Mergers


  • Lodestar Gets Nearly 700 Nominations for $250K Collaboration Prize

    The Lodestar Foundation has received 600 to 700 nominations for its first annual $250,000 collaboration prize. Today is the deadline, and I just got off the phone with Lois Savage, the foundation’s president. Lois tells me that the impetus for the prize is the lack of models for collaboration among non-profits. The prize process creates the opportunity to gather information about effective collaborative practice models that academics and non-profit practitioners can study.  


     


    Too often in the non-profit sector, funders try to drive collaboration by forcing organizations with similar objectives and interests to work together. Lois calls them “shotgun weddings.” These usually fail. Similarly, successful collaboration in the for-profit workplace requires more than tools and an edict to collaborate.


     


    The Collaboration Prize recognizes collaboration among two or more nonprofit organizations that would otherwise provide the same or similar services and compete for money, clients and staff. The Lodestar Foundation, created by real estate developer Jerry Hirsch of Phoenix, focuses on process and structure of non-profits rather than on specific philanthropic activities. Lodestar’s guiding principle is encouraging non-profits to use efficient business practices. Collaboration fits into that framework by maximizing resources and reducing competition among organizations tackling similar issues. Lodestar has funded cooperative ventures and new organizational structures including coalitions and mergers.


     


    Here’s how the prize selection process works: La Piana Associates of Emeryville, California, a management consulting firm for non-profits, will review submissions for eligibility. AIM, the Arizona-Indiana-Michigan Alliance, will review nominations and select eight semi-finalists. AIM is a consortium that includes The Lodestar Center for Philanthropy and Nonprofit Innovation at Arizona State University, the Center on Philanthropy at Indiana University, and the Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University in Michigan. Sterling Speirn, president and CEO of the W.K. Kellogg Foundation, will chair a panel that will choose the recipients from among the finalists.


     


    The Lodestar Foundation is one of a growing number of foundations that are embracing collaboration. In July of 2006, the Bill and Melinda Gates Foundation announced 16 grants totaling $287 million to fund an international network of highly- collaborative research consortia focused on developing an HIV vaccine. In The Culture of Collaboration book, I write about the Myelin Repair Foundation’s collaborative research model. The model creates incentives for data sharing and collaboration among scientists at different universities working on treatments for multiple sclerosis.


     


    While the non-profit sector has focused recently on adopting efficient business practices, the for-profit sector may also look to non-profits for guidance. There is certainly room for knowledge transfer among both sectors to share successful collaboration models.



  • Collaboration Issues at DaimlerChrysler?

    When mergers sour, many factors play a role. In The Culture of Collaboration book, I describe how anticipating, acknowledging and addressing cultural differences are key success factors in mergers. I also discuss how collaboration can bridge cultures, break down barriers and reduce the impact of silos. Against this backdrop, the book covers what went right with Procter & Gamble and Gillette and what went wrong with AOL and Time Warner.

    Now DaimlerChrysler seeks a buyer for Chrysler, and the bids are a fraction of the $36 billion Daimler-Benz paid for Chrysler nine years ago. This merger was clearly a disaster. What went wrong? Tuesday National Public Radio broadcast an excellent story by Frank Langfitt on its flagship newscast, All Things Considered. You can listen to the story here.

    In a nutshell, Langfitt reports that the companies had almost nothing in common. Barriers included language and culture. Daimler was a German company known for luxury brands and Chrysler was a scrappy, price-conscious Detroit carmaker that nearly went bankrupt in the 1980’s. Mercedes engineers had limited interest in the cost-per-unit of components and resisted sharing parts for use in Chrysler-branded vehicles for fear of diluting brand value. In contrast, Ford Motor Company—as I describe in the book—shares parts across Volvo, Ford Europe and Mazda.

    DaimlerChrysler uses collaborative tools, both real-time and asynchronous. The company has standardized on the IBM Lotus suite including Sametime instant messaging. Nevertheless, collaboration has been inadequate to break down barriers and ensure a successful merger. Why? It takes more than collaborative tools to collaborate! As I point out in the book, tools extend and enhance—rather than create—collaborative culture.