All is Not Lost When a Merger Fails: How Collaborative Learning Can Make Organizations Smarter, Stronger, and Better Positioned for Scale. Q&A with Andrew Wolk and Wendy Yallowitz
Andrew Wolk is founder of Root Cause and Wendy Yallowitz is a program officer with the Robert Wood Johnson Foundation’s Vulnerable Populations portfolio (RWJF), which supports social innovations with promising potential to grow to scale. For almost two years, Root Cause helped to guide RWJF grantee More Than Wheels through a facilitated merger exploration with Ways to Work, as both organizations had similar goals of using the purchase of an affordable, fuel-efficient car as a mechanism to help low-income clients get on the path toward financial stability and improved health and well-being. Ultimately, the merger never materialized. From this process, however, derived a framework for "collaborative learning," which allowed both organizations to learn from each other’s models and emerge with stronger, smarter strategies than they would have on their own. The lessons learned are available in "Collaborative Learning: A Case Study on More Than Wheels and Ways to Work," which is available online and as a printed copy at the Independent Sector bookstore. In this interview, Andrew and Wendy shed light on how collaborative learning made a failed merger exploration a success.
Transparency Talk (TT): What is collaborative learning, and what are its origins?
Andrew Wolk (AW): It’s an intentional effort between two organizations to exchange, analyze, and apply knowledge that will lead to better outcomes. More specifically, collaborative learning is a structured, facilitated learning process that allows for in-depth knowledge exchange without the organizational and cultural challenges of mergers. Based on a four-step framework, the process can serve as an alternative to merger discussions - or a "plan B" in the middle of merger talks that aren’t working out.
Wendy Yallowitz (WY): It’s a good time for this type of framework. When you consider how nonprofits continue to grow in number and are continually asked to do more with less, it’s more common for foundations to encourage similar organizations to figure out if there’s a way to optimize resources. Hence, we’re seeing more merger explorations like the one we pursued with More Than Wheels and Ways to Work.
(AW): As for origins, this potential merger brought about the framework. We know from past experience merger talks can present huge barriers, and we were running into some of those things. At a certain point, we decided to take an approach whereby we lifted the pressure of mergers or formal collaborations and partnerships as expectations so that the two organizations could work together to solve problems and grapple with strategic questions.
TT: What are the benefits of collaborative learning?
(AW): Collaborative learning can accelerate knowledge very quickly in a resource-efficient way, provided both organizations are mutually investing in sharing and learning. We built the framework around four phases, starting with an assessment of need, wherein you ask whether it would be beneficial to look inside another organization to address your own challenges. You have to be willing to look inward at your own gaps in knowledge and share information. So right off the bat, entering this phase pushes you to evolve in some way.
From there you move to establishing trust and facilitation by a neutral third party, which entails conversations, adherence to a collaborative learning scope of work, and relying on a facilitator to help set and make progress against goals. Next is an in-depth exchange and analysis of knowledge — in the case of More Than Wheels and Ways to Work, this involved an immersive exchange of client profiles, program and financial models, and how success is measured. Last up is application of knowledge to challenges faced, which involves applying what you learned to the challenges that originally brought you to the table, and perhaps other areas.
WY: What ended up being really key was facilitation of the learning. If you really want it to work and be more than just an information-gathering exercise, you need a facilitator. Root Cause was able to pull out themes and lessons by asking, "What did we learn from this?" They ensured ideas and opportunities would be carried out.
Collaborative learning contributed to a 40% reduction in per-client costs for More Than Wheels, which makes cars available to the working poor.
TT: How does collaborative learning relate to scaling?
WY: This is about scaling impact collaboratively, working with a similar organization that also wants to grow beyond its challenges. For example, as a result of these conversations, Terri [Steingrebe, CEO of More Than Wheels] was able to look at her strategy and see more than one way to scale More Than Wheels. Their initial model was to open physical offices where they saw a need, and that’s evolved after assessing Ways to Work’s affiliate model. Through a new partnership-based model, More Than Wheels can increase the number of people they serve without needing to establish a new client base in new communities or set up new offices. All in all, they expect to lower per-client costs by 40 percent.
Likewise, Ways to Work gained appreciation for More Than Wheels’ one-on-one consumer counseling and financial education, and went on to establish an online financial education course for clients, set higher expectations for financial fitness and education before loan approval, and - based on More Than Wheels’ success - increase loan amounts beyond original estimates.
TT: Why should funders consider supporting their grantees to participate in collaborative learning?
WY: RWJF has worked to connect grantees to talk about opportunities to work together, but collaborative learning adds a layer of purpose, with goals and outcomes at the helm. So, at the end of the day, we see this as a long-term, cost-effective way to build capacity among those grantees for whom this is an appropriate option. And funding the process, of course, contributes greatly to providing initial resources needed to explore a merger and engage in collaborative learning.
A by-product of this process was building trust with our grantee. I encouraged Terri to have the conversation, but did not push her to merge - that was never a rigid expectation. She never felt awkward coming to me with honest feedback. This helped me gain a real appreciation for the collaborative learning process, which was meaningful.
AW: What we’re seeing is more organizations want to learn from each other. We believe there’s a fundamental culture beginning to build around performance for impact. The nonprofit sector should be having these conversations because, in the end, it’s about whether there’s impact.
TT: Thanks for sharing this case study with Transparency Talk. Potential mergers and collaborations are often shrouded in secrecy. And the same is true of failed foundation experiments. Why do you think it’s important to bring these efforts to light?
WY: I can speak from the experience of RWJF — I think we’ve long been committed to sharing results of our work with the field, whether those results represented success or failure. We release grantee results reports and evaluation findings as a matter of routine, but I agree that process results such as those stemming from merger and collaboration attempts often are not approached with the same spirit of transparency. As we and the two organizations went through this exploration, such rich learnings were emerging from the deep exchange of information about the models we were looking to merge, including important signals that a merger might not be the right fit for either group. That wasn’t seen as a loss or a wasted effort; rather, it opened our eyes to new possibilities for each group to refine its models and growth strategies that we hope will succeed. It’s important to share those outcomes widely in hopes that they are of value to other funders and nonprofits wrestling with the various routes they may pursue to grow to scale.
-- Andrew Wolk & Wendy Yallowitz