Teaming up for Long-Term Success: Credit Union Mergers from Six Departmental Perspectives

CUNA Councils
December 7, 2006

Winning in team sports is all about how the players come together. Take major league baseball, for example. From their days as kids on the sandlot, athletes practice, dream, and hone their skills. The most talented and dedicated—those who are still playing by the time the World Series rolls around—get to the top of their game only through a team effort. Even the best pitchers can hold the other team scoreless only if eight other players are performing well defensively. The short stop can field with acrobatic wizardry, but he must depend on the skills of the first and second basemen for those exciting double plays. The greatest hitters post big numbers in the box scores by advancing the runners who got on base in front of them.

Bringing together a successful credit union merger takes teamwork as well, but it’s fair to say the stakes are higher and performance must be measured over the longer term. A baseball team is judged by its record for the season, and each spring marks a fresh start. On the other hand, completing merger negotiations, executing the consolidation, and maintaining solid ties with members through the initial transition are just the early signs of whether the merger will succeed over the long term. In baseball terms, we’re not even to the All-Star break yet.

The score that matters is that every merger should add value to members over the life of their relationship with the continuing organization, and every credit union professional has a role in ensuring that end. Each department has specific responsibilities in bringing a merger to a successful conclusion—and in making the most of that new combination in the years to come.

This white paper identifies the critical responsibilities of each major department in the merger process and presents case studies showcasing the roles of individual executives with the continuing credit union in: 1) assessing whether and how to make the prospective merger a good fit, 2) executing the merger for the maximum benefit of members and employees, and 3) making the most of the ongoing organization’s resources for long-term success. The following chart summarizes those roles for each department.

These roles are essential for the long-term retention of new members, the realization of growth potential created by the merger, and the best fit of the merging credit union’s resources into the continuing organization’s operations over the long term. The case studies are presented from different departmental perspectives to showcase the unique nature of each merger, the responsibilities of each department, and a variety of project management approaches. In addition, these examples demonstrate the critical issues that merger teams must consider carefully:

• What brings prospective merger partners together
• How prospective mergers fit—or don’t fit—with a continuing credit union’s strategic goals and a merging credit union’s aim to benefit members
• How the unique circumstances of each merger dictate an individualized approach
• How credit unions make mergers work in terms of different project management approaches
• How organizations set objectives for and evaluate the success of each consolidation during the merger process and for the long term
• How to put the talents, skills, and experiences of executives to best use in the merger effort

Bringing together a successful credit union merger requires a team effort and solid project management. For the long-term benefit of members and the continuing credit union—the ultimate goal of any merger—this team effort must continue long after the official date passes and all technical conversions are completed.

This is the executive summary from a cross-conference white paper entitled “Teaming up for Long-Term Success: Credit Union Mergers from Six Departmental Perspectives” byKaren Bankston. Find the complete white paper www.cunaopsscouncil.org/tools/research.html.