The Huntzinger Blog


Avoiding Hand-to-Hand Combat: M&A Survival Tactics

One of the major challenges facing healthcare CIOs is dealing with the accelerated pace of today’s merger, acquisition, and affiliation (MA&A) activities. This challenge was the topic of a focus group of 13 CIOs, recently conducted at the CHIME 2017 Fall Forum. The group agreed MA&A activities were impacting their responsibilities, noting the activities were placing heavy demands on information technology (IT). The CIOs felt it was challenging to be an effective leader involving multiple MA&A activities — addressing multiple goals/objectives, sometimes conflicting, and balancing with day-to-day operational requirements, further exacerbated by limited IT resources amidst a growing workload. The group then examined actions that can aid in managing MA&A activities.
Start with the Puzzle Defining the Vision
  • Every organization is different, set in their ways, no solution fits all.
  • Organizations need to set expectations up front.
  • IT often is on the back end of the decision process, not involved in direction setting, planning, and contracting.
  • Frequently, expectations are that IT changes will be accomplished in a short (sometimes unrealistic) time frame.
  • Risks are security, cost, and overall success.
  • Large multi-state organizations have a plan, it’s what they do (other organizations struggle more due to lack of a plan and experience).
  • Defining and understanding the vision for the resulting organization(s) is synonymous with building a puzzle (e.g., it helps to build the frame first, before attempting to determine where all the individual pieces fit).
  • MA&A events are inherently traumatic. The absence of information, including a defined vision, creates a vacuum, which will be filled by personal perceptions. To achieve true organizational alignment, clear definition and communication of the vision for the resulting organization is essential.
Is it a Light or a Train? – Establishing the Goals
  • The goals need to be defined, including the “hidden” goals and expectations.
  • Lack of agreement and understanding causes MA&As to fall apart.
  • Drivers for MA&As are often organizational branding, covered lives and profit.
  • MA&As are sometimes challenged by working with competitors in the market to share data and improve quality, each organization is very different.
  • Key is to establish and communicate clear goals, because absent clear definition of measurable goals, there is little chance to determine when, or if, MA&A integration has been successfully achieved.
  • Too often CIOs, involved in an MA&A event, get prematurely wrapped up with detailed technology decisions. First and foremost are the organizational goals, from which other sub-goals, such as technology direction, should flow.
Have a Culture Other Than Bacteria – Setting Culture
  • Physicians forced to be employed are just angry.
  • Issues are less about the deal and more about the new partner, and why they were acquired.
  • Some organizations pursue an enterprise approach, while others decide to leave regional or local processes in place (patient experience is unique to a region).
  • Culture is often the most critical integration dynamic, but also takes a long time to settle.
  • Successful organization integration is predicated on setting a desired culture, either from one that already exists, or from a new one to be created.
  • Blending two organizations into a single culture is challenging, no matter how well their visions are aligned. Culture stems from the employees who live it, and two groups may approach the same goals from totally different perspectives.
Who Calls the Ball? – Redefining Governance
  • Dominant player leads and new organization gets plugged into the overall governance process.
  • The best approach is to collaborate, inquire about the difficulties of both organizations, capitalize on internal staff knowledge.
  • Set back and consider — What if the roles were reversed? How would you like to be engaged in the process?
  • Keep people calm with communication about the process.
  • Look for lessons learned for the next MA&A event.
  • The resulting merged, acquired, or affiliated organization(s) will need to designate which of the existing governance structures and processes to follow, or implement new ones.
  • The IT governance process should focus on addressing the information processing need, rather than debating a particular technology or system. All IT decisions should be predicated on their fit with the organization’s strategic vision and plan, and include active C-suite involvement.
Playing Musical Chairs – Restructuring Staff
  • Initiate this task early, talk to people, communicate and follow a plan.
  • Assess skills and individuals’ goals, providing development plan, training, and credentials.
  • While some leave, those who stay many times get increased opportunities.
  • Those who complain should also bring potential solutions.
  • Those who opt out may still have value, but in a different role.
  • Besides the obvious stress on staff morale, restructuring can be detrimental to IT operations and support if not well executed. Having a clear vision for the staffing required to support the post-integration systems and process needs is essential.
Too Many Standards! – Integrating Technologies
  • The surviving/driving organization usually sets the standards.
  • One of the challenges is how to handle all the ancillary (i.e., non-core systems), as well as how to effectively decommission systems being replaced.
  • Although time consuming, and perhaps politically and economically sensitive, determining the resultant application and technology portfolios may be the least traumatic of the dimensions to be addressed.
  • A smooth transition of technologies is important, but not the most difficult or vital concern. It’s more critical to fully understand the cultures and build upon the combined strengths of the teams.
What About the Square Pegs? – Compassionate Exists
  • Despite all best efforts and intentions, some people, processes, and technologies just may not fit the new environment. Attention must be dedicated to facilitating their graceful exit.
  • Once the fear of change caused by career disruption is faced, most individuals, with support from their current organization, successfully transition into new opportunities. They frequently find their new position not only has more responsibility, but is a better fit with their skill set and career aspirations.

The group closed noting there are additional related topics that would be worth discussing in more detail in the future:

  • Decommissioning systems
  • Cybersecurity
  • Governance with compliance and execution
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