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Learning from Mergers - the case studies

Voluntary Action
Within Kent
KENT

In January 2008, two infrastructure organisations in Kent,


Voluntary Action West Kent (VA West Kent) and Sevenoaks
Volunteer Development Agency (SVDA) successfully merged.
VA West Kent was a generic infrastructure support provider (a
Council for Voluntary Service) for the voluntary and community
SVDA chief officer
January 2007 sector in West Kent. SVDA ran volunteer centres in Sevenoaks
Following close
works with board to and Edenbridge, and delivered volunteer related projects
secure support for working, chief
merger officers propose across Kent.
merger to boards

April 2007
Working group and The two organisations had collaborated for a number of years; for example
Majority of trustees
external consultant
in support of
they had worked on joint funding bids, projects, shared training and staff
conduct feasibility
merger secondments. Both chief officers had enjoyed a good working relationship,
study and speak with
stakeholders and knew each others’ organisation well. Importantly, they shared the vision
of bringing together generic and volunteering support services.
Due diligence and
detailed negotiation
August 2007 Since this initial merger, the new organisation has merged with one and taken
between both
organisations take Boards of trustees over two additional local charities. It has now changed its name to Voluntary
place agree to merge in
principle
Action Within Kent to reflect the wider geographical area of delivery and the
broader range of services and activities it provides.
October 2007
Integration
period: TUPE, Memberships agree
staff social merger resolution
Interim board oversee merger and

events and
Motivations for merger
presentation
governance review

days. New Both organisations were strong “It wasn’t a shot-gun merger. Both
systems financially and from this perspective, sides wanted to merge to achieve
considered
neither felt it was imperative to something bigger… a platform to
January 2008 merge. However, they felt that do things on a wider geographic
Merger date merger would lead to more efficient area”
Post-merger Governance review delivery of services to the voluntary
Trustee, VAWK
phase sector, particularly given an overlap
Merger with VSU
Youth Action of their service users. Merger was also seen by both organisations as a way
Organisational to develop their service offer and improve their long-term sustainability.
review
For SVDA, merger also offered the possibility of a wider geographical reach
and the development of extended services. For VA West Kent, a merger with
SVDA in particular allowed them to work with the “experts” in volunteering;
a service they wanted to offer at their base in Tunbridge Wells.
Learning from Mergers - the case studies
Page 2 Voluntary Action Within Kent

The Merger Process

The merger took 12 months from start to finish. The idea of merging
came from the chief officers of VA West Kent and SVDA as a result of
their close working relationship. Their participation in national forums
for voluntary sector issues had familiarised them with the trend towards
merger between infrastructure support organisations and what could be
gained through merger. Both organisations had accessed Capacitybuilders
funding in the past as part of work to map the local sector and identify
merger opportunities between various different organisations. As part
of this, SVDA in particular had considered merging with other, similar
volunteering organisations but concluded that a merger with VA West Kent
would be most beneficial.

The chief officers took the proposition of merger to their respective boards
of trustees. Whilst VA West Kent’s board was already supportive, trustees
of SVDA had some worries about the loss of local presence. Their chief
officer worked with them to understand and address these concerns until
all but two trustees across the two organisations gave their initial support
to the merger.

Funding from the Lloyds TSB Foundation was secured and used to support
merger costs. In particular, the funding made it possible to do a detailed
feasibility study into merger between VA West Kent and SVDA. A working
group, comprising the two chief officers and two trustees from each
organisation was set up, and a consultant was brought in to investigate
attitudes of frontline organisations, trustees, staff and volunteers to
the proposed changes. Comments and views from these stakeholders
“We already knew each were then fed into the merger negotiations and process. This external
others’ organisations inside consultation was combined with internal consultation with staff in both
out, and the due diligence organisations.
exercise was an important
part of the merger process” A move to ‘merge in principle’ was agreed by both boards of trustees, and
DEPUTY CHIEF Executive, VAWK
the formal due diligence process began.

Once satisfied with the outcome of due diligence, the final decision on
merger went to each organisation’s membership at an AGM and an EGM
in October 2007. Both sets of membership voted in support of the merger,
which was proposed to take place in January 2008.

The three months between the decision to merge being taken and the
merger taking place were used to begin integration. The TUPE process
began, which ensured employees of the two organisations did not lose out
on their employment terms and conditions. A number of joint staff events
were held and new joint systems were developed. An interim board,
consisting of five trustees from each organisation was formed to oversee
the first twelve months of the merger.

No redundancies were made during the merger. However, a decision not


to fill vacancies as staff left has resulted in a streamlined and efficient staff
team which is more in line with the structure of the new organisation.

VAWK has subsequently carried out a review to adopt a model of


governance best suited to the newly merged organisation.
Learning from Mergers - the case studies
Page 3 Voluntary Action Within Kent

Success factors for the merger

Stakeholders thought the compatibility of the two organisations was a


crucial success factor for the merger. They shared a similar vision for third
sector support that did not separate generic and volunteer support, and
both saw the same potential for synergies between their organisations.
“Right at the beginning we Additionally, both were financially strong and in many cases were funded
had decided we wouldn’t be by the same bodies.
going for the same job. There
was a sense of trust and Ultimately, the impetus for the merger came from the chief officers, who
respect at senior level” were committed to the need to modernise and enable their work to be
more efficient and effective. Furthermore, a close relationship allowed the
Deputy Chief Executive, VAWK
chief officers to broach the potentially difficult question of who would lead
the new organisation. They decided not to compete for the role, making
the decision jointly about who would take on the chief officer role and who
“I think VAWK were very would be their deputy.
upfront and although some
people were nervous, they Internal stakeholders of each organisation found that a commitment to
understood why the merger open communication between chief officers and staff, and at trustee level
was taking place” was a further success factor. All groups were kept informed and involved
Staff Member, VAWK in decision-making.

