Is it Time to Explore a Strategic Alliance or Merger? Over the last 12 years, Vista Global has supported nonprofits across the country to examine whether a strategic alliance or merger was a strategy for increased impact. When the pandemic began, most nonprofits looked at current reserves to evaluate whether they could weather a 3-6 month downturn in revenue. We are now passing the 6 month mark and all indicators are suggesting that we will be in this stage for at least another 6 months, if not longer. Can your organization continue to weather this economic situation on its own? In the 2016 study called the Chicago Nonprofit Merger Project, 25 nonprofit mergers were analyzed from 2004-2014 to identify how trends have shifted over the last 20 years. The study identified that strategic partnerships and mergers are seen as a competitive strategy to support organizations in increasing growth and services. The study saw organizations using strategic partnerships and mergers as a response to market and policy trends to improve their competitive advantage. In addition, many of the organizations in the Chicago study had previous merger experience. In 85% of the cases, the board chair or board members emerged as chief merger advocates. The Chicago study, maps out the key stages and key questions for evaluation for a strategic alliance and through this process, your organization can make a strategic decision as to how an alliance or merger can advance a shared goal, respond to community need, improve program outcomes, reach more clients and maximize financial resources. From July 2019 to March 2020, Vista Global guided Big Brothers Big Sisters of the Fox Valley Region and Best Friends of Neenah-Menasha, now known as Big Brothers Big Sisters of East Central Wisconsin (BBBS-ECW), as they explored each stage of a strategic alliance. When the pandemic took hold, BBBS-ECW was prepared, having already pivoted their organization efficiently and sustainably in several ways. Recently, BBBS-ECW CEO, Lindsay Fenlon shared with community partners how the recent merger prepared them to navigate COVID-19: Through the help of community partners, we invested roughly $250,000 into the merger negotiation and integration process. This financial support enabled us to “do it right,” creating a new organization with the ability to pivot efficiently and sustainably in the following ways: Operational Systems: We chose to integrate and transition all critical operational systems to cloud-based options, including financial management (Quickbooks Online and online banking), telecommunications (VoIP phone system with virtual meeting, texting, scanning, and information sharing and storage (Office 365, Sharepoint and Onedrive file systems), program database (Salesforce platform), donor database (eTapestry) and board communications (Microsoft Teams). As such, we were able to transition to 100% work remote within 24 hours. Technology: In anticipation of the need to work remotely, all staff laptops and technology devices were replaced with camera and microphone enabled laptops with Bluetooth capability. We were able to stay connected to our cloud-based operational systems with no need to wait for additional supplies or materials to facilitate “business as usual.” Leadership Capacity: The merger required an organization restructure and we elected to maintain all personnel, focusing on adding more management positions to expand the leadership team. While this initially carried a higher salary impact on our operational budget, we gained additional capacity of leadership-thinkers, poised to strategically tackle the diverse crisis that COVID-19 brought while simultaneously achieving the following two weeks after the Safer at Home order was announced: Pivoted 100% of programming to virtual mentoring; Transitioned all program processes to virtual, including new enrollments and make-match meetings. The first virtual match was made 10 days after the Safer at Home order went into effect; Postponed and restructured fundraising events for optimal revenue retention; Designed and implemented a multi-audience communication plan, successfully communicated small wins and big breakthroughs with PR, social media and direct communication to stakeholders Developed financial forecasts that allow for 100% retention of employees Board Cohesion: The negotiation process required that each board of director associated with the original agencies come together to listen, learn and dream big about the future. Ten days into January, the newly combined board of BBBS met to define a cohesive way of moving the mission forward. Clear board member responsibilities, committees and goals, and communication expectations were defined and refined throughout the first quarter of 2020. When COVID-19 hit, board members were among the