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?

The Importance of Upstream Reciprocity During COVID-19

As we continue to ride the unpredictable wave of COVID-19, many of us are feeling a shift in our emotional wellness. It is not uncommon to have a shift in mental wellbeing, especially when faced with large amounts of change and uncertainty. This emotional rollercoaster can lead to communication disconnects, efficiency issues, and overall lack of motivation and feeling of lesser value in the workplace. 

As leaders, how can we prevent our team from experiencing an emotional lull? 

Check in With Your Team

Since March, life as we once knew it has changed. Many people have been uprooted from their jobs or homes, and organizations have been forced to adopt work from home strategies. As we transition into this “new reality” and continue to adapt to the constant changing ways of life, it can be hard to feel grounded. 

By reaching out to your team members each day, it lets them know that you’re thinking of them and that their work is valued. This can be as simple as a text, iChat, WhatsApp message, “How is your day going?” 

This is also a good time to check in on their work-life balance. Many people, especially those who have children, have had to put on the hats of parent, teacher and childcare providers, all while trying to accomplish a 40-hour work week. By checking in, it lets your team know that they aren’t alone and gives you a better sense of those who may need additional support to navigate these uncertain times.

Show Appreciation and Gratitude

According to a study conducted by the University of Melbourne,

“The significant relationship between gratitude and job satisfaction suggests that organizational leaders can aim to boost job satisfaction by regularly prompting grateful emotions.”

When working remotely, hard work can often go unnoticed. By showing gratitude towards completed projects, goals, or tasks, your team members will feel acknowledged and appreciated. Here are four simple ways to help your team feel seen and appreciated. 

Encourage Social Connecting, Not Distancing

Much of the world is in the first phases of reopening, however “social distancing” is still being encouraged. Although it is important to remain physically distanced from one another, maintaining social connections with friends, family, and colleagues is vital for your emotional wellbeing. 

As a leader, encourage your team to participate in virtual social or happy hours. This promotes social connections within your organization and gives your colleagues an opportunity to check in on one another. By providing a sense of community, your team is likely to feel more motivated and at ease during these uncertain times. 

Standing in Solidarity, Awakening, Time for Responsibility

Over the last two weeks, the world has watched people take to the streets across the United States with outrage caused by the killing of a black man, George Floyd by a white police officer, Derek Chauvin in Minneapolis. This story has been on replay for decades, with more than 1,000 people killed by police annually since 2015, according to Mapping Police Violence, spotlighting the failure of our criminal justice system. It exposes the centuries-old structural racism and white supremacy that created a capitalism that works for the White Europeans that set foot on this continent. 

White Americans have been trained to see racism as black people’s problem. Now, we are only beginning to recognize that racism is toxic to our lives. There are missing parts of our humanity that keep us from being able to connect deeply with people of color beyond the comforts of the workplace where invariably we hold positions of power and authority or through the lens of sports and entertainment.

“Not everything that is faced can be changed, but nothing can be changed until it is faced.”

—James Baldwin

As President Obama has shared, we can make this a turning point for real change

HOW CAN WE MAKE THIS A TURNING POINT FOR REAL CHANGE?

Get Educated: on racism, white supremacy and police violence in America.

    • 11 Terms You Should Know Better to Understand Structural Racism
    • Characteristics of White Supremacy Culture, perfectionism, sense of urgency, defensiveness, quantity over quality, worship of the written word, paternalism, either/or thinking, power hoarding, fear of conflict, individualism, progress is bigger, objectivity, right to comfort.. are all norms of white dominant organizational cultures.
    • White Fragility by Dr. Robin DiAngelo unpacks and discusses the dynamics of white privilege and white fragility and why it’s hard for white people to talk about race.
    • How to Be An Anti-Racist’ by leading anti-racist scholar Ibram X Kendi points us toward liberating ways to thinking about ourselves and each other. Start a discussion using the author’s discussion guide.
    • Resources compiled for white people by Wisconsin Voices, a pro-democracy network that partners with organizations that lead campaigns to invest in anti-racist infrastructure, systems and policies that uplift and affirm BIPOC (Black, Indigenous, and People of Color) lives.

Take Action & Get Engaged: Support organizations, movements and elected officials for policy reform.

Invest in Racial Equity: Either by supporting Black-owned small businesses or donating to organizations working to challenge racism.

Mural on plywood window covering after looting along State Street in Madison, Wisconsin. Part of the Art for Justice project following the killing of George Floyd. Click here to view a slideshow of all of the murals painted on State Street. Credit: Mary Stelletello

In 1984 when I was a college student at U.C. Berkeley, I stood in solidarity with faculty and staff who protested the investment of their pension funds in the Apartheid regime of South Africa. The faculty and staff won that fight.  Ten years later, South Africa abolished Apartheid and established a new system of government.

