Merger Mechanics: A merger story from the trenches

Most merger stories are told from the point of view of the CEO, the point of view of strategy and overview. Not this one.

Most merger stories are told from the point of view of the CEO, the point of view of strategy and overview.

Not this one.

I was no one’s CEO. I was the person put in charge of stitching two merging credit unions together. I didn’t even learn about the merger until it was announced to the staffs.

I toiled in the trenches. We had to make a working $700 million credit union out of the $480 million First Resource Federal Credit Union in St. Joseph, Mich., and the $215 million United Federal Credit Union in Buchanan, Mich. (The name United would be retained by the new credit union.) Both credit unions had members around the world and branches in three states; most branches were in southwestern Michigan, but some were in North Dakota, Arkansas, Ohio and North Carolina. The merger was announced to the staffs on July 12, 2006, as yet without NCUA and member approval; we had until October 1 to pull off the name change and dual service in all southwest Michigan branches and until April 1, 2007 to complete the data conversion.

I didn’t have to handle the regulatory approval, the member voting, or the legal agreement; these were taken care of by senior officers. I was appointed project manager for the merger -- in charge of all facets of the merger integration process, in fact, what turned out to be 22 integration categories.

I had done this kind of work before. I had worked at First Resource Federal Credit Union for 27 years, beginning as a teller, then moving into IT, eventually becoming the IT manager. First Resource over the years had merged smaller credit unions into it, and I had been project manager for some of these efforts. But this merger was of a scope and complexity far beyond anything we had ever done.

There was one more wrinkle. I did this while working at home three hundred miles away from the headquarters of the two credit unions. But as it turned out, this was really of little consequence. I traveled to Michigan a few times and once a week for a video conference at a branch in Marion, Ohio. With thanks to a knowledgeable, dedicated team — we pulled the whole thing off rather neatly.

One of the first things I did was examine the records of our previous mergers, borrow from their templates and re-read lessons learned. One of the biggest lessons we had learned in the past was that the merger has to be about people, about the staff. The merger wasn’t just an IT problem or organizational charts; it was people working with people to get a job done, and to have some fun and excitement along the way.

Forging Ahead
Within 12 days of the merger announcement we had established 22 integration categories. We then assigned one representative from each credit union to a category, thus making for 22 two-person teams. Some people worked on more than one team and a few on as many as three. We made clear from the very beginning that each team member would work in a marriage-like relationship with his or her counterpart. Some of these team leaders were officers; some managers, but their responsibilities now were great.

We hammered out team leader responsibilities, established schedules for team meetings and developed processes for tracking, reporting and communication. In August we brought all of the teams together and spent a good deal of time discussing how we were going to pull this off. We talked about how this merger was necessarily different from the ones First Resource had done before and how we would have to think differently. Top management made it clear to everyone that we were to place on hold all non-critical projects at both credit unions and disallow any new ones. We looked to see that the transition teams had the resources they needed – temporary employees, contractors and so forth. For example, UltraData assigned a project manager to the data conversion work, and we hired a consultant (a former UltraData employee), because we knew the data conversion would be one of the most complex integration categories.

Each integration category was divided into subcategories. One of the categories that went most smoothly was Marketing. It was divided into three phases: Introduction, Transition, and Launch. Each phase had multiple steps with deadlines and assignments. Team leaders fed me information and updates, which I tracked using Microsoft Project, Excel spreadsheets, and Word documents. The core team was charged not only with completing their tasks and reporting on them but also with identifying potential risks that would threaten the success of the project and with developing plans for dealing with such risks. We were very detailed and kept records that might help in a future merger.

The network integration was one of the most complex aspects of the project, which was handled separately from the data conversion owing to the skills required. We have a very sophisticated network infrastructure – which includes, for example, videoconferencing capability – and we found our integration efforts here were hardest to keep on track, mainly because of trying to coordinate schedules with key vendors. We were already in the process of changing the technology for our data communication network when the merger was announced and now we needed to extend that technology to our new branches, not only for the day when the branches would be part of a merged credit union but also more immediately for the training we wanted to get to the staffs of those branches.

We felt communications was very important. We sent out a weekly “Mission Communication,” and held regular staff meetings. We used our Intranet and published a Merger Reference Guide. We also worked hard to keep the members informed.

Looking Back
Glitches? Well, our official merger date was October 1. We told members of both credit unions that as of that day they could use the branches of either. We anticipated traffic pattern changes, but they were more dramatic than we had expected. In southwestern Michigan we had a hard time at first with the new traffic patterns because of limited staffing, limited space and limited network bandwidth.

Lessons learned? Lots. We learned we had to train staff who were going to be using a new data processing system not only how to do a transaction, but also why they were doing what they were doing.

We also learned that as soon as the merger was announced we should have been working immediately on the network communications infrastructure. The more and sooner the capacity, the more readily we could have done training for the staff at those branches.

We set up a “Command Center” the week of the data conversion. Staffers could call with questions and be assured someone knowledgeable would answer the phone. Calls came in plentifully on Day One (April 2nd) but dropped significantly thereafter. We were able to dismantle the Command Center within the first week of operation.

We also felt that at the end of all this effort, team debriefings were important. Beginning on the day after data conversion, every day at 8AM and again at 4:30 PM we gathered the core team, Help Desk staff and Command Center staff to check the pulse of the credit union, asking things like What’s going on, and Who’s doing what? This was critical in those days. In addition, with these debriefings we could document our efforts and save our most important lessons for any future such work.

And last, we loved our “Conversion Diversions,” which were the brainchild of the officers, who understood there was going to be a lot of stress. “Our Diversions,” included a pizza luncheon, a pleasant breakfast, a morning movie at the theatre, ice cream treats and more. With every “Diversion,” came a thank-you note from the officers. The HR department did some wonderful things – morale is very important!




Nov. 5, 2007


  • Great Article
  • We often hear about the strategy or rationale behind mergers from the CEO or Board''s perspective. Thanks for sharing an insiders view of what happens after the deal is signed.
  • Great information about breaking large projects down into self-directed teams and having information flow together to meet a drop-dead deadline. I hope all CEOs think about the drag on human resources, as well as the technical & physical assets in every merger.
    Carolyn Warden, CCUE
  • Great article. Your story is an excellent example of how often the decision to merge is the easiest part of the whole process! your attention to the "front line" employees who would be dealing with the day to day ramifications of the merger is commendable.