Alliances & Mergers: Achieving Strategic Diversity
In our recent blog series on Mission Advancing Alliances & Mergers, my colleagues and I have made a case for nonprofit collaboration, outlined the role of mission alignment for success, and discussed the importance of corporate cultures. In today's installment, we cover the topic of strategic fit for merger multiplication.
To find good strategic fit with a potential partner, first leaders must understand the shape of their own strategy. This may sound simple, but ask the average employee about the organizational strategy, and you'll often get a blank stare. Therefore, take time to clearly articulate and visualize your strategy with quantifiable goals that promote action. Strategy is a behavior, not just a set of propositions. Once that step of self awareness is complete, you can begin looking for a potential partner that has a complementary strategy to your own.
For successful nonprofit alliances or mergers, strategies should fit together like two pieces of a puzzle. When two organizations come together, their missions and cultures should provide common ground, but their strategies can be quite unique. This creates a 1+1=3 multiplication effect. As my friend Toyditz Cosico, an asset-based development guru, often says, "Don't compete with each other, complete each other." Recently, I was part of a partnership between a prison ministry and an economic development nonprofit that equipped returning citizens to be better prepared for entering the workforce and managing their personal finances after re-entry. This created an extremely complementary set of programming interventions that could improve outcomes and reduce recidivism. Without such a partnership, the economic development agency never could have reached the incarcerated population and the prison ministry wouldn't have the economic expertise to equip inmates. These types of complementary partnerships create a multiplication effect that's hard to beat!
Another example of complementary strategies can be seen in the recent merger between Project Concern International (PCI) and Global Communities. PCI initiated the merger process two years ago and was driven by a desire to grow more resilient, gain scale, and improve impact, according to Carrie Hessler-Radelet, the President of Global Communities. While assessing potential merger candidates, PCI found that of the combined 35 countries that PCI and Global Communities reach, they only overlapped in four. This makes the $240 Million merger highly leveraged for reaching new communities with greater efficiency.
In summary, here are a few recommendations for gaining strategic diversity through alliances and mergers:
Know your strategy first. Get clear on your strengths, methods, and goals.
Consider your strategic gaps. What would you like to accomplish but can't?
Look for alliance or merger partners that help you do more strategically than you could alone, like two pieces of a puzzle.
To learn more about Mission Advancing Alliances and Mergers, visit Strategy for the People.
