early enough. The focus leaned heavily toward structure and operational integration, while culture alignment, harmonised people frameworks, and deliberate talent mobility lagged. Silos persisted longer, and the “one institution” feeling took time to become real, and it was not surprisingly short-lived. By contrast, during the Stanbic + IBTC Chartered integration (where I served as a member of the change management team responsible for post‑merger people integration), people integration was treated as a strategic workstream, not a side activity. Leadership invested more deliberately in aligning structures, clarifying career pathways, and building a shared identity. Cross-fertilisation of talent became a priority rather than a suggestion. The difference it made to cohesion, speed of alignment, and shared purpose was visible.
So, what should diversified financial services groups do now, especially as consolidation accelerates? Pay attention to talent mobility; build a shared job architecture; redesign incentives to break talent hoarding; use wide banding to drive pay harmonisation and destroy the culture of our “poor cousins from the village” mentality that is quite pervasive; and pay significant attention to culture and managing the people-side of change.
The core point is simple: While mergers create scale, only people integration creates synergy. If groups do not build one internal labour market, they will keep paying a hidden tax – the silent synergy killer – long after the deal celebrations end.
Omagbitse Barrow is the chief executive of Efiko Management Consulting and helps organisations to translate their strategy to results.
