Culture First: Tips on Nonprofit Merger Success through Organizational Cultural Integration

Too often people think of nonprofit mergers as a frantic survival strategy for organizations in a state of financial crisis. However, robust nonprofit organizations are using a range of partnership, consolidation and strategic alliance models not to survive, but to thrive.

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In early 2015, AIDS Network and AIDS Resource Center of Wisconsin (ARCW) announced their merger, supported by a grant from the AIDS United Sector Transformation Initiative. The organizations were not in crisis. The merger goal was to combine two strong organizations and expand services to patients and clients.

“Wisconsin has always been a national leader in the fight against AIDS. Our merger will enhance this leadership position. By combining the best of our two organizations, we will enhance services, improve clinical outcomes, and generate new financial resources, all of which are critical as we continue on our quest for a world without AIDS.”

– ARCW President & Chief Executive Officer Michael Gifford.

Some Merger Integration Do’s and Don’ts

Vista Global Coaching & Consulting facilitated the negotiations and the organizational integration for AIDS Network and ARCW.  The continuity of consulting support over the course of both phases expedited the entire process. The timeframe from the initial conversation of the negotiation team to the celebration of the merger integration process was 18 months.  Although the process was efficient, it was not without intention and focus.

Don’t Ignore Culture in the Negotiation Phase

Honor important cultural elements of pre-merger organizations. Surface and address historical challenges in relationships between organizations to move forward in creating a new narrative. Sensitivity to power imbalances and strategies to mitigate those imbalances from the beginning of negotiations, sends the clear message to staff of both organizations that we are in this together to create a stronger organization that will better serve clients.

It is important to build relationships among the negotiation team members and develop a shared vision. Crafting ‘Strategic Intent Statements’ supports transparency and documents a process rooted in good faith which allows the group to point to that shared intent when there are bumps along the way.

Do Make Culture the First Priority in Integration

It is easy to launch into the systems and structural integration elements of combining two organizations but there is great risk in not putting emphasis on culture as the first priority.  Without this focus, it is easy for staff to stay locked in the pre-merger cultures and fall into “us v. them” perspectives.  Building an integrated culture is critical for long-term success.  Cultural integration requires intention, structure and tools to support the transformation.

To begin a cultural integration process, it can be helpful to use an assessment tool that provides an objective framework of the cultures of the combining organizations. In the AIDS Network-ARCW integration process, we used the Organizational Culture Assessment Inventory (OCAI). The tool allowed the merger integration team to look at the existing cultures and determine the preferred culture moving forward.  Identifying the vision of the preferred culture and the behaviors and beliefs that align with that preferred culture sets the course for “being the change we want to see” in the new organization.

Leadership Takeaways and the Return on Investment

Leaders need to understand when it is important to push for rapid changes and when it is more important to pause, listen, and allow members of the organization time to process. In the integration phase, building a “guiding coalition” of staff from all levels of both pre-merger organizations is a critical success factor.  The ARCW Merger Integration Team had 14 staff members.  These individuals became the change agents as the structural integration process began.  Eight work groups were established that included approximately 50% of all employees.  Even though ARCW is a statewide organization with 10 offices, every staff member was engaged in the integration process.

Strong nonprofits considering merger will be most successful if they go beyond just negotiations and invest financial resources, time, and staff in the integration process. Invest in a structure of internal leadership combined with external consultant support. Create early wins before and after the merger to maintain the momentum necessary to build a new organization.

Organizational culture can be abstract or intangible. A nonprofit’s culture is the sum of many parts. For a successful cultural integration, leaders need to acknowledge the value of each part.  The successful AIDS Network and ARCW merger integration is proof that cultural integration is possible when leaders invest in the process.

What is your experience in cultural integration?  We would love to learn more from you about this critical success factor. Contact Mary today!

New Bridgespan Blog: Three Key Roles Funders Can Play in a CEO Transition

Grantmakers can accelerate their impact in the social sector by supporting leadership transition. My colleagues at Olive Grove and I wrote an article recently featured on Bridgespan’s blog titled “Three Key Roles Funders Can Play in a CEO Transition.”

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There is a strong case to be made for funders to support their grantees during executive transitions. By helping them develop strong leadership pipelines through internal talent development, create realistic thoughtful succession plans, and evaluate the financial health of organizations to sustain a transition, funders can position the organizations they support to not only survive a transition, but thrive during and after it.

Read the blog and find out what grantmakers can do to help organizations undergoing leadership transition.

New Resources on Nonprofit Success Factors

As a contributing author, I’m excited to share new publications from Public Interest Management Group that address the question “What contributes to nonprofit success?” This action research project examines 32 success factors in five categories: Strategy, Culture, Operations, People and Business Model.

The Success Factor Analysis is a fresh data-driven approach to nonprofit management.  Read an overview of new publication Success Factors for Nonprofit Organizations: A New Approach to the Development of Thriving Mission-Driven Enterprises to learn more.

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Read the new blog by Public Interest Management Group founder, Scott Schaffer, for an introduction to the Organizational Success Index and more!

More Lessons for Nonprofit Storytellers

If there’s one key takeaway to share with you from Andy Goodman‘s recent workshop sponsored by the Donors Forum of Wisconsin, it’s that nonprofit leaders must not think of storytelling as optional.

Storytelling is not just another tool in the tool box to dust off when it’s time to write your organization’s annual report or new brochure.

