NOTE: For some reason, several of my readers did not receive this article because of some kind of Internet snafu. So, I’m posting it again. My apologies to those of you who are seeing it again.
I recently had a discussion with a business owner about one of my pet peeves.
As the previous Executive Director of a small nonprofit, I realized how difficult it had become to secure funding. Economic dips and other issues caused a shrinkage in foundation/corporate grant availability. The number of nonprofits expanded rapidly, which led to fierce competition. And grant emphasis became more localized, focusing on state or community as first criteria. We became that bunch of crabs, each one fighting to get to the top of the basket.
It quickly became apparent to me that many of these small charitable organizations had the same or similar missions and/or visions. So, I thought why not consider merging to become stronger as a partnership or collaboration? When I initiated this discussion with various Executive Directors or nonprofit board members, I soon discovered what seemed a simple solution to me was anything but. Interestingly enough, the same roadblocks arise in conversations with small business owners.
Unfortunately, too many times the hesitation boils down to ego-related complications. One party may believe they are doing a better job, which could be a true or false perception. Another stumbling block I’ve come across is unwillingness to share glory or success with another entity. Often, a leader’s inability to broker a partnership results in resistance from board members or otherwise invested individuals.
Granted, some causes for apprehension are justified. The saying – You know what you have, but you don’t know what you will get – is true. But sometimes nonprofit and business leaders have to step out there and take that leap of faith in order to grow their organizations. Multiple conversations between potential partners/collaborators should address issues such as:
Are each entity’s long-term goals, visions, and strategies similar enough to warrant a partnership?
What skills and experience are each partner bringing to the merger?
What are each partner’s strengths and weaknesses?
How does each partner envision business growth and at what pace?
Are the merging organizations culturally compatible?
How do the entities perceive each other’s work ethic?
What does the financial health and viability of each organization look like?
How will roles and responsibilities be allocated?
Are there other stakeholders (customer, suppliers, etc.) to be taken into consideration?
How will the entities dissolve the partnership if it does not work out?
I highly recommend listening to an interview Pamela Daniels and I posted in the Handling Your Business Facebook group we facilitated until last year. The topic of discussion is scaling your business and our interviewee, Albert Hurston, CPA , addresses what small business owners need to consider and act upon in order to grow and sustain a successful company. The man dropped so many words of wisdom that I often refer to his comments. One thing he said that resonates (and I paraphrase) is your focus should be learning how to run a business with enough savvy that you stay in business. Read that again!
The unknown aspects involved with partnering or merging can be daunting. Addressing the above-mentioned considerations, along with other issues that may arise, presents quite a challenge. However, if you are a small business owner who has been fortunate enough to gain many clients but find yourself drowning from the inability to effectively meet their needs, a partnership or merger could be a viable solution. I’m just sayin’.
I think ego is the biggest stumbling block to collaboration.