On June 1, 2016, the Berklee College of Music and the Boston Conservatory merged to become one institution with a shared vision focused on global leadership in performing arts education (music, dance, and theater). Before the merger, Berklee was considered a global leader in contemporary music education, both on campus and online; while the Boston Conservatory delivered excellent programs across dance, musical theater, and music. Together, we aspire to transform arts education, empowering artists to fully realize their creative and career potential, while preserving the unique institutional pride that we each bring to the new organization.
Two years later, progress since the merger has been strong. Applications to Conservatory programs have grown by double digits each year. Post-merger integration, particularly in key administrative areas—accounting, finance, treasury, legal, public safety, and facilities—is essentially complete; systems integration is one area still in process. We’ve successfully introduced new programming that plays to the strengths of the combined institution. And financial progress is right on track.
In reflecting on our merger and post-merger integration, we’ve identified several factors critical in our success:
- Have shared interests and vision. In any merger, but especially in higher education, the merger needs to result in “wins” for both institutions. How will the merger help accomplish the respective missions of the institutions that are coming together? Ensure the new vision and mission have broad community buy-in.
- Choose the right advisers. You’ll need expert advice—particularly legal counsel—in any transaction as complicated as a merger, especially as this is a relatively new area for many higher education institutions. Ranging from nondisclosure agreements, to due diligence, to faculty and program assessments, to strategic positioning, to financial analyses, a very large to-do list accompanies any merger—and all of it must be accomplished in the right sequence and in a short amount of time. Getting the right advisers in place early can make the entire process go much more smoothly. By the way, don’t overlook the importance of culture in pre- and post-merger planning.
- Provide decision makers with relevant materials. At the outset of our discussions, we developed “briefing books” for the board members and presidents, to get them up to speed and for reference throughout the long process. This ensures all key decision makers are on the same page as you progress through the intensive merger negotiations. Such binders typically contain strategic plans, financial statements, facilities inventory, personnel information, enrollment information, and the like. Of course, all recipients should sign a nondisclosure agreement. Premature disclosure of sensitive, confidential information can be very damaging.
- Guard against burnout. The merger process is definitely a marathon and not a sprint. It took Berklee and the Boston Conservatory about 18 months to move from the idea of a merger to becoming one entity—plus another year of post-merger integration. Any merger is unsettling and some people will leave, putting even more pressure on the staff members—particularly at the “acquiring” institution—who must handle due diligence and integration tasks on top of their regular jobs. The use of retention agreements, incentive compensation for staff, recognition programs, and paid time off can provide effective support during the long and arduous process.
- Look for early wins. Identify potential early wins from the outset of the process and then deliver. It helps the entire community feel good about the merger. For example, we developed a summer opera program at our campus in Valencia, Spain, which happens to be located next door to one of Europe’s leading opera houses. The very successful program was an example of something neither institution could have done easily on its own. At the same time, be sure to tackle the tough issues right away, especially any deal breakers. Such issues don’t go away, so it’s better to address them as they come up.
- Avoid an “I win, you lose” mindset. It’s natural for the acquiring institution to talk about how much it can do for the smaller or target institution—but, over time, that mindset could lead stakeholders to see the merger only as a one-way street. Instead, consciously and regularly focus on how the merger is fulfilling both institution’s priorities, while enhancing elements of culture and pride. The smaller institution, for example, might not be able to contribute a lot from a financial standpoint but could provide the acquiring institution with new courses of study or faculty members with stellar credentials.
- Maintain a positive atmosphere. Communication is absolutely critical throughout the entire merger process. At the outset of our merger discussions, our communications group prepared a communications plan with appropriate messaging for the various stakeholder segments. The plan included regular written communications and updates along with regular forums, meetings, and other in-person communications. Messaging, updated continuously throughout the pre- and post-merger periods, included information about the merger’s benefits—such as new academic programs and an enhanced position on the global stage—and was communicated through websites, e-mail distributions, and town hall meetings that featured both institution’s presidents.
With any talk of a merger, naysayers will emerge. Frequent and substantive communication with faculty, staff, students, alumni, parents, and other stakeholders keeps the entire campus community engaged and upbeat about the possibilities that come with a merger.
There are many other critical elements (governance, financial pro formas, financial aid, working with regulators and accreditors, and so forth) to successfully executing a merger between higher education institutions. If done properly, however, the benefits can be substantial.
RICHARD “MAC” HISEY is senior vice president of administration and finance and chief financial officer, Berklee College of Music, Boston.