March 6, 2014

Want a Successful Merger? Let Staff Plan It

Tap your senior staff and trust their ability to provide valuable analysis on the potential upsides and roadblocks of merging with another organization, says Elisabeth Babcock, president and CEO of Crittenton Women's Union (CWU). In CWU's case, the staff at both legacy organizations envisioned a more streamlined and strategic organization that could propel a greater number of low-income women to economic independence.

By: Elisabeth Babcock

This summer will mark an anniversary for Crittenton Women’s Union (CWU). It’s been eight years since serendipitous circumstances led to the merger of two 19th-century Boston organizations, creating a powerful champion of women’s economic mobility.

During a chance meeting—on an elevator in Boston’s Financial District—the board chairs of Crittenton Inc., a human services organization providing shelter and services to homeless women, and of The Women’s Union, an advocacy and workforce development organization for low-income women, realized they both were serving organizations that had CEO vacancies. This realization catalyzed a much broader discussion about an opportunity beyond most nonprofits’ comfort zone—a strategic merger. (See just released case study, “Crittenton Women’s Union: Merging to Move More Women to Economic Independence.”)

While the merger took place in June 2006, the chance meeting on that elevator marked the beginning of a unique way of working that has since become fundamental to CWU’s action- oriented approach: strategically opportunistic, and committed to listening to staff and beneficiaries to understand what isn’t working, what could work, and whence the next big opportunity for impact.

Of course, merging alone doesn’t automatically lead to better outcomes, or even to stronger organizations. But in our case, merging provided an opportunity to blend the strongest elements of both legacy institutions to create a more powerful machine—largely because our board made the unusual move, at the outset of deliberations, to ask staff to figure out the most powerful blend of the two organizations.

Today, we are firmly rooted in an organizational model that combines the strengths of The Women’s Union (research and advocacy) with those of Crittenton (direct service) all targeting one clear mission—to help low-income women achieve economic independence.

This singularity of purpose permeates our entire organization and we are laser focused on that objective. Like a Venn Diagram, the intersection of these three areas and the way each is used to enhance the other have furthered our impact. Here’s an example of how this works.

Through conversations with program participants, CWU staff learned that insurmountable student loan debt and default on student loans were a huge barrier to educational access for many clients. The front-line staff relayed this information to CWU’s research team, in the hope that they could uncover more detail about the root and scope of this problem. During 2009-2010, the research department undertook a survey of this issue among CWU clients. Their data revealed:

  • Seventy-nine percent of CWU program participants who were struggling with student loan repayments had attended at least one for-profit college.
  • Fifty-five percent of the loans taken out by students enrolled in at least one for-profit college were in default.
  • Less than half of the program participants who had defaulted completed their educational course of study.

CWU then published these findings in the brief “For Profit Colleges and the CWU Client Experience,” which our advocacy department used to help elected officials and other stakeholders understand how our program participants were negatively affected by the for-profit college industry. The advocacy team then used this data to push for stronger oversight of these businesses to prevent them from preying on low-income consumers.

The combined efforts of CWU’s program, research, advocacy staff, and advocacy partners led to an important legislative victory. In May 2012, Massachusetts Governor Deval Patrick signed into law An Act Relative to Oversight of Private Occupational Schools, which consolidates the regulation and oversight of for-profit colleges to provide greater protection for students. CWU’s post-merger structure allowed us to take the lead in bringing this pressing issue to the Massachusetts legislature.

This is just one example of how CWU is operating more effectively because of our merger. The advice I would offer to organizations exploring a merger is: think big and broad to make it worthwhile. If you are going to head down this complex path of a merger, be bold and strategic enough to envision an organization that will allow you to more dynamically and effectively address critical community needs.

And, in the process of doing so, tap your senior staff and trust their ability to provide valuable analysis on the potential upsides and roadblocks of this type of transition. In the case of Crittenton Women’s Union, it was staff at both legacy organizations who were able to envision a more streamlined and strategic organization that could propel a greater number of low-income women to economic independence.

Elisabeth D. Babcock is president and CEO of Crittenton Women’s Union. Previously, she served as president and CEO of Hearth, a nonprofit she developed into a national model for housing, advocacy, and research for homeless elders, and as vice president of strategy for Northeast Health Systems, a $285 million vertically integrated health care system.

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