What Associations Should Know About Successful Mergers and Acquisitions

As association mergers and acquisition activity continue to increase, it’s important for association professionals to understand the ins and outs of a successful M&A. One expert shares how ensuring a good cultural fit can help associations ensure a smooth transition and provide greater value and impact to members and the organization.

Associations have seen an increase in mergers and acquisitions in recent years. From associations looking to broaden their reach to those acquiring new capabilities to expand their value propositions, associations are looking to M&A to drive greater value and social impact in today’s increasingly competitive landscape.

Given this increase, associations need to ensure that there’s proper integration and cultural fit once the deal goes through.

“No matter how well you plan, some issues will arise down the road,” said Pietro Macchiarella, CAE, director of the data and insights center of excellence at the Young Presidents’ Organization. “But, if you build a strong culture for the associations, you can deal with anything. For example, having management from both organizations can help lower the ‘us vs. them’ mentality, and people are more likely to operate as a team.”

Determining your organization’s non-negotiable items, recognizing the importance of cultural fit, and providing clear communication before, during, and after the M&A can help ensure the short- and long-term success of the deal.

Non-negotiable Items

According to Macchiarella, there are typically two categories of items that organizations want to protect during an M&A. The first are issues that may appear important but can usually be negotiated. For example, a longstanding annual event or tradition that members of one organization hold dear but may not align with the strategic goals or financial realities of the merged entity.

“While it’s cherished, it could be adaptable or transformable to fit the new organization’s objectives without losing its core essence,” Macchiarella said. “Figure out these items early, otherwise they could snowball into the post-merger phase and cause unnecessary problems.”

A non-negotiable item could be the organization’s core mission or purpose. For instance, if one association is dedicated to educational outreach and the other to professional development, any merger must ensure that the new entity continues to address both these aspects in some capacity, as they are integral to the identity and value proposition of the merged organization.

“Before a merger, associations should conduct a sensitivity analysis to understand which issues could be impacted,” Macchiarella said. “M&As can impact membership dynamics, current members, recruitment, and many other areas, so pay attention to the findings and try to distinguish between what is and isn’t negotiable.”

The Role of Culture

“Before the merger, assess the cultures of both organizations,” Macchiarella said. “Understand their values, norms, and practices to identify similarities and differences. Engage leaders, members, and staff from both organizations in discussions about the merger. Their insights can be invaluable in understanding the cultural dynamics.”

He recommends developing a shared vision and set of goals for the merged entity, which resonates with members of both organizations. This helps in creating a unified direction. In addition, it’s a good idea to create a plan for integrating the two cultures, addressing potential areas of conflict, and leveraging cultural strengths. This might include joint activities, workshops, and shared projects.

“Continuously monitor how the merged culture is evolving and be ready to adjust as necessary,” Macchiarella said.

Communication and Check-Ins

Consistent, clear communication is vital throughout the merger and acquisition process and after the deal has gone through.

“You want to keep staff and members informed about the progress and stages of the merger,” Macchiarella said. “This can be done through regular newsletters, emails, or special briefing sessions.”

He also suggests organizing sessions where staff and members can ask questions and express concerns as openness can foster trust and reduce uncertainty. Associations can establish specific channels like a merger webpage or hotline where updates are consistently posted, and inquiries can be made.

“Ensure that communication is inclusive,” Macchiarella said. “Acknowledging the histories and cultures of both organizations and emphasizing the benefits of the merger for all parties involved.”

The work doesn’t end after the deal is complete. Associations should develop a formal process for evaluating its progress and a clear path for the relationship in the short- and long-term.

Macchiarella recommends providing staff with training opportunities after an M&A, especially for those from the merged or newly acquired organization. These employees need to adapt to new roles and operating systems, as well as any cultural differences between the organizations.

“This process can leave a long legacy,” Macchiarella said. “Conducting frequent check-ins, recognizing milestones, and offering training can help ensure that everything is operating smoothly and reinforce a strong culture and team dynamic.”

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