Achieving Effectiveness During and Beyond Mergers

By Harold Tessendorf, Tessendorf Consulting – Certified Aligned Influence Consultant

During the COVID-19 pandemic, some of the recurring questions that have surfaced in for-profit and nonprofit circles include, “How many organizations will survive this pandemic?” “How many of them will shut their doors?” “How many of them will be forced to merge with others?” National organizations which have affiliated structures have responded to these questions by, in some cases, restructuring their operations to provide staff, documents, and checklists to assist local organizations as they merge. Local organizations, which operate independent of a national organization, are faced with having to navigate this on their own, placing even more strain on their board and executive leadership. Irrespective of whether organizations have a parent body to lean on or not, the decision whether or not to merge lies within the realm of the organization’s governance structure.    

These questions of what to do with struggling organizations beg further questions. Whose responsibility is it to make the decision to merge? Is it the role of the organization’s board or does it fall within the realm of the staff? And does this all change if the organization is the weaker or the stronger partner in the proposed merger? How will the new organization merge not only the assets of the old organizations, but also the interests of those organizations’ stakeholders? How will the new board merge the roles of each of the pre-merger boards? What happens to staff who fill duplicate positions at both organizations? How will they be accommodated within the new organization? How do organizations merge in a way that helps the new organization to be stronger, more resilient, and to have more community support than before? How does the history, program impact, and institutional memory of the organizations that merged inform the new organization?  While these questions emerge early, they will continue to surface throughout the merger process. 

With the goal of ensuring organizational effectiveness, Aligned influence® introduces boards of directors and the executive leadership team to their aligned, complimentary roles of Direct – Lead; Protect – Manage; and Enable – Accomplish. This alignment is central to organizational effectiveness and is even more important during periods of growth and re-organization, including mergers. Therefore, boards and staff must remain cognizant of this alignment throughout the three inter-related and progressive stages in the merger process, namely pre-merger, merger, and then post-merger. Each of these stages produce its own set of iterations on the questions listed above as the board and the executive staff work to stay aligned and thereby effective.   

Aligned Influence® can help boards and executives successfully navigate the strategic decision to merge.    Aligned Influence speaks to the importance of role discipline with its related variables of open communication and mutual respect for the role of the board and executive leadership team. Boards should be asking whether a merger will allow their organization, or its successor, to honor their “Direct” policy and they should be proactively engaging with and reviewing the input they receive from the organization’s stakeholders. These stakeholders include staff. Since the executive leader and their staff have a vested interest in any merger, the board should take their input on the programmatic implications of a merger into account when deliberating about a merger. Boards should be sensitive to the natural concerns that staff will have about mergers such as job losses or fears of being overburdened with additional responsibilities and service areas. However, the board should not abdicate its role of directing and enabling the organization and should never place all of the responsibility of mergers squarely on the shoulders of their executive leaders. At the same time, staff should not abdicate their responsibility to execute their manage and accomplish responsibilities during this time. Staff are not responsible for making the decision whether to merge or not. This decision rest with the boards of the respective organizations. Once that decision has been made, then staff, starting with the executive leaders, are responsible for planning for and accomplishing the merger of said organizations.

While the organizations’ boards and executive teams deliberate on these questions, they need to be mindful that their organizations are undergoing both change and transition simultaneously. On the surface, there is the change that the merger is bringing – changes in name, structure, roles, programs, service areas, and legal identity, to mention but a few. There are templates for these changes which boards and executive staff can adopt and modify to fit their circumstances. Accountants and attorneys play an important role here as they account for and combine assets and then safeguard these in new legal documents. Customized templates and resources provided by parent organizations also play a role at this juncture in the merger process. But below the surface, there are transitions which need to carefully navigated to ensure that the new, combined board and the executive staff are also aligned with their new internal and external stakeholders and that these embrace the new, merged organization that has emerged. Some of the questions that the merged board and executive staff now have to consider include ones about what adjustments the board needs to make to their Direct, Protect and Enable policies so that these can inform the strategic and tactical plans which the executive staff are responsible for as well as the operational policies that they use to manage the work of the new organization. 

Aligned Influence® is present at each of the three stages in the merger process. Deciding whether to merge or not; discussing how this impacts the “Direct” policy, ensuring that the organization continues to have protective boundaries, and engaging sensitively with internal teams and stakeholders throughout the process is the responsibility of the organization’s board of directors. The executive leader and their staff can best support the merger process by remaining disciplined in their roles by planning how the merger will impact their strategic plans, modify operational policies to ensure that they manage within the protective boundaries that the board has established, and ensure that the organization is well managed throughout the process

By drawing on their extensive experience of navigating mergers and organizational change, Aligned Influence’s team can help boards of directors and executive leaders to apply the Aligned Influence® model as they navigate decisions about mergers.    

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