Case Studies
Mergers

CoreNet Global

In mid-2002, after several years of negotiations, the International Association of Corporate Real Estate Executives and the International Development Research Council became CoreNet Global. A year post-merger, Peggy Binzel, President and CEO of the new entity, shared CoreNet Global's story with us. She highlighted the challenges, success factors, and outcomes, and gave sound advice for other association executives.

Challenges. All parties were in favor of the merger, but the greatest challenge was finding the time to meet to conduct the negotiations. This was due, in part, to the different locations of the organizations—one was in suburban Atlanta , the other in West Palm Beach , Florida . Additionally, common to all nonprofit mergers, the main leadership in the negotiations process was the volunteer board members. Because these individuals had demanding “day jobs,” it was difficult to find the necessary time to meet and work through the details. In addition, both boards and staffs still had to continue to operate their organizations during the negotiations process. Binzel provided a great analogy: “ It's like building a road while you are driving on it .” The integration process proved even more demanding: “ People say not to get married, get a new job, and move in the same year. Well, that's what we did .”

Outcomes. Despite these challenges, the merger has been highly successful. Before merging, the two organizations each had about 4,000 members; 20% of these, though, were members of both organizations. The new entity has 7,500 members. In sum, despite a soft economy in which many associations are facing membership losses, CoreNet has had strong membership growth, including a 15% growth in its international membership.

Underlying these statistics are the enhancements that the new entity can now offer members. These come, in part, due to reductions administrative expenses; for example, the two separate organizations had 66 staff; the new entity has 41. These cost-savings allowed resources to be redirected to member benefits. Among the expanded benefits are improved education services, a new research program, a new website with e-commerce capabilities, and a plan in the works for a new IT system with greatly improved functionality. The new website and IT capabilities, and expanded international reach, allow the worldwide exchange of best practices and strengthen networks among members. According to Binzel, this could not have been achieved without the merger: “ Two separate organizations could not have afforded the new website we now have or the new IT system we have planned. ”

Success factors and advice for others. Binzel attributes this success to “ strong leadership that was dedicated to making it happen, and a strong, and well-designed and executed, plan for member communications. People want to know what's going on. Be straight with them. Communicate. Communicate effectively. Keep building relationships. ” She emphasized, “ We always focused on how this would make us a stronger organization for our members. ”

She had great advice for others considering merger: “ However hard you think it's going to be, it will be three times harder. There are 1,000's of details. Deal with them, but always keep the bigger picture in mind. Be strategic. The rewards are worth it. At the end of it, there is a new organization—an organization that is stronger and better able to serve members .”