The Executive Search – Merger Assessment

When Should the Assessment be Used? At hand of an executive director’s transition, whether that is impending or with a set future date; whether foreseen or unforeseen and when a board wishes to deliberate on its full suite of options. The assessment integrates a sophisticated understanding for strategic restructuring options with deep knowledge of executive search – and analyzes the relative risks and benefits of each

What Does the Assessment Deliver?

  1.  An analysis rich and user-friendly platform for board decision making with scenarios for board deliberation.
  2.  A risk/benefit analysis on alternative leadership transition pathways; executive search, merger or another form of strategic restructuring.
  3.  The most targeted assistance available to nonprofit boards to responsibly navigate executive transitions by considering your full suite of options.
  4. The final product includes an assessment report and a user-friendly decision matrix table (described below).

The Transition Matrix:

Is a tool that synthesizes the background work of the assessment into a user- friendly table for board decision making. The table compares risks and benefits of search and strategic restructuring along a spectrum of critical decision considerations. The table is adapted to each organizational situation but will incorporate most of the elements below.

  • Mission
  • Challenge to Administrative Systems
  • Intensity of Required Change
  • Leadership Challenge
  • Core Strategies: Opportunities & Obstacles
  • Challenge to Culture
  • Brand & Reputation
  • Fiscal Viability
  • Impact & Opportunity for Staff
  • Policy & Funding Environment, Market Trends

Why is the Assessment a Good Investment?

Your intention is not simply to muddle through your executive transition but to emerge on the far end stronger, more impactful and more resilient. The core innovation of the assessment is that instead of comparing your organizations current or recent historical state to a potential merger or other corporate integration, it analyzes the two alternative future states, executive search and strategic restructuring, on an equal footing, each with their own uncertainties and risks for future performance. Strategic restructuring in the nonprofit sector as seen in merger, consolidation, asset transfer and parent/subsidiary arrangements, while gaining in familiarity over the past two decades, continues to be an under – utilized option in the suite of strategies to maximize both a nonprofits social impact and the organizational resilience to support this impact. Thus, board members and nonprofit executives need a structured, reliable and reasonably priced way to assess the relative risks and opportunities presented. Going through the assessment process will reduce your costs for the next stage in your transition, whether executive search or merger.

In part because the restructuring option is less widely known than search, it is usually considered dramatic, risky and even ofensive (to organizational identity). This view keeps restructuring confined to use in a narrow set of circumstances by those we might call: the bold, the experienced and the desperate. The goal of the assessment is not to sell nor promote merger or restructuring but to create a structured process that objectively analyzes the risks and benefits of each approach.

What are the Key Steps of the Assessment Methodology?

The assessment is a risk and opportunity analysis. It proceeds through five steps:

1. Current State Assessment

2. Executive Profile: Risk & Opportunity

  1. Assesses the suite of capabilities required by a prospective, permanent executive director, in order to succeed within the context of the organization’s current capabilities and business model and the challenges and opportunities presented by the market environment.
  2. Provides a preliminary assessment of how challenging it will be to find such an executive given the organizations stated salary, geography and sector expertise parameters.

3. Market Scan

  1. Through targeted interviews with peers, funders and occasionally policy makers, identifies if the funding and policy environment strongly suggest greater scale will be critical to a secure business model.
  2. Provide a preliminary assessment of whether there are potential restructuring partners with the resources and capacities to provide solutions and support to key challenges, faster and/or more efectively than can be achieved through search.

4. Merger Risk Consideration

  1. Where a full merger or consolidation is on the table, predictable risks and downsides to these paths must be soberly considered up-front, such as: significant transaction and integration costs, culture fit challenges, potential lengthy periods of uncertainty as a transaction is prepared and until true integration is accomplished.
  2. Merger related risks must be considered against the possible downside of taking too little action and risking complacency and ‘more of the same’ following a search.

5. Side by Side Comparison – of the risks and opportunities for each pathway to lead the organizational towards a future with stronger impact and greater business and financial resilience. Impact on the following headline areas are considered:

  1. Quality of services and efficiency of delivery
  2. Financial resilience and strengthening of the business model
  3. Strengthening of management information systems, management practices, professional development and recruitment and retention of staff
  4. Strengthening and/or transforming organizational culture