Merger advice

 

 

Over the last couple of years there have been an increase in the number of FFAs that have merged in order to stay alive.  CCOFFA would like to offer some free advice based on our observations of some of those mergers:

  • First and foremost: make sure your two agencies have the same “personality” and philosophy in regards to the families, the clients, and the industry.  If the two agencies have distinctly different personalities and styles, the merge is likely to be rocky with lots of foster families leaving to seek an agency that is more like what they are used to.  We’ve seen this happen with a number of merges.
  • The primary idea behind a merge is to be able to lower overhead by having fewer sites and less staff to accomplish the same task while, hopefully, not significantly reducing the services offered to the clients and foster families.  So, some specific issues will need to be addressed:
    • Although it would be nice if this didn’t happen, it does: one agency tends to be stronger than the other and in the months following the merge, the newly merged agency tends to take on the structure and identity of the stronger of the two agencies and the other agency begins to “fade” into the stronger.
    • Where will the newly merged agency be housed?  Length of leases on the various sites might be a determining factor, as well as cost per square foot, its proximity to the families served, etc.
    • Due to client to social worker ratios, you may end up keeping nearly all of the “line” social work staff of both agencies in a merge.  However, the newly merged agency will likely not need nearly as much management as two separate agencies, nor will they likely need as much support staff.  So it might be wisest, before the merge, for the two directors to realistically discuss the strengths and weakness of their administration and support staff to determine who would be the best people to keep during the consolidation.  Also, will you let some of the “line” staff go and replace them with quality people you can no longer use in a managerial position?
    • Speaking of two directors, realistically there can only be one top dog.  In deciding who will be the top boss, understand that most staff will have their loyalties tied to their original boss.  This can create some rocky times during the transitions.  Being a newly merged agency, the last thing you need is an us-versus-them mentality within your ranks.
    • Which agency’s policies and procedures, as well as health plans, will be adopted for the merged agency?
    • What will the name of the agency be?  Name changes equal identity changes, so if two merge, but take on the name of just one of the agencies, that becomes a declaration to staff and families which agency “won” in the merge.  A new name, be it a combination of the two prior names, or a new name altogether, will be another identity transition for staff and families.  It is obviously best if virtually everyone is on board with the decision.
    • You have to work out the merge, and all the business name changes, insurance changes, lease changes prior to the merge.  You also need to work closely with CCL regarding the merge, so they are clear on the name of the agency, the offices that will remain open, who the administrators are for those offices, etc.
  • Change can be scary.  How are you going to inform the staff, families, and clients of the upcoming merge and the changes that will create?  It is best to keep them as informed as possible because if foster parents get nervous, they WILL start looking around for a fallback FFA if they don’t like the change.
  • When you merge agencies, you merge strengths AND weaknesses, including staff, families, and the financial status of the two agencies.  Is one agency willing to take on the debts of the other in a merge?

A successful merge is a possibility, with lots of thought, planning, and wisdom.  In the last few years, CCOFFA has observed more rocky merges than smooth ones.  Just keep in mind that the purpose of a merge is to strengthen both agencies by becoming one, not to weaken the newly merged agency.

 

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