first to reach out to BBBS leadership to offer support and empower myself to take drastic action as needed to ensure the organization’s sustainability. As such, I was able to mobilize swiftly to take advantage of federal legislature and operational modifications necessary to best protect the mission of the organization and the safety of the BBBS team. Culture of Adaptability and Resiliency: As part of the merger, our team faced the need to embrace change in order to move forward under the umbrella of one unified agency. Policies, procedures, practices, and organizational structure throughout the entire agency were modified as we got use to the adage that “the only thing consistent in life is change.” When the life-altering changes that came with COVID-19 were first coming to light, our team embraced it as just another situation to adapt to. In the weeks since, the staff and board of directors have acknowledged having full confidence in agency leadership and in each other, identifying that the cultural challenges inherent within any merger actually led us to coming together as a dynamic and diverse group of mission-committed individuals with the tools to keep kids connected during a crisis. In Fall 2020, Vista Global in collaboration with BBBS-ECW, will release a white paper that shares the learnings and key success factors contributing to BBBS-ECW’s merger and how that prepared the organization to navigate COVID-19. Other Vista Global blogs on nonprofit mergers: Five Lessons Learned from Nonprofit Partnerships & Mergers Nonprofits on the Move with Mergers Tips on Nonprofit Merger Success Through Organizational Cultural Integration If you are wondering if a strategic alliance or merger might be your organization’s strategy for success, let’s explore the options together.
What Sombrero Are You Wearing? Over the last 10 years, Vista Global has facilitated training for more than 100 organizations on the 10 responsibilities of nonprofit boards developed by BoardSource, the premier resource for nonprofit governance. One topic that we explore is the distinction between the fiduciary roles which are the legal responsibilities and the support roles, which are the same as any other volunteer. The fiduciary roles are guided by case law and guide board members to operate in the best interest of the organization, remain loyal to its mission and oppose operating in their own interest or in the interest of the CEO/Executive Director they supervise. The support roles include: acting as an ambassador, ensuring resources, offering expertise and contacts and good old, “roll up your sleeves” volunteering. To have a little fun with what many often perceive as a painfully boring topic, I approach the topic asking, “What Hat Are You Wearing? This can give board members a visual cue if they are starting to exert authority, or be directive in an area that is really outside their fiduciary governance role. A few months ago, I had the opportunity to deliver this training for the first time in Spanish to a U.S.-Mexican nonprofit. The organization is bi-national, legally incorporated in both the United States and Mexico so this training was to help board members understand what their roles and responsibilities were for the U.S. legal entity. The three hats “sombreros” that Board Members wear are: Governance Hat: This is the only hat that carries legal authority. It is worn only when in a properly called board or committee meeting with a quorum. Decisions on behalf of the organization are only made wearing this hat. The CEO is accountable to governing policies set by the board. Volunteer Hat: This hat has no legal authority. It goes on when leaving a board or committee meeting. It is worn when advising the CEO. It is worn when fundraising, when helping staff, either alone or in a group, and often under the supervision of the staff. Implementer Hat: This hat carries limited authority and is seldom worn. It is seldom worn because staff usually implement board policies. When it is worn, a board resolution gives a board member authority to implement a specific board action. When that action is completed, the hat is removed. One example where this hat might be worn, is if an organization is considering purchase of a new property and there is a board member that has real estate expertise. As long as the board member is given authority to operate on behalf of the organization without personal benefit, she could take on a role to negotiate the transaction. And when the transaction is completed, she removes this hat. Are you having difficulty figuring out what sombrero you should be wearing? Contact Mary today to explore how to move your organization and board to greatness! Other blogs on the topic are: Every Great Nonprofit Begins with a Great Board What Does Governance Got To Do With It?
