Sue Schade, Principal, StarBridge Advisors

M&A activity continues – for IT leaders it’s not just about technology

Sue_Schade_023 M&A activity continues – for IT leaders it’s not just about technology
Sue Schade, Principal, StarBridge Advisors

Mergers in healthcare continue. Some are mega mergers of multibillion-dollar health systems, and some are smaller local hospital consolidations or mergers. Merger and acquisition activity may mean structural forms other than a full merger such as integrated partnerships, joint ventures or management services agreements.

Regardless of the type of merger or the size and scale, the potential to reduce costs while improving patient care is often on the agenda. For IT leaders, this means that consolidating data centers, integrating networks, migrating to a common EHR, data sharing and integration, application rationalization, and outsourcing commodity services may be on the table.

But there’s more than just the technology to think about. You need to think about the people impacted and the different cultures of the organizations involved.  Will there be layoffs as teams are integrated and functions consolidated or retraining and new opportunities for your leaders and staff?

Uncertainty and fear of the unknown can paralyze people and keep them from being productive. It can lead to negative behaviors and conflicts. If there are other employment opportunities, people may start leaving on their own.

What should IT leaders do to retain talent while ensuring the strategic goals of the organization and the drivers for the M&A activity are met? From someone who has seen and experienced several organizations go through these changes, here are my top pieces of advice:

Get to know your new partners and colleagues early – Whether it is a merger of two equals (which is rare), or you are the big organization acquiring, or the smaller organization being acquired, you need to know who you will be working with in the new world post-merger. Openness, collaboration, and a willingness to learn from one another is critical. This is how effective new relationships are forged.

Culture is key – A shared mission and common values are critical. It means showing respect for the uniqueness of each organization, being willing to learn best practices from one another, and appreciating all the staff.

Partner with HR early on – They are at the epicenter of all people changes. They are the people experts. They will tell you what you can and can’t do. They can help you think through options. And if there are union issues involved, they will guide you and keep you out of trouble.

Communicate early and often – The lack of information can lead to rumors and more fear and uncertainty. Town halls, regular updates, and face-to-face meetings with teams are all important aspects of any communication strategy. My three general principles for communication:

  • Tell people what you know when you can
  • Tell people what you don’t know yet
  • Tell people if a decision has been made but you are not ready to announce it

Think win-win not win-lose – Regardless of who comes out on top there is most likely plenty of work for everyone for the initial period post-merger. Make sure you know the goals and career interests of everyone impacted so you can realign people into the optimal positions.

Be kind and generous – Anyone who needs to eventually find employment elsewhere will need support. References and network introductions are “gold” when you find yourself suddenly looking for a new opportunity in a competitive job market.

And remember, we work in healthcare. An industry that is all about the patient. And we are all patients at some point. If our common goal as healthcare professionals and leaders is to improve the health of all people by providing more access to basic healthcare that is affordable and convenient, then all these mergers hold promise. Or said another way, if they help organizations deliver the right care at the right time in the right setting and right location, then that’s a good thing. Embrace the changes and lead with compassion.