Mergers Part 2: From Study to Decision: Navigating the Go/No Go Process

After completing the feasibility study, the next step in a merger process is navigating the Go/No Go decision. This decision rests solely with the boards involved, shaping the fate of the potential amalgamation. Here’s a breakdown of the key factors and considerations boards should weigh during this phase: 

1 . Financial Viability: 

Financial viability is a cornerstone of any merger. It's crucial for the two boards to take the feasibility study analysis and consider it in practical terms, assessing whether the combined organization can absorb the increased wage costs resulting from role harmonization. Boards should consider whether there are any redundancies, particularly in back-office functions, and decide whether disruptions can be managed with sensitivity. Moreover, analyzing financial viability also includes exploring potential revenue opportunities to support additional costs. Ultimately, a merger must be financial sustainable.  

2. Strategic Opportunities: 

Beyond mere cost-saving measures, the Go/No Go process should entail exploring strategic opportunities for maximizing the benefits of a merger. This involves assessing whether there are new avenues for revenue, service offerings or capacity building that arise from the merger. Both boards need to be willing to explore synergies.  

3. Board Compatibility: 

Board compatibility is crucial for merger success. The boards of both organizations should establish if they can work collaboratively and harmoniously together. As part of this process, the boards should decide if there are potential conflicts or differences in governance styles (e.g., risk tolerance level, stakeholder management, financial practices) that need to be addressed. The boards need to align on governance structure and board composition.  

It’s also paramount that merging boards actively align their fiscal philosophies. During the Go/No Go process, boards must discuss and align on their approaches to budget management, spending priorities, and financial risk tolerance. Understanding each other's fiscal philosophies will help navigate potential conflicts and ensure financial stability post-merger. Importantly, they should ask themselves if there is a willingness to invest in conflict resolution, if necessary.  

4. Leadership Selection Process: 

It’s crucial that the multiple boards can agree on a fair and objective process for selecting a single leader. The most successful leadership selections often involve a balance between structured, rigorous, and objective decision-making processes and employing tools and tactics to assess leadership abilities, behaviors, and cultural fit. Boards should ask themselves: are we ready to address any conflicts that may arise to ensure a smooth leadership transition? 

Throughout the decision-making process, boards should engage in open dialogue to assess alignment and compatibility. By addressing these key considerations, boards can make informed decisions during the Go/No Go process, setting the stage for successful merger execution. 

Want to work together?  

Sense and Nous is a trusted consultant for navigating the intricate world of mergers, creating safe spaces for open dialogue and tackling organizational frictions head-on in a supportive and constructive manner.  Through our experience, coupled with project-based know-how, we understand the intricacies of completing projects successfully, from mergers or legal matters to human resources, technology, quality improvement, and strategic management.  

If you’d like to learn more about our experiences with mergers and amalgamations, contact us at info@sensenous.ca