Polarising or complementing

Merging is like marriage

Roughly 25% of all non-profit organisations, in any given year, are either actively merging (or acquiring, or being acquired), or considering it. There are many reasons: scale effects, workforce attraction, financial sustainability, and complementary services to deliver a completeness of vision.

I am often asked to advise on the strategic wisdom of mergers and my advice is always the same.

Don’t start with due diligence. This is the comprehensive investigation to uncover any potential financial or legal risks or hidden issues that could impact the merger's success. That can wait.

Instead, start with merger feasibility.

This is like the Indian matchmakers, or ‘ghataks’, who begin by understanding both families’ preferences, exchanging biodata and photos, followed by actual meetings of the intended couple.

My process is the same. I ask each intending board eight questions:

1. What is your purpose in merging?
2. What are the specific outcomes you want?
3. What capabilities do you bring? What capabilities do you want?
4. What are your non-negotiable values or cultural practices?
5. What is your current and desired geographic or market segment coverage?
6. What assets will be merged (tangible and intangible)?
7. Who are your key stakeholders, and what will their reaction be?
8. What are your ‘musts’ regarding leadership and governance?

I compare their responses, in detail, and like a ghatak I can form a view quickly. Whether they should merge unreservedly. Or merge, but with cautions. Or, walk away. And, walk away smiling, because they haven’t spent six months and half a million dollars on due diligence with an unsuitable marriage partner.

Question: How do you weigh up, quickly, whether a merger will truly complement what you already do, or are?

Sole traders inside large organisations

I met with a senior executive from a large university, let’s call her Sarah, who used this phrase: “We need to de-risk the sole-trader mindset".

Huh?

Sarah was describing senior people (in her case, researchers) acting as independent operators. They owned IP, ‘owned’ students, and owned projects - hindering collaboration and limiting the larger potential of the university.

And, it’s not just universities. Medical specialists in hospitals are famously resistant to aligning their efforts. Aid organisations struggle with "eat what you kill" funding distribution. The impact is clear: there are many missed opportunities for exponential growth.

The initiative Sarah and I were discussing has billion-dollar potential to change the shape of an entire, very large workforce sector. But, it could be limited by the million-dollar mindset of a single research group.

So, we spoke of three ways we could expand the thinking beyond ‘sole trader’:

1. Competitive Ownership: We could develop a strategic framework within which senior leaders of groups could claim ownership over its parts, fostering healthily competitive collaboration.
2. Beneficial Purpose: We could get leaders to focus on the "why." Many late-career leaders crave a lasting legacy.
3. Reverse Mentorship: We could bridge knowledge gaps and power gaps in one fell swoop by pairing senior leaders from within the group with rising stars from elsewhere to foster mutual learning. This keeps them current and strengthens knowledge transfer.

The intent isn’t to eliminate sole traders or turn them into corporate automatons, but to leverage their independent thinking while ensuring their actions are aligned with overall vision and priorities.

Question: How can you draw out the ‘sole traders’ within your organisation and engage them to contribute to the greater good?

Co-existence of opposites

In my suburb of Fitzroy in Melbourne, our local government has just reduced the speed limit to 30km/h. I honestly doubted I could even drive a car that slow. But I was wrong - I can. It does feel like walking speed though, and I feel enormously frustrated if I’m wanting to get somewhere fast.

But.

When I’m walking, or cycling, I like it. I enjoy the fact that everyone is moving at a human speed. And, the data tells us that 40% of pedestrians hit at 40km/h will be seriously injured, whereas at 30km/h it’s less than 10%.

F. Scott Fitzgerald said that intelligence is the ability to hold two contradictory ideas in your mind at the same time. And, it turns out, I can. I both hate the speed limit. And love it.

Many organisations face absolute mandates: eliminating plastic packaging, achieving zero-defect production, or maximising shareholder value at all costs. While these goals can be laudable, the reality is often more nuanced.

Consider the client who is grappling with eliminating all soft plastic packaging in Australia (yes, we’re looking at you, Tim Tams). In some cases, plastic might be the most sustainable option – safeguarding food quality or preventing product contamination. The key lies in understanding the context, recognising that absolutes can have unintended consequences.

True leadership involves finding the middle ground – where seemingly opposing goals can co-exist to create a more sustainable and responsible outcome.

Question: In your work, when should you welcome the co-existence of opposites?

I always love knowing you’re enjoying reading, so do click the 'Like' below. It only takes a second. And there are literally no unintended consequences.

And it’s not too late to grab one of the very last tickets to the fabulous documentary, UnCharitable, that I’m hosting on Wednesday week (5th June) at Cinema Nova in Carlton in Melbourne. I’d love to see you there.

Buy a ticket here

Between now and next Friday, enjoy looking for the polarities in our world, and think of how you can use them productively.

Andrew