Q. We are thinking about merger - where do we start and what should our priorities be?
A. Mergers are a hot topic these days, especially when some funding sources are drying up and everyone is on the lookout for efficiency savings. If things progress, at some point you will need to take legal advice (are there any constraints in your articles of association, for example?). In the meantime, the areas to consider are the objectives and parameters of any merger, the process to get you to a decision, and stakeholder communication and engagement.
Tempting as it might be to jump straight in, your starting point should be the last of these three. Any rumour of change or merger can cause widespread discomfort and uncertainty.
In addition, your stakeholders, both internal and external, are a valuable source of information, ideas and challenge. Get a communications plan in place first so you do not find yourself having to fight fires at a later stage.
Then move on to starting healthy discussions with your trustees and senior management so you can be clear about why a merger is being considered. If, for example, the idea has come about as a result of financial difficulties, the outcome might be very different from the situation where you have identified duplication of services. Are you prepared to accept a complete takeover or are you expecting to absorb the other partner? Are there other models you might consider, such as working partnerships with a formal memorandum of understanding? What benefits do you hope to gain and what are you willing to give up? You might need to be prepared to manage some challenging behaviours and issues of vested interest at this point.
It can be difficult to be objective when people are loyal to their charity. There will be historical links, and some trustees might themselves be service users. They need support in remembering which hat they are wearing.
The next stage is to consider the process. Who will open up initial discussions with the proposed partners? Should it be at chair or chief executive level? If one of you has a connection or working relationship already, that is a good place to start.
You will need to invest resources in fact-finding and analysis, such as identifying functions that could be merged, mapping current tasks and calculating potential cost savings. Would merging services fit better with the needs of commissioners? Are there bigger-picture benefits in terms of future service provision?
Finally, consider whether a staged process might work - for example, sharing back-office functions before entering into a full merger.
Mergers can be challenging and time-consuming, but at least you have plenty of case studies in the marketplace from which to learn.
Send your questions to Valerie.Morton@haymarket.com
Valerie Morton is a trainer, fundraiser and consultant