The Unanticipated (and Sometimes Unfair) Consequences of Strategic Alliances

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October 25, 2012; Source: Silicon Valley Business Journal

We often hear people discussing organizational partnerships in terms that assume that a larger organization tends to be stronger and more stable and resource-rich than a smaller one, but this is a vast oversimplification, according to this story of a small organization that has been destabilized by its partnership with a larger group. Strategic partnerships exist along a continuum of more to less autonomy. The relationship between the two groups described below is fairly autonomous on paper, perhaps, but one still has the capacity to deeply impact the operations of the other.

Located in Silicon Valley, Loaves & Fishes is 33-years-old and its purpose is to feed the hungry [Full disclosure: the article we are citing is by a board member of Loaves & Fishes]. On October 19, it was notified that it would not be allowed to serve food out of one of its three locations at the Innvision Montgomery Street Inn. The hunger program had invested $70,000 in building a kitchen at the Innvision location and paid $2,100 rent each month but because Innvision decided, in a larger strategic planning process, that it had to cut back on its daytime services, the program was given a month’s notice to cease operations in that location.

The author of the article surmises that the eviction is the result of InnVision’s July merger with the San Mateo-based Shelter Network, which yielded the InnVision Shelter Network. The executive director of Loaves & Fishes says she believes that InnVision Shelter Network is trying to manage costs after its merger and in the face of declining federal contracts, but she does not understand why this should affect their operation, which she says operates fairly self-sufficiently.

InnVision Shelter Network has an annual budget of $16 million. The annual budget for Loaves & Fishes is a meager $661,000 and it has always, according to this article, operated in the black. –Ruth McCambridge

  • Ron Wormser


    As someone who has been trying to understand how and why some ‘strategic alliances’ work better than others, it would be helpful to know whether the sad story reported here is a rare exception or illustrative of a discernible pattern. The headline suggests the latter, but is there data to support that inference?

  • Lisa Bretsch

    I think it’s interesting that the Loaves & Fishes hunger program invested the amount of money it took to build a kitchen in another organization’s site without seemingly any type of long-term protection of their investment. The article seems to imply that no operation contract was in play in the decision to close down the daytime services of the kitchen that Loaves and Fishes paid for, leaving the smaller organization’s mission sacrificed to a corporate merger.

  • Dione Alexander

    Whenever an organization; be it for profit or nonprofit, goes through a merger there will inevitably be change. If no change (growth, contraction, improvement, brand management) was anticipated then there would be no need for the merger. In the course of change service providers may replaced for myriad reasons that may have nothing to do with the quality of their services or the effectiveness of the mission. While these replacements may be painful, they are not necessarily unfair. The larger issue here is that a very small organization was highly dependent on a single larger organization and that situation always presents a sustainability challenge.