|
Tips and Answers
to Your Questions
Deciding to Restructure
How a Merger Unfolds
The figure below, Key Issue Areas by Stage of the Merger Process,
illustrates the various issues that arise in each phase of a merger.
Across the top of the chart (the column headings) are the six discrete
stages of the merger process. These are, in general, time sequenced;
that is, one follows the other, and any successful merger will probably
move through all six. In fact, in appraising the success of a merger,
it is useful to review whether and how well the organizations addressed
and passed through these stages. The leftmost column in the chart identifies
the areas that those leading the merger process will need to attend
to. The checks within the chart indicate which areas need to be most
closely considered at each stage.
Assessment and Readiness : This phase, addressed
in detail in The Nonprofitt Mergers Workbook Part I—Considering,
Negotiating, and Executing a Merger, is where each party first
assesses its own suitability for merger and its assets and liabilities
as a partner, and then examines itself in light of a potential partner
or partners. While many factors must be considered, even at this early
stage attention must be paid to the concerns of (at a minimum) the
board and management, and how the culture and program mix of the organization
would affect and be affected by the negotiation process. The need for
effective communication—primarily internal at this point—begins
here.
Negotiation : This phase, also treated in depth
in The Nonprofit Mergers Workbook Part I, is where the entities
come together to determine if, and under what circumstances, a merger
will occur. At this point some questions are likely to be raised in
each issue area. There will be a need to communicate with both internal
and external constituents about the process.
Immediate Pre-Merger : This is the often uncomfortable
period between the point at which the merger decision is ratified by
the boards, and the day on which the merger legally takes effect. It
can often last several months, and is unique in that the organizations’ futures
are joined but their present identities are still separate. It is crucial
to pay attention to the concerns and anxieties of the staff, management,
and board during this stage, as well as the impact of these concerns
on the overall culture. Many organizations get a head start on integration
at this point, and begin planning for, and to a small degree implementing,
the necessary changes. Announcements to the public about the merger
are typically made at this stage as well. A proactive stance can often
help alleviate the natural anxiety felt by many in this stage.
Legal Merger : This is a moment in time—the
date the merger becomes legally effective. It is significant as a legal
event, but it is not an actual span of time.
Immediate Post-Merger : Immediately after the merger
legally takes effect there are many changes, often great confusion,
and usually high emotion. New ways of doing things have yet to be established,
and true integration is just beginning. Many a merger begins to go
off track in this stage, and, once again, the .rst priority needs to
be attending to the “people” issues.
Integration : This is the process, often lasting
years, through which the entities truly become one. Full integration
involves the people, programs, and systems of the entire (merged) organization.
The process also involves considerable attention to communication,
both internal and external.
The goal of The Nonprofit Mergers Workbook Part II: Unifying
the Organization after a Merger is to prepare and support you
as you lead your organization through the unstable post-merger phase
and into and through the later stages of formal integration as quickly
and successfully as possible.
It is important not to consider these stages as completely discrete.
Be aware that it is not necessary to complete one stage before
you can begin work on the next. Successful leaders often look far ahead
when moving through the merger process. For example, during the immediate
pre-merger stage, some organizations are hard at work on staff and
systems integration, developing a cohesive board, and reviewing how
programs can work together. In other mergers, nearly all progress stops
when the negotiations are complete and does not resume until the immediate
post-merger stage begins. While both paths are common, successful merger-makers
tend to move seamlessly from negotiations to approval by the boards
to integration activities, without a hiatus between immediate pre-merger
and immediate post-merger.
|
