The rise of the merger

The economic downturn means we all have to get along, says Craig Dearden-Phillips

Craig Dearden-Phillips
Craig Dearden-Phillips

I believe 2009 will be the Year of the Merger. There is nothing like the threat of imminent vapourisation to get people over themselves and into a sensible conversation with the organisation down the road with a similar name, mission and area of concern.

And not before time. Our supporters have been paying for too many organisations for too long, all with their own chief executives, offices, IT systems and so on.

One of the biggest barriers to charity mergers is, I believe, ego. The people who found and run organisations tend to believe on some level that those organisations are about them. I know this because I am one such person myself. My ego is, in many ways, tied to the continued success of Speaking Up. Left unchecked (and mine is pruned constantly by my excellent board and senior team), egos are dangerous and can lead to little republics.

So if you're going to merge with the people down the road, what's the best way to do it? First, pick people you feel you can work with and a culture that blends well with your own. A feud will very quickly result in fratricide.

Second, pick an organisation that has something you want (a great infrastructure, a good balance sheet, a sexy brand or a great reputation) and which also views you as desirable in some way. Don't merge with a Titanic – or wait until you're so badly damaged that no one will throw you a line. Act early.

Third, get some of the big questions out of the way. Is this a merger or a takeover? Be honest. If you're more than three times the size of the other organisation, it is probably a takeover. Call it a spade.

Fourth, you need to sort out who gets what job. Ideally, a new organisation will take the best people from both sides, but fear about this process can get in the way of even the most logical mergers.

Fifth, involve as many people as you can in the decision. To staff, a merger can feel like the ultimate in being ‘done unto'. Don't let this happen to your team. Give people a say; a vote even.

If you do find the perfect merger partner, how should you behave? If you are the larger party of the two, it is vital to behave with grace, respect and generosity. For a merger to work, the smaller party must never feel bullied or dominated. Ensure your partner's identity finds its way. There may even be a case for keeping the smaller charity's brand.

The final thing I would suggest is that you find help. Mergers are difficult to get right. Due diligence is important, and some facilitation will be needed. Sadly, there's not a lot of good stuff written on the subject. But there are plenty of chief executives out there doing it now. So talk to them.

Whatever you think about mergers, they are going to become the norm in the coming year or two. We are entering bleak times, the depth of which few yet appreciate, so we must behave responsibly – and this means many more mergers to come.

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