Are Mergers Good for Social Enterprises?

Sections of this topic

    It’s very rare for social enterprises to merge. And when they do, it’s usually because one of them is failing. But let’s consider a situation where impact and sustainability might be enhanced if two successful social enterprises were to merge. Should they?

    Mergers are not for everyone. Let’s face it, social entrepreneurs (can) have big egos. They have a vision of reality that can be both inspiring and unrelenting. Finding a way to combine their vision with another headstrong social Venture Forth!entrepreneur can be challenging. Moreover, often the promised “synergies” of coming together don’t turn out as promised.

    Also, organizational cultures can be as different as the personalities of their leaders, making it doubly hard to combine forces into one team that works well together. Finally, in almost every merger, one organization “wins” (keeps its name, its CEO becomes the new CEO) while the other “loses.” Mergers among true equals are very rare.

    So don’t do it? Well, not quite. But only do it if you’ve really done your homework to evaluate the benefits, and been really honest about the challenges you will undoubtedly encounter. And remember that merging is just one option among many in figuring out a different relationship with another organization. Take a look at the Partnership Matrix developed by La Piana Consulting.

    Oh, and remember one more thing; it’s a lot easier to get into a merger than to get out of one. So when in doubt, don’t do it.

    Good luck!