in sync

Conversations about a possible merger of three Perth-based community service organisations began in February 2016. By September, it was a fait accompli. The swiftness of the merger is particularly impressive given the number of parties involved.

Community First, Care Options and Volunteer Task Force came together with the aim of improving and extending their services. The new organisation, with the interim title of Community Care Force, employs more than 400 people and provides mental health support, home care and disability services to more than 10,000 clients across metropolitan and regional Western Australia.

Planning for growth

All three organisations had growth on their strategic plan and were on the lookout for possible partners.“We recognised that we needed to grow if we were going to survive in the new world order,” says Barbara Powell MAICD, former chair of Care Options and a director of Community Care Force.

“So much change is happening in our sector at the moment that our reality could have been a slow death,” agrees Andrea Hall GAICD, former chair of Community First and, briefly, a director of Community Care Force. “Even if we were all around in five years’ time I doubt we would be doing as much as we wanted for the people we care about.”

As chair of Volunteer Task Force, Moira Watson GAICD had spoken to a few other organisations about some form of integration. “These conversations were about acquisition,” says Watson, who is chair of the new Community Care Force. “What really attracted me to this was the idea of a merger of equals, which we decided on right at the start.”

Hall believes this was fundamental to their eventual success. “In general, the not-for-profit (NFP) sector sees acquisition as the only way to grow,” she says. “I think this is a pity as in cases like ours, a true merger is more likely to succeed.”

The organisations were working in the same core area and had similar values, mission statements and visions. They were also of similar size.

“We became comfortable very quickly with the idea that we were talking to like-minded organisations heading in a very similar direction,” says Powell. “We could also see a lot of synergies that could be leveraged in a genuine merger.”

Building relationships

The three chairs decided to meet weekly. “These were formal project management meetings but we chose an informal setting that made it easy for us to develop a relationship of transparency and trust,” says Watson. “We quickly established that, if one of us had a concern, she could put it on the table and we would discuss it quite openly. This was very important because it set the tone for the whole organisation and encouraged management to develop their own positive relationships.”

Communication was also a critical factor. “We worked very hard to make sure that all three boards were in the loop,” says Powell. “We invited all of our directors to regular workshops and this meant we could listen to feedback and deal with any concerns as they arose rather than allowing them to fester.”

Establishing a new board

The chairs agreed to a set of principles that would govern the process of integration. “We examined all of the things that had stopped other mergers from going smoothly and agreed on how we could navigate the challenges,” says Hall.

Priorities included confirming the composition of the new board and appointing the chief executive officer (CEO).“We agreed that we three chairs would automatically have a place on the board and that we would each take two of our own directors,” says Watson. “We asked all of the directors to provide a CV and to explain why they would like to join the new board and then we interviewed them all. Our aim was to achieve the best possible mix of skills and experience.”

Once the legal aspects of the merger had been finalised, the new board elected the chair and deputy. “It was a very smooth process from start to finish,” says Watson. “And, when the new board came together for a strategic conversation, it was reassuring to see how much the directors already knew because they had been so closely involved with the process.”

A major recruiting company helped the board to locate the right CEO. “We interviewed eight people, including two of the three former CEOs, before deciding to appoint Dan Minchin,” says Watson. “He was one of the external applicants but he has similar experience with the Silver Chain Group and as a consultant in areas that are very relevant to us including strategy, business development, transformation and service delivery.”

Culture and history

Growth may have been the main driver for the merger but it was not the only goal. “We wanted to learn from each other – to build on each other’s strengths and take the best from each organisation so that we could improve our capability and efficiency as well as increase our size,” says Watson.

The three chairs were also very mindful of each organisation’s cultural and historical legacy. “We included a cultural survey in with our financial and legal due diligence,” says Hall. “This showed that we had many more commonalities than differences.”

Inevitably, some differences did emerge over the course of the merger but they proved to be minor and easily resolved. “It is interesting to see how the new organisation is drawing on aspects of all three to forge its own culture,” says Watson.

However, there was never any intention of creating a homogenous entity. “We made a point of identifying which elements were unique and important to each organisation,” says Powell. “We were then very careful to carry those over so that we could build on them. All three organisations have a significant history and we wanted to respect that.”

A painless process

All three women agree that attitude played a vital role in what proved to be a swift, successful and pain-free merger. “There was never any power play because we have always acknowledged each other as equals,” says Powell “All egos were left at the door.”

They and their teams also put in a great deal of hard work. “The existing CEOs were key to the whole process and the management of each organisation deserves a lot of credit,” says Hall. “Managers from the different organisations stepped up as they were needed and they worked very well together from the outset.”

The merger may be officially complete but there is still much work to be done. “Our immediate plans are to complete the operational details and establish the strategic mindset – we’re very focused on determining the direction the organisation needs to take,” says Watson.

“This is more of an approach than traditional strategic planning. We recognise that there is a changing dynamic in the sector so our intention is to put systems in place that will enable us to be more agile and adapt quickly to change. The board’s focus is ensuring the organisation runs smoothly and, now that we’re physically and financially bigger, we’re also expecting to find more opportunities for growth.”