Collaborate to Scale
Collaborate to Scale by Debra Thompson, CEO Founder, Strategy Solutions
Eighty percent (80%) of something is better than 100% of nothing if the alternative is going out of business. I have said these words MANY times over the years as I have encouraged organizations to collaborate or even consider mergers to ensure sustainability. Yet, I have also seen businesses close before they put any real effort into collaboration. Why does this happen, especially when fiduciary responsibility calls board members to continue the mission of the organization as long as the need exists?
I think that there are a variety of reasons, but more often than not, I think that leaders shy away from meaningful collaboration because they are afraid of the “M” word (merger). Sadly, this fear limits good strategic thinking about all of the possibilities and potentials that could exist through meaningful collaboration.
Figure 1 illustrates the “continuum” of potential collaboration options, the most extreme of which (on the right-hand side) is corporate merger or acquisition. There are plenty of options for your organization to consider on the left-hand side or in the center, that allow autonomy and individual organizational leadership to continue, which taking advantage of “economies of scale” or subject matter expertise that another organization has that yours may not possess. Collaboration, administrative consolidation, and joint programming are all effective ways that you can create “win-wins” with other organizations short of mergers.
How do you get started with this thinking? Here are a few suggested steps:
1. Assess your strengths and needs: conduct an internal self-assessment to determine what your organization can bring to the table and what you would be looking for in a potential partner.
2. Articulate your goals and expected outcomes for your organization overall, then for a potential alliance. The board should ask and answer questions like “What do we want to accomplish? What are we looking for in a partner and how will we know that the partnership is successful?” before diving into any specific discussions.
3. Define partnership criteria. Identify specific criteria for a successful relationship that can be used to evaluate various options. Clashing corporate cultures is one of the main reasons that collaborations fail, so it is imperative to understand what you are looking for and identify potential partners with compatible core values and cultures. During these initial phases, the Executive Director’s role is to develop relationships, explore possibilities, and to present ideas to the board for their strategic discussion.
4. Create a collaboration committee. Once you start considering a specific agency that meets your criteria, the next step for the board is to pass a resolution authorizing a “collaboration committee.” This is a designated subcommittee of the board, including the executive director, who is authorized to negotiate on behalf of the agency, bringing wisdom and thoughtfulness to the process. David LaPiana, the author of several books on nonprofit mergers, cautions not to “let unauthorized discussions among individuals (for example, the executive director or a small group of board members) proceed too long or too deep without taking the matter back to the entire board for consideration. Nothing can turn a board sour on a recommendation so quickly as feeling that the negotiations have already begun or they are being asked to act as a rubber stamp.”
The collaboration committee discusses the issues to be negotiated, including confidentiality, a memorandum of understanding, the collaborative structure, communications within the organizations and to the community, along with the specific components of the due diligence process, that culminates in the implementation plan. LaPiana also recommends the use of “rolling meeting minutes,” so that previous information is “all in one place” and available during meetings.
Developing a collaboration or an alliance does not have to be a long, arduous process but can make a meaningful difference for organizations that are able to work together.
Figure 1:
Source: LaPiana Consulting, Used with Permission
Leadership means doing the “right things,” not the “easiest things.” Today’s organizational leaders
should not let fear or the perceived challenges associated with a collaboration become a
the barrier to long-term sustainability. Led by a committed board and with the assistance
of a skilled facilitator to get you started if the task seems daunting, following these
steps can result in a successful long-term future.
Debra Thompson is CEO and Founder of Strategy Solutions and is a trained facilitator in the LaPiana method of collaboration. She is also a licensed trainer, consultant, and peer reviewer for the PA and National Standards for Excellence:® An Ethics and Accountability Code for the Nonprofit Sector.