It’s no secret that both consolidation and growth are occurring at a rapid pace in behavioral healthcare. The dynamic has resulted in more acquisitions and mergers that create value for not only our patients, communities and investors, but also our boards and staff.
When two entities come together in a merger, partnership or reorganization, it always just “feels” better than an acquisition. The latter can feel like a zero-sum game with a winner and loser, with one company’s will being imposed upon the other.
We know what it feels like to merge, and we think there’s a better way. It entails thoughtful collaboration with the other company rather than one assuming the role of dominant power. Here are 11 key things needed to make this new approach work.
1. Captivate your people
There’s more than enough work to go around, since so much must be accomplished in critical areas that include management, IT, culture and more. Captivate the best and most capable people to be part of the new singular goal, mission or vision. Competition for great talent is stiff in this changing environment, and having quality, engaged staff is the only way to succeed.
2. Understand the difference
In the book, “Strategic Unions: A Marriage Guide to Healthy Not-For-Profit Mergers” (Guth: January 2015), it’s pointed out that mergers of not-for-profit organizations are really mergers of governing boards. Try to retain every single board member interested and committed to the mission.
Those boards should be informed by the emerging drivers in our industry and be ready to implement a responsible plan of action. A family of closely aligned and balanced governing boards is ideal, in which mutual accountability trumps an all-powerful parent board.
3. Engage your board
This group must embrace the greater goals that lie ahead without worrying about protecting the local name or brand at the expense of serving clients. They must understand the value proposition of the merger: making services more available and efficient, and improving outcomes.
Anyone who wants to maintain the status quo shouldn’t be asked to board the bus. True, not everyone will come along for the ride, so be happy about those who do and are excited about the prospects.
4. Be honest
In a merger, you don’t put lipstick on a pig and pretend it’s something it isn’t. When conflicts and disagreements occur about company direction—and they will—have brutally honest conversations about that early on. Don’t whitewash issues around the merger and let them linger and cause problems later.
Start with the basic elements of a plan and don’t gloss over them. Build that foundation. Look each other in the eye and say, “We’re together on this.” If you don’t, the deal may not work and you’ve wasted precious time and resources.
5. Bend a little
A CEO who survives a merger is somehow in an elevated position. What’s required now is a willingness to be flexible and, if necessary, to change how the job is done.
Those you’ve worked with may have a high comfort level with you. Remember that your functionality helped get you to this point. Bring it with you to this new group of people who need your talent and expertise.
6. Accept the discord
Maybe you’re changing the organization’s name, and maybe people are being assigned different roles and responsibilities. Those things are hard decisions to make, yet they all emanate from the leadership. It’s easy to talk about them, but harder to do, whether you’re thick-skinned or sensitive.
Be committed to listening honestly, because you might think everyone is happy and smiling when realistically, a lot of trust must be built. People may be suspicious of your motives or the new direction or purpose. Try to be objective and transparent in your responses, and limit your own defensiveness. And don’t take anything too personally.
7. Get real
Executives can tend to think about mergers like a crocodile waiting for a meal. If you proceed like that, you’re probably not going to find the most strategic partner. Be clear about what you want to accomplish with a merger, because the merger is not the end goal. There’s more.
If you just “eat what’s in front of you,” you can end up in a messy partnership (and indigestion). Remember size doesn’t matter, really. More services won’t necessarily put the organization in a better position.
8. Create a culture club
If merging cultures doesn’t work, you could have an insurmountable challenge ahead of you. If an organization is really so different, can you make this merger happen? If the overarching goals are more important, you may need to change your culture—period. It’s not always about finding someone who thinks like you. It’s about finding someone who shares your values.
9. Say “I do”
Try not to think of this as an acquisition, but a marriage model from which you’ll gain the most benefit and strength. That way you harness what’s good about boards, leadership teams and cultures: the vision, energy and expertise. It’s a whole package.
10. Grieve and let live
Enter into this merger with humility and remember you’re going to a place none of us has been before. Change is hard, so don’t think it will be a walk in the park. It can be the most difficult yet rewarding work you’ve ever done. You’re always dealing with the grieving process and you’re no longer in the kitchen as every dish is prepared.
11. Be gentle
Yes, you may learn the hard way, and despite your best effort, you’ll stumble. It’s ok. Some say the process is like flying an airplane while building it. You face enormous market pressures and change, even as you develop systems for present and future. Look toward the future.
David Guth is Chief Executive and Founder of Centerstone.
Jeff Richardson is Executive Director Mosaic Community Services.
Centerstone and Mosaic are non-profit, community-based behavioral healthcare organizations.
This BH Deal Insider blog was contributed courtesy of the National Council for Behavioral Health.