Easing the transitionAfter successfully negotiating and implementing a nonprofit merger, take some time to celebrate how much you've accomplished. Then gear up for the next stage of your new organization's journey — combining the people and processes of two organizations that are used to operating separately.
This task is inherently more complex than filing the legal paperwork for a merger. In fact, integrating your organizations — shifting the collective mindset from "us" and "them" to "we" — can take months or even years.
To ease the transition, consider the following suggestions for integrating your board, management teams, staff and systems.
During the process of planning your merger, your negotiation committee probably agreed on who will make up the board during the first year or two of the new organization. If these folks haven't had their first official meeting, now is the time.
The new board can start by discussing mechanics — who will run the board meetings, how agendas will be set, what materials will be distributed in advance of meetings, and who will serve on any subcommittees of the board.
Also encourage members of the new board to:
- Recognize the need for change. Your board is now governing a new organization, and it's probably larger and more complex than either of the founding nonprofits. Be open to resulting changes in board operations — more agenda items, longer meeting times and new issues to consider.
- Welcome new board members. Your board might now include people who weren't associated with either of the premerger organizations. Because these folks aren't wedded to your traditions, they're likely to bring fresh ideas to the table. Stay open to their perspectives, remembering that the board sets the tone for the new organization as a whole. Avoid statements such as, "That won't work" and "We've always done it this way." Also keep in mind that new members can bring extra energy to board meetings — a welcome relief for any board members who took part in premerger negotiations and need to back off for a bit.
- Find quick wins. Plan a board event or other initiative to launch the integration of your founding organizations. This could be a press conference, fundraising event, or a new program or service with high community visibility. Find a project for the new board to "own."
Merging management teams
Negotiations for nonprofit mergers typically raise management questions. For example:
- Who will become executive director or chief executive of the new organization?
- Will the new executive leader serve in a permanent position or on an interim basis while a complete management team is assembled?
- Will the newly merged organization need any new management positions? If so, how will those jobs be filled?
- Will any managers in the premerger organizations be assigned to new positions? Will any of them be redundant? In the case of dismissals, how will severance be handled?
- How often will the new management team meet, and who will set the agendas?
If any of these issues remain unresolved, address them now. Also ask the management team to set goals for the first operating month, quarter and year of the merged organization.
Finally, ask your new executive director or chief executive to meet individually with each member of the management team during the transition period. The purpose of these meetings is to discover any emerging problems, solve them promptly and tweak each manager's roles and responsibilities in the new organization.
Merging staff members
Mergers can generate confusion, fear and anger in front-line staff members. Many of these emotions cluster around one question: "What will happen to my job?"
The time to start answering this question is during staff meetings that are held regularly throughout the premerger negotiations. Delaying the discussion can lead to a void in communication that your stall will fill with speculation and rumors. Encourage your staff members to freely express their concerns, and offer the most candid answers possible.
Many nonprofit mergers result in bigger organizations with more job openings and opportunities for advancement. If this is true in your case, then emphasize the fact with staff members. Also create clear job descriptions for each position in your newly merged organization.
Will some staff members be laid off or see their benefits reduced in the newly merged organization? If so, schedule meetings between these people and their supervisors as soon as possible. Be sure to have fair and consistent personnel policies in place.
Systems include any tools and workflows that produce desired outcomes. Your organization has systems for doing everything — from buying paper clips to raising funds.
Your merger negotiations committee probably began the design of major new systems, such as investment in information technology. The design of other systems for daily operations is best left to your management team and staff members.
The challenge is to be systematic and thorough in merging systems. Focus on the following areas:
- Planning. When will donor campaigns, annual dinners and other major events take place? Who will schedule and organize them?
- Finances. Who will oversee accounting, budgeting and fundraising? How often will we produce budgets, and in what format will they be presented? Do we have adequate insurance coverage to manage the risks of our newly merged organization?
- Human resources. Do we need to hire additional people? If so, for what positions? Who will do the hiring? Do we have policies and procedures in place for employee training, performance reviews, compensation, and recognition or incentive programs?
- Information systems. What software and hardware will we use to manage donor information, track volunteers and evaluate outcomes? Does our website need to be redesigned? What analytics data will we use to evaluate online engagement by our stakeholders? Is our data secure, and can we restore it in the event of a technology breakdown?
- Property and inventory. How many buildings or offices do we now own, rent or lease? What about equipment and supplies? Where will these materials be stored, and how will they be shipped from our vendors to our offices? Which of our buildings and what equipment will need scheduled maintenance, and who will handle those tasks?
No checklist can cover every aspect of postmerger integration, of course, but answering these initial questions will take you a long way.
CompassPoint: The M word: A board member's guide to mergers by Alfredo Vergara-Lobo, Jan Masaoka and Sabrina L. Smith (2005)
The nonprofit mergers workbook part I: The leader's guide to considering, negotiating, and executing a merger by David La Piana and Robert Harrington (2008)
The nonprofit mergers workbook part II: Unifying the organization after a merger by La Piana Associates (2004)