Merging two business units with totally different approaches is tricky. That’s what’s happening in the Harvard Business Review case, Can One Business Unit Have Two Revenue Models? Isolde and Emanuel run two divisions that couldn’t be more different. Isolde’s team serves big, steady clients with a subscription model—think long-term contracts and predictable cash flow. Emanuel’s team is all about flexibility, selling to customers who prefer buying in one-off chunks.
There’s definitely a case to be made for merging the two units under a single revenue model. One consistent way of doing business could mean fewer headaches for the sales team, easier financial reporting, and a clear message to the market. Everyone’s on the same page, marching in the same direction.
But the flipside is this: you might actually end up losing customers. If you force Isolde’s long-term clients into a “pay as you go” model, they might start looking for a more predictable partner. And Emanuel’s clients probably won’t appreciate getting locked into a subscription. Keeping two revenue models might sound like chaos, but it lets the company stay flexible and meet different customers where they are.
Here’s how I’d approach merging these divisions:
- First, ensure Isolde and Emanuel agree on what they want—boosting revenue, cutting costs, or easing operations. Without a shared vision, the merger could veer off track.
- Have both leaders lay out their must-haves. Knowing what they can’t compromise on helps avoid pitfalls and guides decision-making.
- Bringing together people from both divisions provides diverse perspectives on where their approaches align and where they differ. It’s also easier to embrace change when you’re part of shaping it.
- Internal discussions are important, but customer feedback is essential. We need to know if clients would support or resist the changes. If they’re against it, then the merger might need rethinking.
- Instead of diving into a full merger, start small with a pilot. Test a hybrid model on a limited scale to see what works and what doesn’t, reducing the risk of a major setback.
Mergers can be tense. People feel like their turf is threatened, and emotions run high. That’s why it’s so important to create an environment where Isolde and Emanuel can voice concerns openly. Borrowing from the advice in How to Speak Up When It Matters, we should frame these discussions as problem-solving sessions, not blame games. Make it clear that any feedback is about finding the best path forward, not pointing fingers. An “if-then” plan would also be handy: if something starts going off the rails, then we know what steps to take to course-correct.
The goal here isn’t to pick one model over the other—it’s to find a happy medium that allows the company to grow while keeping customers satisfied. If we’re smart about this, we can come up with a strategy that balances efficiency with flexibility. It won’t be easy, but hey, if it was, we wouldn’t be having this conversation.
