I’m sitting with representatives of both boards meeting for the first time formally. Leadership has already pushed the process forward. I’m asked, “So how do we go about getting started?” I respond, “I know you all want to start talking about programs, finances, and donor relations. But let’s devote some time to agreeing on how you will do business together.” I continue: “In fact, the most important variable in your achieving a successful merger is the degree to which you agree as a group on the details of the process and on the mechanics of your decision-making. Otherwise, you’ll never get to the decision itself.” The two organizations agree to give attention to rules and procedures before attention is given to the substance of the various discussions.

• First and foremost, be mission-driven.
• Assume good faith and trust.
• Adopt working assumptions.
• Agree to simple structures and practices.
• Avoid costly stakeholder processes.
• Understand and commit to the required resources to accomplish the task.
• Agree to needed internal administrative support.
• Define roles of the executive director and president and plan for new leadership.
• Define staff roles.
• Making the case: Launch the due diligence.

First and foremost, be mission-driven:

Whether as merged or separate organizations, mergers should be driven by organizational missions and the desired outcomes for clients.

Determine whether both organizations’ missions are congruent. Initiate an early discussion with both boards to address issues about values which are compatible, which are congruent, and which are the mostly highly held. An agreement that the two missions are compatible creates a strong incentive to achieve the merger.

Assume good faith and trust:

In a successful merger, both organizations come to the table as equals with strengths and weaknesses. One organization is not pursuing the other.

People bring an inherent tendency to characterize behaviors of others as “protectionist” or “driven by turf.” My experience has been, however, that what one person perceives as turf, another person interprets as important and good. Members should discuss the necessity of relying on each other’s different abilities, understanding, and unique wisdom.

Adopt working assumptions:

Keep these and other important agreements in front of people as much as possible:

• The merger process must rely on what participants already know and believe to be good.
• A successful merger process assumes board leadership and decision-making and avoids costly, extended group and stakeholder processes that are performed in the name of “participation”.
• The decision to merge is the only question on the table, and subsequent options (affiliation, etc.) will be addressed only after the vote on the merger.
• Both parties have the right to leave at any time.
• The process and terms of selecting a CEO for the new organization will be clearly communicated in a timely manner to the existing CEOs. Board chairs will develop the CEO selection process, which will take place after the vote (if there is a vote to merge).
• Board members agree to vote at the pre-defined end of the process.
• All current board members will be grandfathered on to the new board.
• A policy decision to merge or not merge will be made before the details of operational planning take place.
• The name of the organization will be considered only after the merger vote.
• External inquiries of any sort about the process-including those from the news media-will be referred to the CEOs.

Agree to simple structures and practices:

These will address committee structure, meeting schedules, and due diligence:

• Establish a merger committee. For example, each board might select six representatives. The committee will conduct the required analysis and discussion, and it will integrate report findings and recommendations. Merger subcommittees will conduct portions of the due diligence. The merger committee will need to receive the findings and recommendations of any sub-committees and integrate them into a coherent presentation and synthesis. Task forces will be arms of the merger committee.
• Bring both boards together for a kickoff meeting to discuss and sanction the merger process. The two board presidents might then send a memo to the subcommittee chairs to assist them in beginning the process of due diligence. Agree to hold occasional joint board meetings throughout the process as needed to consider progress and status.
• Agree on the completion date for due diligence.
• Agree on the points at which the two boards will be coming together, including the date for the final meeting to vote on the merger itself.

Avoid costly stakeholder processes:

Involve others only under those conditions in which it can be shown that mission-based outcomes will be enhanced by participation. Otherwise, involvement processes can become a nightmare. Organizations will quickly find themselves in an endless quest of involving others, asking their opinions, and responding to advice that “so and so should be involved.”

Assume that board members of both organizations collectively represent “the community” and will take responsibility for making informed judgments on behalf of that community.

Ask a key question: What is the minimum amount of community participation that meets leadership’s standards of integrity? If the leadership is politically astute, others will accept these early judgments, leading to far more targeted merger discussions.

Once the merger process is executed, certain unhappy constituents will contend that the principle of community involvement was violated. This will always happen. But with a record of clearly attending to the participation issue early on, the two organizations can better bear the eventual, marginal concerns that will always follow the vote to merge.

Understand and commit to the required resources to accomplish the task:

One important reason for the failure of mergers is a major miscalculation of time and resources needed to negotiate, learn, and build common understanding. Most organizations are already at maximum capacity in the use of volunteer and board resources to achieve ongoing internal work.

So be careful: Organizations tend to create processes for which they lack sufficient resources. Configure the inquiry to match the available resources. Draw up a rough budget, and secure a commitment from each organization that the merger negotiation should be a priority to allow adequate attention and commitment.

Agree to needed internal administrative support:

The success of a merger process stands to some degree on the quality of the administrative process behind it.

Each merging organization should have staff representatives on the merger committee who will be responsible for providing required information, taking notes, conducting needed analysis, and helping to prepare simple summaries of findings and recommendations.

Define roles of the executive director and president, and plan for new leadership:

These roles can make or break your merger process. It will probably be a smoother process if one of the executive director slots is empty. If both executive directors’ slots are filled, and if they both do not support the merger inquiry, the process will probably fail.

To be successful, there must be some sort of private understanding between the two executive directors and the two board presidents regarding succession or the hiring process for the new executive director should the merger occur. The two board presidents must have a role in this early, probably private interaction.

Another, more subtle factor in merger success is the strength of the two board presidents. These two people have a critical role in managing the tenor of proceedings. They must be committed to openness and good process, and have the time to communicate frequently with other participants.

Remember that the merger process itself consumes substantial costs in volunteer time. Rarely do organizations have the ability to conduct a complete and quality merger inquiry and then leap into a full executive director search process.

Define staff roles:

Be on record for properly addressing the staff role in the process. Examples of agreements include:

• Staff will participate in all committee deliberations and decision-making, serve as “point people” for each organization’s general staff, and provide technical assistance.
• The merger committee, working through the executive directors, will create uniform and open communications with staff during the process.
• Staff from each organization should serve on each subcommittee.
• Use weekly e-mail and other rapid means to communicate about committee work.

Making the case: Launch the due diligence:

Board members from both organizations should discuss the role of information and data at the beginning of work and negotiate limits to the amount of information to be gathered. Board members must share views of what is an “appropriate” due diligence. Following are some considerations to guide how work in a merger process is broken out:

• Mission, program, and organizational values: How are our values and mission congruent? What effect might a merger have on the people we serve? How might programs be reconfigured? merger committee
• Finance and budget: What financial resources do the two organizations bring to the table? Where are the opportunities and risks? subcommittee to the merger committee
• Funders and community support: How do we check in with our different constituents? How and when do we communicate with the full range of stakeholders? subcommittee to the merger committee
• Legal and governance: What technicalities need to be fulfilled during a merger process? Subcommittee to the merger committee

Each committee might be guided by an original list of due diligence questions.

During the early months of deliberations, inventory the resources available to address the questions listed above.

Assess and list the available resources such as staff time for analysis and available committee meeting time. Consider what types and quantity of data are needed-including telephone surveys and personal meetings-and who will be interpreting information and what methods of analysis they will use.

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