Inertia is the biggest risk to any successful merger. The tendency of organisations to proceed in a straight line until gradually grinding to a halt can easily be avoided simply by adopting a proactive merger strategy. Before you start, be very clear about what you want to achieve, and then thoroughly explore your options. Do not settle for the first partner who comes your way, and stay open minded about other forms of collaboration. Your service users may gain as many benefits from entering a Joint Venture, Alliance or Consortia, as from a merger.
Ask yourself the following basic questions.
- Where are we going?
- What are our objectives?
- Can a partnership get us there quicker?
- Are we being proactive to find the right partner?
- Is this in the best long-term interests of our Service Users?
- Do we share the same values?
If the answers are yes, move on to planning and Due Diligence. This is often easier in the charity sector because there is typically no money changing hands.
After an initial assessment to make sure there are no ‘show-stoppers’ (such as pension crystallisations), and the governance documents of both organisations permit merger, you can progress to Due Diligence proper. You can sum this up with two questions: “What is going to make this deal work?” And “How do we test that?” The answer to the former will take some thought, while the latter is frequently a matter of experimentation. Before getting married, a couple can do a lot worse than take a two-week holiday together. If they survive a fortnight in the Algarve, they can survive pretty much anything life throws at them. So before taking the plunge with a merger, try the relationship out. Run a small joint venture to see how both sides react, how they interface, how problems are solved and how compatible you really are.
Assuming you pass the Algarve test, hone your vision of the merged organisation by creating a clear and compelling narrative. This will serve you well as you are likely to repeat it at many meetings during the process. Use specialist advisers to help you refine the business case and advise on Governance, Branding, Management, Staffing, Planning and Budgeting. Let them answer the difficult questions – this is what they do best – and leave yourself clear to focus on influencing and negotiation.