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!

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!

Developing a Sustainable Approach to Leadership

When I took my first job as an executive director at age 25, I didn’t really think about embarking on a career as a nonprofit leader. However, more than 20 years later, I have led five different organizations with annual budgets ranging from $150,000 to $13 million. As an executive director, I had the opportunity to participate in a leadership development program that confirmed some practices that allowed me to strengthen my leadership skills and create a path for sustaining my leadership.

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Today, serving the nonprofit sector as a consultant, I have the opportunity to be a facilitator of leadership development programs. I draw from my diversity of experiences as an executive director and the seven key themes that sustained me in those positions.

Start with fire in the belly.

You absolutely must be passionate about the work that you are doing. That energy is what will drive you in tough times and will motivate your staff to do their best work. When people are feeling down and struggling, they will look to you as a barometer of the organization’s health. If you can’t see the path to better times, they won’t either. This is not to say you should be wearing rose-colored glasses but, as suggested by Jim Collins in Good to Great, it reminds me of the “Stockdale paradox”: acknowledging the brutal facts, but never losing hope is essential to success.

Everyone is a leader; leadership is a team sport.

Leadership is not a commodity for sale to the highest bidder or a “star is born” phenomenon. I learned this when I started playing Little League in 1972. Everyone is a leader in some way, and the trick as an “anointed leader” is to identify the key to opening that leadership pathway in those around you. One tactic to avoid burnout is to spread the load of leadership throughout your organization. In his book, Leadership is an Art, Max De Pree, chairman emeritus of Herman Miller, Inc., calls this “roving leadership.” The only way to open that leadership pathway is to listen deeply to those around you to determine how their passion fits with the vision of the organization.

When staff feel that their thoughts actually do matter and that everyone is in the same boat trying to get to the same destination, there is a greater interest in paddling together. You must be genuine and authentic in your actions. When you say you want people’s input, it must be true, and your behavior must be in alignment with your statements. Leaders who are dictators in disguise will only achieve what they individually desire. There is greater success in collective power than in the power of one.

Create an environment that rewards learning and innovation.

We live in a world that seems to be changing with greater speed with each generation. As a leader, you have to be a change agent, not an idea squelcher. Fostering the desire to learn and explore new ways to address challenges enhances your success. This will keep your work interesting and allow your organization to be more effective. Many of the leadership gurus — Peter Senge, James Kouzes, Barry Posner and John Kotter — all emphasize the importance of life-long learning as an attribute of effective leaders.

Recharge your battery.

It is very easy to get sucked into the constant barrage of communication, particularly email, and never lift your head. This trap will become a downward spiral to burnout if you don’t carve out some space on a regular basis that allows you to fully unplug. Whether it is doing something outside, reading something completely unrelated to work, cooking or playing music, you must protect a segment of time that is dedicated to clearing your head of everything that burdens you as a leader. You owe it to yourself and to the cause you are serving. Take Tony Schwartz’s Energy Audit to see how you are doing.

Celebrate.

The work that you do can be fraught with what seems to be insurmountable challenges on a regular basis. One approach to mitigating the effects of these difficulties is to create a culture of intentional celebration. It could be opening your staff meeting with a standing agenda item of “Thanks and Acknowledgements,” or creating the organization’s “Let the Fun Begin” committee that is responsible for maintaining a level of celebration in the organization. Social support networks enhance productivity, psychological well being and even physical health, so make your workplace such a network.

Build a network of support.

Being a leader, particularly in an executive director position, can be a lonely place. It is important to identify a support network, perhaps a breakfast club or monthly brown bag lunches with fellow executive directors who have the same struggles as you and who can offer insights and support in maintaining your sense of purpose and inspiration.

Preparing for nonprofits of the future.

Because my generation bridges the baby boomer and Gen X generations, I have been fortunate to see the world through glasses with both sets of lenses. A leader’s appreciation of generational work styles is critical to success. Boomers display a heightened sense of commitment, dedication and long-term loyalty to one organization and employ a more traditional leadership style, whereas Gen Xers approach leadership as a flexible, “open source” affair, a collaborative work style that conveys the sense that it is everyone’s business, and we all have to do our part to achieve success.

When approaching leadership with these key themes in mind, you are sustaining yourself and developing your bench strength. You are creating a pathway for the next generation of leaders who will be ready to take over when their time comes if it hasn’t already arrived.

This article was originally published at Causeplanet.org, February 27, 2009.

Is Your Organization Leaderful?

I’m excited to lead a discussion on Leadership Succession Planning for Wegner CPAs Nonprofit Roundtable, in Milwaukee on October 15, and the subject of succession planning has led me to reflect on my past experience as an executive director of five different nonprofits.

Unsurprisingly, not one of those organizations had a succession plan in place before I departed.  In one instance, a successor was named before I departed. In another, I was able to help identify an interim executive director before leaving.

In all of these situations, my departure was disruptive for the organization, not because I wasn’t replaceable, but because change in leadership is disruptive. Having a plan in place would have lessened that disruption.

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CompassPoint Nonprofit Services has published many resources on Executive Transition and I have found “Building Leaderful Organizations: Succession Planning for Nonprofits”  to be a very informative guide to preparing for the inevitable…leadership transition!

Tim Wolfred cites three types of succession plans:

1.    Strategic Leader Development

2.    Emergency Succession

3.    Departure-defined Succession

Each of these approaches start with building leadership within the organization. Disruption is minimized when successors come from within the organization.  Here are some key questions to gauge how prepared your organization is for leadership transition:

1.    Does your organization have a strategic plan that includes staff leadership development?

2.    Is the board evaluating the executive annually? Does it understand the scope of the position?

3.    Do the executive director direct reports receive evaluations and are they solidly performing?

4.    Is the top management team high performing and capable to lead the organization in the absence of the executive?

5.    Are key external relationships shared beyond the executive – with either another staff person or board member?

6.    Do the organizational financial systems meet industry standards and are reports generated regularly for board and staff?

7.    Do operating manuals and personnel policies exist? Are they easily accessible and up to date?

8.    Have top program staff documented key duties in writing and identified another staff person to assume duties in an emergency?

If you answered  “yes” to all of these questions, you are miles ahead of the majority of nonprofits. You can then focus on building the leadership throughout your organization through targeted professional development plans and documented emergency succession plans. If you answered “no” to any of these questions, you have a place to start to build the organization’s capacity for transition.

Don’t wait until you or your Executive Director have one foot out the door.  Your organization will be in much better shape if you plan for the transition.  That is the type of legacy all leaders want to leave.

What advice do you have for nonprofits facing a leadership transition?