Five Secrets to a Successful Acquisition in Healthcare

Virtual StrategiesBy David Braun

With so many new laws and regulations raising the pressure on hospitals and healthcare institutions, more consolidation in the industry can be expected. Every merger or acquisition brings challenges of integration.

As you start putting the two entities together, it’s essential to look out for the teams of people responsible for operations and patient care.  So what does it take to meld two companies into a single thriving entity that improves relationships and builds confidence?

Bridging two workforces requires identifying and integrating their approaches to short and long-term operations and, just as important, their day-to-day working styles.  The fact that both companies are in the healthcare industry isn’t enough to guarantee an easy fit.

Needless to say, there are as many cultures and business strategies in this industry as there are companies. Common ground has to be discovered, explored, built and tested. Even with the best-matched companies, integration can still be tricky. below are 5 tips to ease your path:

1. Move quickly: Have a 100-Day Plan Ready to Go

Once a merger is announced, employees from both the buyer and the seller naturally expect changes to occur. Moving quickly over the first 100 days will give you the smoothest path to implementing changes. If you procrastinate, you are likely to meet more resistance as employees go back to business as usual. You need a written 100-Day Plan for your entire integration team to work from. The Plan should be built around two basic questions: Where do we begin? And what do we want the new company to look like after the first 100 days?

2.  Quality not quantity when it comes to communication

Communication is key to successful integration; however communication shouldn’t be measured by how much is shared but rather how well it is shared.  Your employees do not need dozens of meetings or bulletins. They want honesty and credibility. If you plan to change something sensitive, like vacation policy, it is important to explain openly to employees why, when and how you will make changes — whether online, in print or through in-person announcements. While you won’t eliminate uncertainty or doubt, being direct and honest with your employees will ease concerns and lessen the spread of rumors.

3.  Listen to your employees

This is a time when the healthcare industry is in huge upheaval, and employees are generally anxious about the future. Add the stresses and unknowns of a merger, and there could be a crisis of morale looming. The best strategy is to listen to your employees. You might set up a toll-free hotline or in-house online forum for them to anonymously vent their frustrations and ask about rumors.   Not only does the staff need to know what you are thinking — just as important is knowing what they are thinking. Creating easy-to-use “listening posts” will allow management to understand what employees are concerned about and respond quickly.

4.  Speed up integration through Secondment

Secondment involves taking a few people out of the company you have acquired and placing them in equivalent roles in the your own organization and vice versa. These embedded representatives serve as interpreters. They learn about the culture of the new partner, and take their insights back to the home team. The move need not be permanent, but should last for at least six months – enough time to get everyone up to speed and make the adjustments that will realize the maximum synergies. Secondment will allow you to get a sense of what matters most to the employees on both sides of the deal. You’ll also discover hidden strengths and weaknesses in both cultures that help you make the best of your new acquisition.

5. Reverse Integration

Integration needn’t be a one-way street, with only the buyers bringing their systems or culture to the newly acquired company.  The healthcare industry is unusually dynamic, with new management strategies and technologies constantly appearing on the scene.  Your acquisition should help both companies grow and move forward, embracing the strengths of each. Does one have a unique sales team structure that increased the bottom line?  Does one have higher employee retention based on a strong rewards program? You want to discover and incorporate the winning elements from both entities.

David Braun is the Founder & CEO of Capstone Strategic www.CapstoneStrategic.com, a management consulting firm specializing in corporate growth strategies, and author of the new book, Successful Acquisitions: A Proven Plan for Stategic Growth. David has over 20 years’ experience formulating growth strategies in a wide range of manufacturing and service industries and has completed more than US $1 billion in transactions with his firm Capstone. He can be reached at dbraun@capstonestrategic.com