Storytelling is an everyday requirement for your nonprofit’s communications to be successful.

Why is narrative so powerful? Humans are programmed to process information through stories. Stories are easy to remember and tell another person.  A good story is one that makes you feel something and becomes imprinted in your heart and mind.

Spouting facts and figures won’t tell your nonprofit’s story– or do anything to move your audience, as storytelling guru Annette Simmons also points out in her work.

Think of a story as a Christmas tree.  Facts and figures should be thought of as an ornament hung on the tree.  Facts are not the whole story. The story is represented by the entire tree, rooted in a compelling human experience that evokes emotion.

One outline Andy Goodman recommends is the classic Three Act structure:

Act 1:  The Protagonist

Introduce your protagonist and describe his or her goal.  This protagonist must be a person – not a faceless organization or entity! Describe the individual so your audience can make a human connection.

Act 2: The Challenge

What barriers and obstacles impede your protagonist? Paint a picture and describe a place.  Don’t rely on facts and figures to set context.

Act 3: The Resolution

How a protagonist deals with the challenges reveals their character and values.  This part of the story should detail a clear resolution and give closure to the audience.

Crafting the Right Story for the Right Audience

Your nonprofit should not be limited to just one story.  Your organization should have a library of stories to choose from depending on the audience.

What kind of stories should you tell?  Here are some types of stories to consider:

  • The “Nature of our Challenge” story
  • The “How We Started” story
  • The “Emblematic Success” story
  • The “Core Values” story
  • The “Striving to Improve” story (mostly used for internal staff to learn from mistakes)
  • The “Where We are Going” story

Is your nonprofit a good storyteller?  If you are interested in learning more about storytelling, sign up for the Goodman Center e-newsletter, Free Range Thinking.

Start crafting and collecting stories in all of the categories above.  Share these stories with every staff member, board member, and volunteer so they can be good storytellers for your organization, too!

Is Your Nonprofit Navigating Change Successfully? Here’s Your Guide to Leadership Transition and Succession Planning

Vista Global Coaching & Consulting has partnered with the Olive Grove Consulting team on an exciting national research project based on hundreds of nonprofit CEO and Board Chair surveys and interviews. Some of their answers may surprise you.

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What are the risks, challenges, and opportunities facing the sector today?

To start, 56% of board chairs in our study stated “the CEO doesn’t plan to leave for a long time.” but 41% of the CEOs we surveyed “plan to leave within the next two years.”

Check out our new eBook, Proactively Plan for the Inevitable: A Guide To Leadership Transition and Succession, to learn more.

This eBook is an effective staff and board resource for charting successful leadership transition and succession planning that is now available free.  Download the PDF.

Creating a robust leadership transition and succession plan might seem like a tremendously daunting task. But, with a little help it can be easier than you think. Contact us today to get started!

Lessons from the Land Trust Alliance Rally 2014: Storytelling and Engaged Listening

Recently I delivered a workshop entitled, “Using Coaching Skills to Build Staff Leadership” at the Land Trust Alliance Rally 2014 in Providence, RI.

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I arrived not knowing that the keynote speaker for the plenary was Andy Goodman.  I heard Andy Goodman speak in 2008 in a small room at the CompassPoint Nonprofit Day so I was thrilled to hear him again talk about Building your Story as a nonprofit.  This was a slightly different experience with 1,800 people, however still engaging and catalyzing.

Change the story, change the world

A few of Goodman’s key messages in framing your organization’s story:

  • Numbers numb
  • Jargon jars
  • Stories get stored

“Stories get inside our brains and act like software. Change the story, change the world.”

He offered an easy structure to use to create our organization’s stories.

  1. Who is it about? (there has to be a protagonist)
  2. What is it about?
  3. What is the barrier? The more barriers the better, it draws people in!
  4. What does the protagonist do?
  5. And in the end… the moral, the call to action?

Golden Rules of Storytelling

The plenary flowed beautifully into the morning workshop that I attended by Heather Yandow of 3rd Space Studio entitled, “Telling Your Land Trust’s Story”.  This workshop gave participants the opportunity to write and practice their organization’s story.

Heather added her “Golden Rules” of Storytelling.

  1. Be clear about your audience
  2. It is not about you..but it is about somebody. (The protagonist)
  3. Drop the jargon
  4. Tell the truth
  5. Bring a tear to the listener’s eye (BTW, Goodman showed three video clips and they all nailed this one!)
  6. Make the “so what” clear

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Tell Your Organization’s Story

It was a inspiring learning lab and I was hoping that some of the participants that attended Heather’s workshop would attend my workshop on Coaching Skills because the interactive exercise in the workshop asks for participants to “Tell your organization’s story.”  Good fortune would have it that there were quite a few people attending my workshop that did have their story drafted and ready to tell.

Learn to Listen

Participants in my coaching workshop practiced listening- the foundational skill of coaching.  I asked them to work on mirroring, paraphrasing and drawing out the speaker.  Although it felt awkward to many, as learning any new skill does, it really raised the awareness about how well we practice fully engaged listening.

So what does listening and coaching have to do with building leadership?

Leadership is about motivating, inspiring, aligning and leveraging people’s talents.  Your ability to understand what talents your team members can contribute is enhanced by engaged listening.  Your ability to align and leverage the talents of your team members is enhanced by coaching skills.

Are you wondering how coaching and listening can build leadership throughout your organization? Give me a call, let’s chat about it!