As healthcare organizations grapple with the dramatic changes taking place on every front, one frequent response is to enter into one of an array of possible business alliances with select partners. Those business combinations range from simple contracts to full mergers and acquisitions. What they have in common, though, is the desire to create some benefit for both parties that neither could have achieved on its own.
This approach can be a powerful tool but it is one that must be used with great care. It is not unusual for business combinations to fall short of their desired outcomes, not because the concept lacked merit, but because the process was not led with the thoughtful nurturing that is required.
Below are five key considerations to help ensure your next partnership or collaboration is a successful one:
Choose carefully.
As you contemplate any form of business alliance, consider carefully whether it is the best avenue to achieve your desired goal. Often these transactions are understandably driven by the pursuit of scale. But if the desired outcome from scale is more than mere market leverage, you need to assure that the scale advantages are truly achievable. This is a functional decision, not just a philosophical or cultural one.
Scale works best when combining functions where the process is, or can be, highly standardized and where sizable fixed expenses can be spread over increased volume. When similar functions are carried out through processes that are variable by necessity, theoretical economies of scale can turn into diseconomies of increased complexity.
In health systems, it is typically easier to harvest scale advantages in standard administrative functions. Achieving scale advantages from combining clinical services is a far more challenging undertaking driven by referral source preferences, institutional reputation, travel patterns, geographic access, community concerns, and a host of other considerations.
Assure alignment between parties and within your team.
Sounds easy, right? At a high level, it can be. But for business combinations to work, both parties must share, between them and within their own teams, a clear understanding of what will be required to achieve the benefits both are seeking.
Dealing in abstract or high level aspirations may feel good but doesn’t prepare the organization for the hard work ahead. The more you can specifically envision the road ahead, the greater the likelihood that you will be successful in driving to the goal.
Will jobs be lost, locations closed, employment relationships changed? Those are just a few of the difficult changes that often accompany these transactions. It is essential that both parties understand and are committed to the path ahead. Certainly there will be adjustments along the way. But the more you can anticipate or agree on what will be required, the more you can collaborate to work through the myriad issues you must address.
Thoroughly assess the compatibility of culture and values.
This is always discussed, but often done poorly. In the “courtship” stage of these transactions, both parties are on their best behavior. It is imperative that you dig deeply into one another’s culture and values to determine whether you share a common foundation on which to drive the combined endeavor you are undertaking.
Thoughtful time spent in exploration of the ways each organization functions, makes decisions, allocates time, rewards performance, drives innovation, manages conflict, etc. may seem awkward, but alignment around those cultural and values norms could largely determine success or failure.
Build a foundation of collaboration and trust.
Before diving into substantive workstreams, spend time with the newly formed team to invest in building trust, and the processes and skills necessary to act on that trustful intent. This goes well beyond simple “icebreaker” or “trust-builder” exercises. It involves thorough discussion and development of shared goals, shared values, and shared processes through which decisions will be made and the endeavor will be managed.
Creating a clear and shared set of guidelines and “rules of the road” to which the combined members of the team can return when the going gets tough can be of immense value. So, too, the development of a deeper understanding of leadership styles and behavioral tendencies so that the team can develop resiliency, believing the best of one another and working from an understanding and appreciation for their differences.
Communicate like crazy.
New business combinations always bring with them disruptive change and uncertainty. Down through the organization, team members will fill any void with their own speculation and most often those scenarios are more negative than the reality. To keep the organizations moving forward, it is critical to communicate what you can, when you can.
It is equally important to keep in front of everyone a consistent, clear and compelling vision of the benefit to be achieved for the organization and its stakeholders. While it is important to communicate what you know, it is equally important not to communicate things that are not yet decided. In those instances, it helps to communicate the principles and values that will guide the decision-making process and the organization’s approach to those who might be affected by the change.
💡 Your organization needs transformational leaders.
The healthcare environment is more turbulent than ever, demanding nothing short of transformational change. To meet this challenge, organizations need exceptional leaders skilled in designing and executing a blueprint for success amidst rapid and dramatic change.
Have you considered engaging an executive coach to help develop those individual and team skills? Learn why your peers choose MEDI Leadership, and what’s possible for your leaders and organization.
