Over the last decade, and particularly the last 5 years, I have worked on or been directly involved in, many charity mergers. Almost all have proven to be good news for the organisations involved and their beneficiaries, but none could be said to have been an unqualified success. By far the most common reason for mergers running into difficulties is that not enough attention is given early enough to integration following the transfer of assets and people to the merged entity.
While occasionally mergers run into technical problems before transfer day (such as funders or landlords not agreeing to novate agreements/leases), this integration phase almost always throws up the biggest challenges, even in the simplest of situations.
Sometimes this happens because systems are not integrated and therefore the merged organisation carries for too long with two (or more) HR or finance systems (for example).
Challenges can also arise from integrating governance, in particular policy frameworks (in some cases this can get genuinely dangerous, such as when multiple approaches to safeguarding or health and safety persist).
Occasionally, it can even be because assets (or more likely liabilities such as pensions) that have transferred create instability in the finances of the merged organisation causing, for example, funders to ask more questions than they might otherwise have done.
By far the most common reason is that the people issues have not been addressed properly. I have seen situations where there has been little or no consultation communication with staff or volunteers in the merging and newly merged organisations resulting in people feeling they don't know what is going on or that they are being treated unfairly. Even when there has been a great deal of involvement before transfer day, too many senior teams assume that after an initial couple of weeks the merger is "done" and they give it no more attention.
These approaches fail to understand what is, for me, the main reason that the charity sector makes such a difference in society; because the people who work in charities (paid or otherwise) usually feel a strong sense of loyalty and ownership of "their" charity. Almost all mergers challenge and disrupt that loyalty and it needs to be rebuilt and nurtured for months or years after the formal merger has taken place.
Equally, different organisations, however similar they appear on the surface, operate in subtly (and sometimes dramatically), different ways; they have different cultures. These cultural differences are, according to Cass Business School, a cause of tension and disruption in over half of all charity mergers (and in my experience that will be a gross underestimate). So this needs to be identified early on as an area to work on both before and after the merger takes place so that as many people as possible can get on board with the new culture the Trustees and senior staff want to create and thus grow their loyalty to the new organisation.
I don't want to down play the significance of cultural changes as an area of tension and challenge in mergers (it is a big issue) but I think it can sometimes be a smokescreen for clashes of personalities, often at senior levels. There are always egos involved in any merger, either at Board level or amongst senior management, and often both. Let's face it, the merged organisation will rarely have two CEOs or double the size of its board overnight. These big issues need to be sorted out long before the merger takes place and communicated to stakeholders, staff and volunteers alike; a share vision backed up by agreement on structure and individuals' futures (and not just senior people) must be a priority for the planning stage of any merger. This is critical because to achieve the culture change required by any merger, unified and high quality leadership and governance is essential (and sometimes lacking because these issues have not been tackled early).
So my key messages are: plan early, plan often and keep at it for a long time after the formal merger has completed. Ensure there is a shared vision for the merged organisation, agreement on the big and small issues and a detailed plan for culture change and integration of teams, systems and governance. And make sure that the resources to make integration a successful reality are in place well before the merger completes and retained for as long as it takes to make the merger a long term success.
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