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The Negotiations Process

The Negotiation Processes for Various Forms of Strategic Restructuring

Strategic restructuring refers to a continuum of partnerships through which nonprofits strive to anticipate or respond to environmental threats and opportunities. La Piana Associates — both independently and through its foundation-sponsored Strategic Solutions project — has helped hundreds of nonprofits plan for and negotiate strategic restructuring processes over the past five years. Through that work, as well as extensive related research, we have identified what we consider to be a successful “model process” for negotiating a strategic restructuring effort.

In 2000, David La Piana’s The Nonprofit Mergers Workbook was published, detailing the steps in the process as they pertain to a merger. Since that time we have had many requests for more specific information on how the process varies for other types of strategic restructuring. While there are many similarities, there are indeed some important differences. To best understand these, we will first review the basic process as it pertains to all forms of strategic restructuring, then review the specific steps taken when merger is the desired end goal, and finally look at how the steps vary when a merger is not the end goal (in the case of Asset Transfer, Parent-Subsidiary Structure, Management Services Organization, Joint Venture, Joint Programming, and Administrative Consolidation).

Note: The recommendations below are written to apply to the consultant facilitating the assessment and negotiation process. If an external consultant is not being used, the organizations pursuing the strategic restructuring effort should adapt them accordingly.

The Overall Process: Three Basic Phases

• Assessment
• Negotiation
• Implementation