Managing the Core Risks Identified (An extract from the Age Concern England – Help the Aged Working Group Report that was presented to the Age Concern England Board Meeting on 12 March 2008 and to the Help the Aged Board Meeting on 20 March 2008.) Risk Risk and Consequence Mitigation No. 1 Governance and operational Clarity on charitable objectives, vision, and mission, and the effective framework – the founding charities fail development of new structures (or changes to existing structures), to to plan for, and establish, a new provide the legal and governance vehicles needed to deliver them. organisation which can deliver the vision Development and delivery of a corporate strategy and plan for the new set out by the two founding charities. organisation confirming priorities, outcomes and outputs, and timescales for the charitable and commercial activities. Internal and external communication strategies agreed and implemented. Identification and allocation of resources needed to achieve the new organisation’s vision/mission and to deliver the corporate strategy. Agreement of the processes/mechanisms needed to effect the merger, including: agreeing a work plan; development of a people strategy; partner and stakeholder consultation process; agreement of Terms of Engagement; establishing the Transitional Committee, the Nominations Committee and the Programme Management structure. Agreement of post-merger processes/mechanisms to ensure the new charity achieves its purpose, including through developing an organisational design to deliver on the functions required, including business development, scrutiny, strategy, cross-functional working, knowledge management and effective data management. AmalgaMate – A toolkit of ideas and practice for mergers in the third sector Based on the merger to form Age NI, developed by CO3, funded by Atlantic Philanthropies 2 Continuity and change – the new organisation fails to achieve the right balance between continuity with the existing organisations and their work programmes, and realisation of the new vision. 3 Partners – the new organisation fails to achieve the balance between securing buy-in from existing partners and having the freedom to realise its vision, and in particular the freedom to select, evaluate and review the partners who are most fit for purpose. Review carried out of all existing charitable and commercial activities of the two organisations. The review will make firm recommendations about continuing, phasing out or discontinuing current activities. The recommendations will be driven by the requirements of the agreed corporate strategy and associated corporate plan. Assessment of new activities that will be needed to deliver corporate strategy and associated corporate plan. Creation of management teams to deliver current activities, develop/deliver new activities, and implement the transition from the two current organisations to the new charity. Confirmation of human resources and skills required to deliver the corporate strategy/plan and a transition programme agreed to ensure the right people, with the right skills, are in the right roles in the new organisation. Communication of vision/mission is to all current partners and consultation about the role of partnerships in the new organisation are carried out. Review of contractual commitments with existing partners and confirmation about future arrangements. Confirmation of the operational model for each type of partnership and the threshold number of partnerships needed to achieve a viable and sustainable new organisation. Establish partner specification for different types of partnership, in order to create transparency about the organisation’s requirements and to enable partner selection. Proactive signing-up of partners to the most appropriate partnership model. Discussions with the three new sister organisations in Northern Ireland, Scotland and Wales and confirmation of the relationship with the new charity. AmalgaMate – A toolkit of ideas and practice for mergers in the third sector Based on the merger to form Age NI, developed by CO3, funded by Atlantic Philanthropies 4 5 Brands – failure to decide on an overall brand strategy, including planning and managing the future of the brands, leading to a loss of confidence, including among charitable and commercial partners. In addition, failure to develop/deliver a brand strategy would lead to a loss of income from fundraising, an increase in confusion among our audiences about the brands, reputational damage, and a failure to capitalise on the opportunity to build on/improve on the current position. Transition – failure to manage the process of transition from the two organisations to the new charity effectively, leading to a failure to transfer the value in the two existing organisations. 6 Due diligence – the due diligence process reveals issues about one or both organisations that present an insuperable obstacle to the merger. Agreeing a brand strategy for the new organisation and a costed plan for its phased implementation. Ensuring control and management of the current brands both within and outwith the context of new partnership agreements. Communication strategy to raise awareness and understanding by charitable and commercial partners and other audiences of the new charity and its brand strategy. Monitoring, review and evaluation process implemented to measure the impact of the brand strategy for the charitable and commercial activities of the new organisation. Clarity of purpose, timely development and delivery of corporate strategy and plan confirming priorities, outcomes and outputs, and timescales for the charitable and commercial activities. Internal and external communication strategies agreed and implemented. Identification and allocation of resources needed to achieve the new organisation’s vision/mission and to deliver the corporate strategy. Effective management of the merger, as detailed under Risk 1 above. Agreed terms of reference and brief for the due diligence process, the brief to include agreement on the role of external consultants. Ensure resources available to commission and fully support the process. Agreed process for handling and evaluating the outcomes/outputs from the due diligence exercise. AmalgaMate – A toolkit of ideas and practice for mergers in the third sector Based on the merger to form Age NI, developed by CO3, funded by Atlantic Philanthropies 7 Costs and resources – insufficient resources available to effect the merger, including: a) the work done to develop the planning for the management of the brands concludes that a high level of new investment is a prerequisite for success whereas at the moment, this is not factored into the financials; b) the costs of integrating IT systems to provide the new organisation with the data and the capability that are envisaged, are much higher than currently anticipated; and c) the cost and benefit analysis of the operational model required to deliver the new vision, reveals that the assumptions made at this point are over-optimistic. 8 Growth and resilience – the new organisation fails to improve on the growth in income and impact that could have been achieved by the two organisations separately, and fails to improve on the levels of resilience of the two existing organisations. Comprehensive evaluation of both the costs and resources needed to: Deliver the current charitable and commercial activities that are to be retained at the level/for the period it is intended to maintain them Merge the two organisations, including rationalisation of activities and staffing Deliver the new organisation’s corporate plan/strategy. Comprehensive evaluation of the resources available to the new organisation, including through: Charitable activities and fundraising Commercial income generation. Cost benefit analysis of the activities and their costs needed to deliver the new organisation’s corporate strategy/plan. Budget process to match the new organisation’s projected income with the anticipated costs/resources needed to deliver its corporate strategy/plan. Development of the corporate strategy and plan for the new organisation, as detailed under Risk 1 above. The new organisation’s corporate strategy and plan must confirm how the organisation will achieve growth and resilience, having taken account of the shared knowledge and thinking of the existing organisations, assessed the resources and capacity available to the new organisation, and identified existing and new opportunities and risks. The plan should establish targets and KPIs to allow it to measure and control progress, and should establish monitoring, evaluation and review processes, as well as a robust governance process. Effective management of the merger as detailed under Risk 1 above. Development of an effective organisational design, as detailed under Risk 1 above, specifically a design that enables the organisation to achieve the AmalgaMate – A toolkit of ideas and practice for mergers in the third sector Based on the merger to form Age NI, developed by CO3, funded by Atlantic Philanthropies planned levels of growth and resilience. AmalgaMate – A toolkit of ideas and practice for mergers in the third sector Based on the merger to form Age NI, developed by CO3, funded by Atlantic Philanthropies AmalgaMate – A toolkit of ideas and practice for mergers in the third sector Based on the merger to form Age NI, developed by CO3, funded by Atlantic Philanthropies