Sometime between the summer and winter of 2012 a few of us were presented with a new and mandatory challenge – a challenge that could readily overwhelm even the best of college and university leaders. “Merge your institution with another… do so successfully… and do so quickly,” we were told, with the additional admonition that “By the way, we have never done this before...” Such was the test of what was to eventually become the grand transformation we now call the ‘Georgia Experiment’. An effort that is the first (and to date only) large system-wide planned wave of mergers in a public four-year higher education system.
For those of us tasked with completing this seemingly Herculean task, there were no ready roadmaps available. And yet we were not the first. Many others had successfully led mergers of higher education institutions, from system-wide mergers of technical and two-year colleges, to mergers of health science universities and nearby colleges and universities, to mergers of single-discipline colleges, such as law and business, with more comprehensive institutions. The experience was a global one with many countries, including China, the Scandinavian nations, Australia, and South Africa, undertaking large scale systematic mergers. Still, no blueprint existed, no ‘how-to’ manual, no set of instructions on what to do and what to avoid, or where the pitfalls might be and what the results could be, in the management of the notably complex and sensitive process of merging two or more separate colleges or universities.
When dealing with mergers many leaders and governing boards operate under a number of misconceptions. Firstly, that mergers should only be considered by institutions in extreme need – on their deathbed if you would. Secondly, that mergers are the one strategic option that ‘Must-Not-Be-Named.’ Thirdly, that mergers are always about one institution being acquired and the loss of their identity and history. And fourthly, that their merger, if one was to be considered, is unique and special, with little to learn from other mergers or merger leaders.
These assertions are simply and categorically… wrong. Let’s take a closer look.
Mergers are solely for failing institutions. In fact, as our prior data noted, and the recent analysis by Witt and Coyne reaffirmed (Witt R, Coyne KP. A Merger Won’t Save Your College. Chronicle Higher Education, September 22, 2019; https://www.chronicle.com/article/A-Merger-Won-t-Save-Your/247194), institutions that wait too long, when their financial, political, enrollment and branding value has dwindled or simply expired, will simply not be able to find a suitable merger partner. A debt-ridden institution, with few students and less brand value is not an attractive merging partner. If liabilities are not excessive, there is some hope that they could become land transactions, but little else. The lesson here is that the governing boards and executive leaders of institutions, particularly those that are smaller and more vulnerable, should not wait until they are in extremis to begin to consider a merger. They should do so well in advance, when they are still healthy and have much value to offer. But to do so requires governing boards and leaders to embrace their generative roles and pursue rigorous strategic and future scenario planning.
Mergers are the proverbial ‘third rail’ of strategic options. In fact, higher education leaders should understand that mergers are just one additional, if potentially powerful, tool in the toolbox of strategic tactics. While some leaders may believe that considering a merger implies their failure to find a path to an institution’s survival, the reality is that their unwillingness to consider all options, including a merger, within a robust strategic and scenario planning process is the greater failure. Mergers are not the solution to all of an institution’s problems. And neither are they the tactic that cannot be considered. In fact, the most common failure we have observed in mergers is – simply put – the failure to even consider or thoroughly evaluate the option.
Mergers are about being acquired and losing identity, brand, and history. In fact, there are mergers of relative equals aimed at creating a more competitive entity that can provide better quality, more comprehensive, and more sustainable programs. Mergers may imply the consolidation of a stronger institution with a smaller institution but, even in those cases, the differing strengths often help create a stronger entity. Some may have the healthier P&L statements and larger endowment, while the other has more students and greater political capital. Or one may have more graduate programs, while the other has better branding through athletics. Provided the merger is explored early enough to ensure that each institution is able to bring value to the table, there is a stronger likelihood of preserving a modicum of history, brand, and programming. These lessons, like many others that while sounding like common sense, are actually distilled from the extensive study of many mergers.
My merger situation is absolutely unique. We must remember that many health care providers and hospitals discovered over thirty years ago that, while each doctor-patient interaction is special and unique, underlying data identified common principles that led to the development of common processes, procedures, and measures. All to the benefit of the institutions and their patients. Mergers are no different. While each merger is special and unique, our study of over one-hundred mergers, interviews with over thirty leaders having been involved in a merger, and a thorough review of the literature revealed important underlying principles. For example, we were able to identify seven essential elements of merger success (i.e. a committed governing board, the right leadership, a compelling vision, the right degree of urgency, a robust communication plan, an experienced project management system, and the availability of needed resources) without which mergers are likely to fail.
The number of documented mergers and closings have been steadily increasing over the last several years. As the fiscal, competitive, enrollment, and branding pressures increase for the vast majority of colleges and universities, the number will likely continue to rise. Strategic Mergers in Higher Education provides important information and perspective for all higher education leaders, including governing boards, chief executives, and their leadership teams. Leaders who need to be proactively and positively exploring all tactics that will allow their institutions to succeed in the future – options that should include mergers.
Ricardo Azziz is a research professor at the University at Albany, State University of New York, and the chief officer of academic health and hospital affairs for the SUNY System Administration. He led the merger that created Georgia Regents University (now Augusta University), serving as its founding president. Guilbert C. Hentschke is the Richard T. Cooper and Mary Catherine Cooper Chair Emeritus at the University of Southern California's Rossier School of Education, where he served as dean from 1988 to 2000. Lloyd A. Jacobs is President Emeritus of the University of Toledo, where he led the merger of UT with the Medical College of Ohio. Bonita C. Jacobs led the merger of Gainesville State College and North Georgia College & State University to form the University of North Georgia, where she serves as the founding president. Together, they are the authors of Strategic Mergers in Higher Education.