In 2004, I had the privilege to visit Robben Island, where Nelson Mandela served 27 years in prison for his fight against injustice. I bought his book, Long Walk to Freedom at the bookstore on that trip.  He wrote:

“No one is born hating another person because of the color of their skin, or his background, or his religion. People must learn to hate, and if they can learn to hate, they can learn to love, for love comes more naturally to the human heart than its opposite. A change in our laws and policies has to come hand in hand with a change in our hearts.”

We are waking up to this reality in a new way… we must keep going because as white people, this is our fight for a change in our hearts and humanity. Black Lives Matter.

Building Resiliency Through the Pandemic

As “stay at home” orders extend across the country, and we begin to be more personally impacted by COVID-19, our ability to remain optimistic and hopeful becomes increasingly challenged.  We continue to experience expectations of productivity and effectiveness in “work from home” environments, managing virtual teams and meeting deliverables. 

One of humanity’s most powerful survival skills is our ability to build resilience.  Resilience means adapting well in the face of adversity and is associated with a mindset that recognizes our capacity to grow through life-altering and stressful events.

According to Dr. Arielle Schwartz, “Resilience is not a trait that you either have or do not have; it is a set of strategies that can be learned and practiced by anyone.”

Dr. Schwartz offers her framework of six pillars of resilience:

    1. Growth mindset: Cultivating an understanding that life experiences, whether positive or negative, provide ongoing opportunities for learning and development.
    2. Emotional Intelligence: Recognizing that you will experience feelings of fear, exhaustion, anger, sadness and a host of other emotions as a part of this global trauma we are living through.  This is normal and part of your innate resilience. Gaining tools to navigate through this process allows you to reclaim your balance.
    3. Community Connections:  This pillar has been the most dramatically altered during the pandemic as we have previously associated “connection” with in-person interaction. We now must be intentional at creating virtual connections.  We may be physically distancing but social solidarity is essential.
    4. Self-expression:  Activating the creative part of your brain, the prefrontal cortex through writing, art, dance, music increases access to the hormone oxytocin which helps you feel more social connection and relational resonance.
    5. Embodiment: Our bodies need to process stressful events through breath and movement. When these natural impulses are ignored the biological effects of stress persist.  Activities such as yoga, meditation, and mindfulness breathing build resilience.
    6. Choice and Control: The belief and acceptance that there are events in our life that are completely outside our control.  Resilience comes with knowing that there are still things in your life that you do have control over.

Building resilience is a daily practice of small behaviors that support your physical, mental, emotional, social and spiritual health.  In taking microsteps every day, you will start to feel stronger, optimistic, capable and connected to others.

Finding our way in the New Normal…

As the month of March began, we were watching the Coronavirus spread across China and Europe but here across the pond, we continued to operate as business as usual.

I look back at notes I took at client meetings and coaching calls during the first week of March and it feels like it was a different reality.  Indeed it was… since then, our inboxes and feeds have been exploding with news of the spread of the virus across Europe, U.S. and North America. Restrictions are being put in place daily to flatten the curve. We are trying to find a new rhythm of life navigating COVID-19.  We are experiencing the metamorphosis of a new world order.

With this sudden dramatic shift in our daily routine, our brains revert to our most primitive state, the reptilian brain. “What is going on? How can this be happening? This isn’t real. This doesn’t make any sense? I need to protect myself”.

The reptilian brain is the oldest part of our brain, developed in primitive humans to make decisions to protect us from the lions, tigers and bears. When we are in our primitive brain we are reactive, we take a stance of fighting, fleeing, appeasing or freezing.  None of these stances can help us navigate this new normal.

If you have been reading my blog over the last few years, you have seen some posts about Conversational Intelligence® or C-IQ.  Conversational Intelligence is about moving from the “I-Centric” primitive brain to the “We-Centric” prefrontal cortex part of the brain. The capabilities that reside in the prefrontal cortex are empathy, creativity and innovation.  These are the skills we need to find our way in the new normal.

Photo source: Conversational Intelligence® for Coaches

What does it take to move from the primitive brain to the prefrontal cortex?

    1. Recognize you are in your primitive brain and take several breaths. This calms the nervous system and slows down the cortisol which is the hormone activated by this fear response.
    2. Reduce the amount of media you consume about the pandemic (don’t scroll your phone before bed or immediately when you wake up). This allows your brain to start and end the day with more optimism.
    3. Reach out to friends and family members who are finding their way in this new normal. We may have “stay at home” orders in place but humans are social beings. We need social solidarity to move to the prefrontal cortex.
    4. Take Microsteps of creating new habits. There are SO MANY resources out there but I really like what Thrive Global is curating in their new series, “Thriving in the New Normal” that offers Microsteps about sleep, nutrition, stress, and more to help us proactively strengthen our immune system and build resilience. 

During this time, our initial tendency is to go to that primitive brain and hunker down, hoping that it will pass.  We all know now that we are in this together for the long haul. We are co-creating our new normal.

If you are in your primitive brain, feeling lost, stuck, not knowing what steps to take, let’s chat. I am here for you and look forward to co-creating the new normal with empathy, creativity and innovation. A new normal that works for all of us.