Leadership teams need to make critical end-state decisions ahead of close for complex integrations, especially when they are combined with transformational initiatives. Establishing the architecture for integration and transformation, setting culture priorities, aligning on the new operating model, and determining the leadership and board structure are all important steps in healthcare m&a.
Organizations setting ambitious targets for growth and cost synergies are critical to value capture because they set the bar for the rest of the transformation. It may take time and effort for organizations that rely on consensus-driven decision-making to shift to a transformation mindset. The initial scope of healthcare m&a must be sufficiently broad across functions. In order to lay the groundwork for a transformation approach, it is necessary to understand the legacy governance structures and processes of both organizations.
It is crucial to minimize disruptions to consumers and customers throughout planning and implementation. For organizations providing direct patient care and/or member experiences, this is especially critical. Business and transformative integration demands must be dynamically balanced by functional leaders. The COVID-19 pandemic has increased staff burnout, so it is imperative that changes impacting frontline staff are communicated clearly and implemented thoughtfully throughout the process. The creation of a positive working environment for staff will reduce turnover, which reduces disruption for consumers while protecting patient and member satisfaction.
Integrating and transforming legacy organizations can be difficult without a change in culture. Merging can drastically alter the culture of one or both legacy organizations, leading to apprehension and uncertainty among employees. In the absence of cultural challenges, critical talent can be lost and operating models or value-capture goals can never be realized. It is imperative for organizations to share a shared culture and approach to working, and for leaders to consistently model the case for change in order to transform and sustain the operating model.
There needs to be both alignment and tailoring of messages to different stakeholders based on the deal rationale. In order to inspire and challenge leaders to execute the vision for the new organization, organizations benefit from utilizing change stories to explain the “why,” “what,” and “how” of the transformative integration. When the message of the change story is defined early, it builds conviction and momentum.
It is the responsibility of the Integration and Transformation Management Office to ensure the success of a program, and for that reason, it must be able to make decisions within the scope of the program, control the pace of integration, challenge functional teams to achieve impact and to influence and support C-level and business unit leaders to make timely decisions.