When pursuing a merger, clinical affiliation, or other organizational partnership, it can help to step back a moment and think of the organizations as though they were people. You may be amazed at how it can smooth the process.
Most leaders in health care look at mergers, or clinical affiliations, or other relationships through organizational or transactional lenses. Questions they typically might ask include:
- How would our strengths, weaknesses, and opportunities be affected if we combined forces?
- How continuous are our markets?
- Is this deal accretive?
- Will completing this transaction make it more or less difficult to complete the ‘next one’?
These questions reflect a purely analytic view of such transactions. Although there is value in seeking to evaluate a possible merger or affiliation logically and objectively, this approach does not acknowledge the human side of building such relationships—where values and personalities that come into play can have a decisive impact in determining the success and vitality of the merged organization or affiliation.
Organizations contemplating a merger or affiliation can benefit from thinking of the corporate discussions as a dialogue between individuals—where the questions are framed in personal terms and the objective is to create a relationship that is mutually fulfilling. This kind of dialogue can help inform the effort to build a strong corporate relationship.
Personal Questions: Replicating Corporate Concerns
The questions should address dynamics present in personal relationships that also exist analogously in corporate relationships, including the basis for the attraction, the level of trust, and the extent to the parties have shared goals. Here, we offer five examples.
Assessing the reasons for integrating. The personal question: “What’s the attraction between us?” This question gets at the root of a common corporate question: “How deep and broad is the potential opportunity?”
A deep opportunity, for example, might be to effect a change in markets or services, in profitability, or in accomplishing each organization’s core vision. By contrast, the opportunity might be shallower if the transaction represents only a defensive move or an effort to get bigger.
In terms of breadth, an opportunity might be something only the CEO sees versus something that is obvious to the board, to staff throughout the organization, or to patients and members. Another consideration is whether the transaction has only financial appeal or has a broader range of attractions, such as the potential for increased market share, lower costs, and preeminence in service delivery.
Assessing trust. The personal question: “The person claims to be trustworthy, but as we get to know each other, will I be able to trust that that this person has my back?” The corporate counterparts to this question might be the following:
- Does this organization have a track record of following through in its relationships?
- How clearly do the key individual leaders demonstrate integrity in their personal relationships? And can the same be said about the next generation of leaders in line within the organization?
- Do our contacts within the organization actually have the power and authority to stand behind the organization’s promises?
- How certain can we be that the organization can lean in and meet our organization’s needs, even when doing so doesn’t immediately serve its own needs?
Agreeing on goals. The personal question: “What kind of relationship do I want, and what kind do I think the other person wants?” For an organization, such a question might translate into the following in corporate terms:
- Do we want partner, a peer, an employer, a sponsor, or a capital source that leaves us alone?
- Is everyone on the same page regarding the relationship goal?
- Is the goal to build a larger organization that embodies the attributes of just one of the partnering organizations, that celebrates and maintains the two organizations’ differences, or that seeks to combine elements of both partners over time?
Building respect. The personal question: “Do this person and I respect each other?” In corporate terms, this question can be expressed as follows:
- Does each party bring something that is highly respected to the integration? Do the leaders show respect for each other, particularly those who interact most often?
- Will the organizations respect each other after the deal is done, or only through the transaction?
- Is there a simple, relaxed sense of enjoyment inherent in the relationships across the two organizations?
Developing strong communication. The personal question: “How well do we communicate?”This question addresses a concern that is intrinsic to any strong relationship. On the corporate level, the concern is about the speed, flow, and quality of communication:
- Do we communicate quickly? And does communication occur at various levels across the two organizations (e.g., in finance, in marketing, in philanthropy, and in physician offices)?
- Are communication and decision-making interconnected in the two organizations? Can each organization adapt its communication style to the other organization’s style and expectations?
- Is there a process for ensuring messages are not misinterpreted, and for ensuring each organization is meeting the other’s expectations for communication?
The Rationale for the “Personal” Approach
When contemplating a merger or affiliation, asking more personally framed questions can be a valuable exercise for several reasons.
For one, it can help inform more-discriminating choices. Healthcare leaders have many choices today regarding potential partnerships or acquisitions, and looking at opportunities through a personal lens can help to narrow the range of options, thereby enabling the leaders to focus on those that are truly promising. Even if capital is not a limitation, organizations have only so much band width, and so much ability to manage change. And becoming tied up in consolidation efforts that fail to yield desired results not only saps energy, but also leaves the organization saddled with cumbersome arrangements that are difficult to unwind gracefully. It’s worth the extra effort to choose carefully.
Taking a personal view also helps ensure relationships have lasting power. As the healthcare industry enters a time of reduced financial resources and increased uncertainty, it is important for healthcare organizations to enter business relationships that are more than short-term opportunities and can endure and prosper amid the inevitable ups and downs.
At the end of the day, organizations are clusters of individual relationships. If one hopes to understand another organization, one must understand its key internal and external relationships. Leaders also must be able project how the transaction might change those relationships, as well as the relationships within their own organization.
Addressing all these considerations may at first seem like a difficult and time-consuming task, especially for leaders who have dealt with relatively few consolidations. But it likely will end up seeming like familiar territory, because everyone has experience in dealing with literally thousands of personal relationships, and many of the basic personal skills and nuances are transferrable.
A Compatibility Test
As you embark on a new integration initiative with another organization, we recommend pausing for a moment to ask the types of questions you would ask if your two organizations were two individuals? We have found that this simple process yields valuable information. It can reinforce moving forward, and it sometimes can lead to more caution.
Keith D. Moore, MCP, is CEO, McManis Consulting, Denver, and a member of HFMA’s Colorado Chapter.
Dean C. Coddington is a senior consultant, McManis Consulting, Denver.