Rengineering the UJC

March 1, 2000
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Michael Hammer

Carl Sheingold usefully identifies three “story lines” in the merger of the old national systems into the UJC: the business/management line, the political/governance line, and the philanthropic line. While this division helps us better appreciate the range of issues involved in the merger, we need to recognize that all three lines are in fact tightly interwoven. Success in any one of these dimensions depends on success in the other two.

In the business/management story line, the merger “grows out of the Federations’ desire to align the national system with their own structures.” In other words, the merger is an exercise in rationalization and efficiency. Unfortunately, mergers pursued with this “rational” perspective almost always fail. Indeed, in the private sector, most mergers do fail (some estimate the figure to be high as 80 percent), in the sense that they do not achieve the results (cost savings, market share growth, etc.) that motivated them in the first place; the overwhelmingly most common reason for these failures is that the leaders of the merging enterprises are insufficiently bold and ambitious in their efforts. Ironically, by seeking to be cautious and conservative, they in fact court disaster.

By their nature, mergers are very tricky things. Simply putting two organizations under a common roof is juxtaposition, not merger, and accomplishes little or nothing. Indeed, juxtaposed organizations usually perform worse together than they did apart, since they expend enormous energies and resources on internecine power struggles. Such “mergers” merely turn international conflict into civil war. A real merger inevitably destroys both of its antecedent organizations and creates in their stead a new and different one, with new ways of operating and a new set of values and cultural norms. The new enterprise may draw on each of its predecessors for some of their parts, but it is far more than their sum.

Key to the fashioning of this new merged organization is a compelling vision of what it wants to accomplish. Without such a vision, the new enterprise cannot resolve the innumerable issues relating to how it should operate. More important, it will have nothing with which to energize and inspire employees and customers and to motivate them to transfer their allegiances to the new entity. Leaders of successful mergers know that the period immediately following the merger presents a unique opportunity for innovation and bold steps. They recognize that the slate is perforce being wiped clean; they take advantage of this fact to write upon it their most ambitious and visionary goals.

These lessons have been learned in the private sector, but they are not unique to it. They apply as much to the UJC as they do to banks or auto companies. If the leaders of the UJC view the merger primarily in “rational” terms, they will have little to show for their efforts. The sea changes in American Jewish life that Carl Sheingold describes, and that in fact motivated the merger in the first place, demand more than just reshuffling of boxes on an organizational chart. Our old national institutions were well suited for solving the problems of the mid-twentieth century. They were not designed for an era of an economically strong State of Israel, of rampant assimilation, of a revival of interest in Jewish learning, of a burgeoning day school movement, of disaffected philanthropists, of weakened communal ties. Old structures–even “merged” old structures–will not solve these new problems. Only if the merger is used as the opportunity to refashion a vision of American Jewish life and to reinvent the national institutions charged with realizing that vision, will it be a success.

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Michael Hammer is President of Hammer and Company, a management education and consulting firm that advises large enterprises on issues of organization and operations. He is the author of Reengineering the Corporation, among other books.

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