Association Merger Deal Makers and Deal Breakers
For an association and its members and other stakeholders, mergers can offer exciting growth opportunities, positive options to deal with industry consolidation and/or the ability to secure the organization’s future in the face of dwindling financial resources and membership base. However, mergers are complex endeavors, often riddled with challenges and obstacles. Following are two lists that can help associations better understand some of the key elements of successful mergers, as well as potential stumbling blocks to avoid.
Keys to Merger Success
Merger Deal Breakers
- Leadership – The need for a “catalyst leader” — an individual who recognizes and communicates the need for a merger — and the emergence of a nucleus of like-minded individuals committed to helping the merger become a reality.
- Appropriate timing –Time must be provided to allow for precursor partnering (i.e., a series of less formal, transitional partnering arrangements between associations), merger discussions, negotiations and implementation. This will enable the building of relationships, the establishment of processes that facilitate collaboration and the addressing of the legal, financial and operational details of merging.
- Social capital – The emergence of trust and familiarity, as well as the congruence of values, missions and goals — gained through face-to-face interactions between people in informal settings outside the boardroom.
- Communication – Open, honest dialogue and a willingness to share information during the merger discussion stage; effective handling of external leaks and the internal “rumor mill” during the negotiation stage; and provision of detailed instructions and sharing with key internal audiences news of progress made during the implementation phase.
- Culture –Retaining, honoring and integrating the distinctive and meaningful cultural elements of the former associations.
Mergers are often as delicate as they are complex. Therefore, it is important to be aware of the factors that can either help them succeed or doom them to failure.
- Opposing cultures or opposing stakeholders – Overlooking irreconcilable cultural elements, or the presence of respected stakeholders who are vocally opposed to a merger.
- Absence of congruent missions – If the missions of merging associations are incompatible, that is a difficult obstacle to overcome.
- Absence of support and culture – Merger discussions will not succeed if internal or external stakeholders strongly favor the ongoing independence of one or both of the associations.
- Lack of awareness of need for change – People may be unwilling to invest the necessary resources to work toward new partnerships if they are unaware of the benefits it will provide.
NOVEMBER/DECEMBER 2015 EDITION
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