Mergers: One Way to Survive Pandemic?

Dave Kilby

These pandemic times have resulted in all of us having to make difficult decisions in our business and personal lives.

Chambers have not been exempt from this new reality. While some are doing “surprisingly well,” many are “doing OK and holding on” and others, unfortunately, are “in deep trouble.”

For chambers facing a bleak future, and maybe others, too, the possibility of a merger with another chamber or organization may provide a much-needed lifeline.

Yes—this is a difficult conversation and will present operational and personality challenges that will need to be addressed, but I truly believe that in many cases the sum may end up being far greater than its individual parts.

Another, and maybe the most important, aspect of a merger is—it could very well be the absolute best thing for your members and community.

Points to Consider

With his permission, I’d like to quote key points made by Jerry Jacobs of Pillsbury Winthrop Shaw Pittman LLP from a recent article that he wrote for the American Society of Association Executives (ASAE) on this topic. NOTE: I’ve taken the liberty to add (chambers) in key places:

“Revenue is down dramatically in virtually all associations (chambers). Many can weather a considerable down period by operating more frugally and tapping into reserves, which, after all, are intended for just this purpose. But some cannot. Many depend on net revenue from in-person events to make up much of their annual budget. With that revenue gone, and no guaranteed date for its return, survival might be tricky.

“One solution that might be worth considering is a merger.

“Certainly, there are daunting obstacles to association (chamber) mergers. Associations, like most human communities, are tribal; unique affinities pervade each one, engendering loyalty but also isolation. By far the greatest obstacle to association (chamber) mergers is the inertia of years or decades of looking inward before outward, of a we/you attitude toward other associations (organizations).

“In scores of association mergers before COVID-19, the clash of cultures was far less than had been feared. Within a few months, the differing cultures quietly became one.

“Creativity and flexibility are required to carefully maintain the best of each association (chamber) so the two can be ‘better together,’ a favorite merger slogan.

“A COVID-driven merger, by definition, likely involves associations (chambers) of different strengths, perhaps even a ‘white knight’ stronger association (chamber) ‘saving’ a weaker one. This necessarily requires that the stronger association not overplay its dominance, while the weaker association must be realistic and not seek more from the deal than is fair or achievable.

“It often requires something special to incentivize the discussions and hard work involved in pulling off a successful merger. COVID-19, for all of its horrors, might be that incentive…one pathway to survival and prosperity.”

Next Move

Since late March or early April, hardly a week goes by that I don’t receive questions about or hear about chambers having merger discussions.

Think about it. A merger might be the next and best move for your chamber and your members.

Dave Kilby is president and CEO of W.A.C.E. and executive vice president of corporate affairs at the California Chamber.