The funding from Lloyds TSB Foundation that had been accessed early in
the merger process was also used to fund a staff integration programme,
once merger had been agreed. Having access to this funding allowed
engagement with staff to be thorough and effective, and improved the
staff experience of merger. The negative impact of the merger on staff was
small because the intention was not to achieve cost savings, rather it was
about improving services and sustainability.

Benefits of merger

Since merging, the organisation has increased in size and reach, primarily
through further collaborations in 2009. VAWK now has a ‘critical mass’ that
allows it to grow its services, whilst also being able to offer specialist advice.
The diversification of activities, including a mixture of both earned and
grant income, allows the organisation more control over its development.

VAWK now operates from a number of sites. There is a central office in


Tunbridge Wells that houses IT, marketing, finance and a volunteer centre,
whilst a number of projects run out of satellite offices. These vary from
the large premises in Sevenoaks to single officers based with partner
organisations in areas such as Folkestone, or the mobile services provided
in Edenbridge. This allows the organisation to retain a responsive local
presence, whilst also benefiting from central co-ordination.
“We are more attractive to
funders, more robust, more Although they did not actively encourage the merger, public sector
substantive. We are hoping representatives have been impressed by the new organisation. It is seen to
that we will be well placed to set a good example to the wider support sector which has generally been
meet the Big Society vision” reluctant to pursue merger. The organisation has earned respect and is
Chief Executive, VAWK viewed as a credible partner for the public sector.
Learning from Mergers - the case studies
Page 4 Voluntary Action Within Kent

Working conditions for all staff have improved, partly as a result of the
TUPE process which brought a pension scheme from VA West Kent’s terms
and conditions and a more generous annual leave allowance from SVDA.
Bringing together senior managers has reduced the isolation felt by some
staff members in the smaller organisations.

The bigger organisation offers staff more opportunities for career


development. For example, one existing staff member has developed and
utilised previous knowledge of equalities in a new and evolving role as
Disability Manager. Similarly, a broader training programme for staff has
been developed, and overall retention has improved.

Challenges

Change management, particularly in handling staff concerns sensitively, is


a significant challenge in all mergers. A staff integration programme was
run, which included a social event and a workshop for both staff teams
and a final presentation event for both staff and trustees. This encouraged
the two teams to get to know each other, to gain a better understanding
of each organisation and to share ideas about how the new organisation
could work.

“The staff presentation day Concerns about loss of local presence in the case of SVDA presented a
was brilliant. It enabled challenge. In particular, trustees of SVDA were unlikely to support the
people to look at how they merger until they felt this concern was addressed. However, even once
might do things differently the trustees had given their initial support to investigating merger,
and work together. Everyone negotiations between the two organisations were often focused around
seemed to think that was this issue. For example, trustees were clear that the merged organisation
useful. And they explained should have volunteer development as a core purpose of the organisation,
TUPE!” thus retaining a key facet of SVDA’s work.
Staff Member, VAWK
The governance review that followed the merger threw some potentially
challenging situations to the new organisation. The SVDA board of trustees
had previously had a more operational role than many boards, for example
the treasurer rather than an officer was responsible for the organisation’s
finances. Becoming the strategic board of the new organisation therefore
presented a big change. There was a risk in this process that it if it wasn’t
handled sensitively, it could leave trustees feeling under-valued. From the
beginning of the merger, the chief officers had been open about the desire
to reform the board and this required considerable diplomacy.

A remaining challenge for VAWK is the external perception from some local
bodies that VAWK is a predatory organisation, following further mergers.
However, staff are confident that these additional mergers were the right
thing for their organisation and all those involved.
Learning from Mergers - the case studies
Page 5 Voluntary Action Within Kent
Lessons Learned
• Since the first merger, which took 12 months from start to finish, subsequent mergers have taken as little as
six months to complete. VAWK recommends keeping merger “short and sweet”.
• VAWK saved money by doing work in-house, but items such as branding and new systems were seen as
necessary expenses. VAWK was able to access £40,000 of support money from Lloyds TSB Foundation
which contributed towards the cost of the merger and particularly the cost of the important staff integration
programme.
• Open and transparent communication with stakeholders was key to helping all understand why the merger
was taking place and what it meant for them. This allowed stakeholders to be “brought along” with the
merger plans. Although this can be challenging, VAWK suggests that focusing on the needs of beneficiaries
enables all stakeholders to better understand the rationale for merger.
• It is important not to underestimate the challenges faced by a larger organisation. Particularly in terms of
integrating finance and ICT systems which are crucial to the smooth running of any organisation.
• The crucial role played by all staff, and the imperative to manage change in a timely, sensitive way.

For further information about this case study, please contact:

Mandy Wynne, Deputy Chief Officer, Voluntary Action Within Kent


01892 530330 info@vawk.org.uk

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