Many of you reading this column are in positions of leadership in your rural communities. Some serve on cooperative boards, while others help in school, church or other community service organizations. In some cases, these various boards of directors may be called upon to guide an organizational merger.

Over the years, I have been involved with numerous mergers. Some of these were successful while others produced a less than spectacular result. To help increase your chances of success in a merger situation, you should follow some general guidelines.

Some of the most successful mergers exhibit a consistency in core values between the merged companies. These values could range from profits to ethics to the workplace culture. I suggest that the parties involved take the necessary time to examine the values upon which each organization is founded. Successful mergers build on commonalities and negotiate differences with a win-win approach.

Next, the majority of successful mergers usually involve joint strategic business planning. This facilitates the critical thinking process for each. Also, this process provides for critical needs such as a revised business plan and goals.

A big factor for successful mergers is the selection of the new CEO and management team. If this component is not thorough and well thought out, the newly merged company could be left without vital leadership. Of course, geography, lender agreement and similarities and differences in customer base are also factors to consider.

Train Wrecks
One of the biggest factors in failed mergers is egotism of a board member or managers. Egos are roadblocks to sound, open discussions among leadership teams. One method I use to assess personalities is the DISC personality profile. The results from this assessment outline an individual’s communication style. This knowledge can be extremely advantageous. In many cases, the one or two members who attempt to drive the merger bring the mindset of “me,” which does not allow for a successful team culture. Specifically, a successful merger cannot focus on the needs of one or two individuals, but rather must focus on success of the entire team as a whole.

Another significant challenge to overcome is merging different work cultures. Work culture is extremely important not only to productivity but to profits as well. This is not a detail to skip. Think through the type of work culture needed for the new business as well as ways to foster it inside the merged environment. Without a positive, productive culture, the new business may not be able to retain people key to continued success and future sustainability.

Next, direct and open communication must dictate all stages of the merger before, during and after completion. Particularly in today’s world of social media, rumors or exaggerations can quickly undermine a productive merger. Additionally, open communication will enhance a positive work culture.

Finally, reducing board size is a tough and sensitive task. This often requires individual board members to value the interests of the overall team above their own. Allow enough time to conduct this process thoroughly and openly. Remember that it takes 25 percent more time, money and effort than projected to complete a successful business merger. If businesses fail to include these extra allowances in their calculations, any potentially successful merger could be derailed.

In summary, an economic reset offers significant opportunity along with challenges. In some cases, considering a merger may be a positive option. As with any business opportunity, dedicate the necessary resources to accurately assess the potential. Then, examine the methods employed in thriving and failed mergers to increase your probability of a successful business merger and beyond.