As we approach the end of the first half of 2018, the number of healthcare organization mergers and acquisitions (M&A) is at a record-breaking pace. As we discussed in our January 23, 2018, blog post entitled M&A Success Dependencies: It’s Not Just About the Bottom Line, one of the critical measurable factors that dictate whether a merger or acquisition is a success is culture. Do the different cultures of the organizations meld together well? Was employee satisfaction measured and monitored?
Let’s discuss what should be considered to help the combining of cultures.
It is imperative that you continue to cultivate the new organizational culture long after the M&A activity is complete. Are managers and leaders from both organizations leading through the change? Are employees of the new organization assimilating to the new arrangements? Is morale dropping? Are synergies failing to materialize between the combined staffs? Are important leaders or staff members starting to leave for new opportunities? If you are not paying attention to your culture, then before you know it, you will see some unexpected costs that are unrelated to finances.
When it comes to mergers and acquisitions, there are usually well-developed plans and toolkits for handling operations and financials. Results are carefully measured to see if goals are met. When it comes to integrating cultures, however, it is challenging, if not impossible, to measure directly. Do organizations approach both situations with the same enthusiasm? Who is accountable if there is a culture-clash? Do leaders know what to do about it when or if it happens?
Some questions to consider are:
Integration of cultures is not something that can take place over-night and isn’t something that should wait until the ink is dry on the contract. Once an agreement is verbally agreed upon, leadership from the organizations should immediately put a committee together and start working on integrating the cultures of the organizations. Employees are smart. They watch leadership to gauge the organization.
In a recent article published by Healthcare Finance News, more than half of senior executives cite market share as the primary driver behind their moves toward consolidation. The article references a recent study by West Monroe and Mergermarket where over a third of the respondents said their most significant error was not detecting a mismatch in work cultures.
If employees are informed about a merger or acquisition, in which modern technology is very likely, they need to see that leadership is committed to building a culture that excites them. If they don’t see a future of growth and an organizational culture that is positive, then the administration has a far worse problem on their hands.
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