Strategic Restructuring

In their groundbreaking national survey of 400 randomly sampled nonprofit organizations, Amelia Kohm and David La Piana found that almost one in four  responders reported some type of restructuring experience (Strategic Restructuring for Nonprofit Organizations Mergers Integrations and Alliances, Kohn and La Piana, Praeger, 2003). Kohn and La Piana identified six types of partnerships, divided into two broad categories - integrations and alliances. Moving from most autonomy to most integrated, they named the six categories:  Collaboration, Administrative Consolidation, Joint Programming, Joint Venture, Parent-Subsidiary, Management Service Organization, and lastly, Merger. Many New England nonprofit organizations and funders have experience or interest in some of these types of cooperation.

While Kohn and La Piana found that restructured organizations believed they profited from consolidation in areas such as cost savings, improved client services, shared expertise, improved benefits to staff, and enhanced reputations – especially to funders - they were hard pressed to prove it. Moreover they also reported significant hidden costs of consolidation. Organizations found that they had unanticipated costs in time, financial expenditures, lowered Board and staff morale, leadership issues, cultural differences between organizations, identity issues, and staff turnover. Perhaps most importantly, the researchers found that successful strategic restructuring required organizational commitment at the highest level, research and planning, openess and communication between potential partners, trust building, and strong staff teams.

If your organization is considering some type of strategic restructuring, don’t go it alone. The principals at NPT have direct experience in brokering successful organizational transitions and strategic restructuring. N. Paul TonThat assisted two national medical foundations arrange and consolidate a merger over several years that has allowed them to survive and thrive.(read some of Paul’s Observations on Successful Mergers) Defining the path to a successful strategic restructuring is too important to be a learn-as-you go experiment. Knowledge is power. We can help - call us today.