Every great nonprofit begins with a great board This post originally published on June 8, 2016 has been updated. My experience with nonprofit board governance began in college when I was President of U.C. Berkeley’s Sports Club Council, comprised of 30 different clubs on campus. I had no experience with nonprofit governance. I didn’t realize that my role as Council president was broader than just running meetings. I didn’t have any understanding that the individual club members could and should play a role in strengthening the overall mission of the Council. Over the course of the past few decades, I have learned a lot about what contributes to a bad, good and great board and why that is important for nonprofit success. If only I knew then, what I know now. Continue reading “Every great nonprofit begins with a great board”
Five Lessons Learned from Nonprofit Partnerships & Mergers Over the last 20 years, there has been increasing research in the field of nonprofit mergers. How are they unique compared to the corporate sector? What are the elements that contribute to success? What are the trends being seen in the overall sector and sub-sectors? Over the last 20 years, there has been increasing research in the field of nonprofit mergers. How are they unique compared to the corporate sector? What are the elements that contribute to success? What are the trends being seen in the overall sector and sub-sectors? Continue reading “Five Lessons Learned from Nonprofit Partnerships & Mergers”
Three Steps to Becoming a B Corp “Best for the World” We are all familiar with the term “Best of”… Each year businesses ask us to vote for them in a specific category, “Best Taco, Best Yoga Studio, Best Chiropractor…” Then a list is published, and it is really more of a popularity contest than a true examination of how that business is the best. We are all familiar with the term “Best of”… Each year businesses ask us to vote for them in a specific category, “Best Taco, Best Yoga Studio, Best Chiropractor…” Then a list is published, and it is really more of a popularity contest than a true examination of how that business is the best. Continue reading “Three Steps to Becoming a B Corp “Best for the World””
Asking Questions For Which You Have No Answers “Conversational rituals allow us to build common language, definitions and meanings that in turn create community. They influence our behavior at the neurochemical level.” Judith Glaser To uncover “conversational blind spots” you have to become mindful of when you are making assumptions, interpreting incorrectly, and jumping to conclusions. This begins with asking the right kind of … Continue reading “Asking Questions For Which You Have No Answers” “Conversational rituals allow us to build common language, definitions and meanings that in turn create community. They influence our behavior at the neurochemical level.” Judith Glaser To uncover “conversational blind spots” you have to become mindful of when you are making assumptions, interpreting incorrectly, and jumping to conclusions. This begins with asking the right kind of open-ended questions. Questions that open our minds to explore new avenues of thought with each other. Questions for which we have no answers. In Conversational Intelligence, Judith Glaser explains there are three levels of conversation. Level 1 is a basic “Tell/Ask” interaction. It is directive with no open-ended exploration. Level 2 is more provocative and the interaction is labeled “Advocate/Inquire.” Referred to as “Share/Discover,” Level 3 is the most dynamic and exploratory interaction. The example below illustrates how questions from the 3 levels result in different experiences. Level 1: “Do you mind including this brochure in the donor information packet?” You ask a question that you don’t have an answer to but it is really a statement in disguise. This is “tell/ask” interaction to exchange information. There isn’t much trust. By asking the question this way, you are attempting to validate your own view of reality. Level 2: “I really love the brochure. It has all the compelling elements for donors. What do you think? Is there anything stopping you from getting on board with this?” This exchange is dominated by “advocate/inquire” dynamics. You are advocating for what you want (not just telling). You are inquiring about the other person’s beliefs in an effort to persuade them. Trust is conditional. Level 3: “Which of these pieces of collateral do you think will be the most compelling for this donor? Are there any concerns we should talk through before making a decision?” This conversation is marked by “share/discover” dynamics. By asking in this way, you are sharing that you’re open to being influenced and that you care about your colleague’s thoughts. This signals to the listener that they can offer ideas and you both influence the decision that achieves greater shared success. Learning to ask an open-ended question for which you have no answer strengthens your ability to have meaningful conversations that lead to transformational results. Stay tuned for more C-IQ tips! This is part of a blog series on Conversational Intelligence course by Judith E. Glaser. Check out related blogs such as “Listening to Connect” and “What We Can Learn from our Worst Conversations.” Photo credit: Rawpixel.com via Shutterstock.
