How To Survive and Thrive in an Age of Mergers and Acquisitions

How To Survive and Thrive in an Age of Mergers and Acquisitions

Practical Guidance for Marketers and Planners Trying to Navigate Change

By Lee Ann Lambdin

Healthcare mergers and acquisitions across the US continue at a rapid pace. According to Becker's Hospital Review, about $2.35 trillion in deals occurred globally [in 2018], up 57 percent compared to the same period last year. “Whether it’s hospitals buying up independent medical practices, hospital systems swallowing one another, or insurance companies merging with pharmacy chains, the prevailing attitude now is that bigger is better,” Medical Economics.

Gist Healthcare recently shared this graphic, which highlights how consolidated the hospital sector has become. Gist’s graphic displays how health systems account for more than 90 percent of all discharges in the US, with the largest 11 systems accounting for a quarter of discharges, and the largest 67 accounting for half. 

How can healthcare strategic planners and marketers stay focused, yet flexible, during these times of consolidation and change? This post provides practical tips for how to deal with the inevitable challenges that will come during an integration. Key elements include: 

  • Uniting separate strategies
  • Managing and merging multiple brands
  • Using your influence to affect change

Keep reading for recommendations in each of these areas. Armed with these insights, you may be able to preemptively address issues before they become problems.

 

We’re Merging! Now What? 

“The assimilation of two distinct organizations is really hard,” said Rob Austin, director of Healthcare Consulting for Navigant and leading expert in the firm's Performance Excellence group. Inherent in this blending process is the uniting of strategies and merging of brands, neither of which can be done without strong leadership and the help of internal stakeholders willing to exemplify positivity. Let’s discuss in more detail how to encourage a peaceful and successful merger.

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Uniting Separate Strategies

As organizations come together, the originally separate marketing and planning teams will come to the table with their own versions of how to move forward. Based on the past and how things “have always been done” teams will likely be hesitant to give up what they know to take on another team’s idea of how to operate. Rather than forcing one team to give in to another, this could be the perfect time to reassess both strategies and develop a new, united plan for the future. 

“Mergers and acquisitions can be a fabulous opportunity for you to reset the strategic direction of your organization,” Tammy Graves, Healthcare Principal Consultant with Point B  shares in Healthcare Success.

More than likely, each team has some campaigns and tactics that have been very successful and a few others that have produced mediocre results. Recognizing that each group will bring strengths and weaknesses to the table, you can begin the unification process:

  • Encourage each team to bring examples of campaigns and plans that have generated positive results, along with a few areas where there is an opportunity for improvement.
  • While there may be overlap—both teams may have executed excellent growth campaigns for orthopedics, for example—it’s likely that each team has areas where they shine that are compatible and complementary to the other.  
  • Choose the best strategies from each team and look for opportunities to create a superior strategy that unities the best from each team’s efforts.  

Be sure to not favor one team’s ideas too heavily over the other. This can lead to resentment and lingering frustration. As much as possible, pull from the best of both and land on a unified approach that each team can happily support. 

 

Managing and Merging Brands

Merging two brands can be especially tricky. But the good news, as stated by creative agency Fabrik, is that “a great brand with a distinct set of values can help to unite workforces, cultures, and mindsets...bringing employees together with a specific purpose.” The key is to have a realistic view of each distinct brand’s current reputation and a well-designed roadmap for how to develop a united, future brand. Here are a few suggestions to guide you in this endeavor:

  • Work with key marketing leadership from both organizations to determine the right approach to merging your brands. In this post, Fabrik recommends four merging brand options:
  1. Retain the identity of both companies after the merger so that the marketplace continues to see both names as separate entities as far as branding goes. This is the strategy used most often for companies who have highly differentiated personalities.
  2. The brand fusion of identifying distinct sticking points where the companies can link together. A fusion works best when the two businesses have similar purposes or brand visions, to begin with.
  3. The “stronger horse” strategy of elevating one better-known brand over the other. Generally, this happens when one of the companies in the merger has better equity, potential, or a stronger customer base.
  4. The new brand strategy where you create an entirely new entity. This can be the best step forward for some companies who are planning on undergoing a significant transformation. 
  • Once you land on which approach is the best one for your merging organizations, it will be helpful to then create a style guide that reflects your new brand identity. Be sure this is widely distributed internally, and that everyone fully understands why this was the best direction for your new identity. 
  • Finally, develop a strategy for external and internal communication. Your new brand identity must connect with and engage your market if you have any hope of success. If you don’t have an internal publicity team well-versed in mergers and acquisitions, consider bringing a team on who has the experience to handle this sensitive and delicate process.

 

Using Your Influence

Everyone is in a position of influence when it comes to uniting organizations. Negative and divisive “water-cooler talk” can sink an organization from within, faster than any bad publicity. If you want your organization to succeed and make it through a transition of this kind, it’s critical that everyone leads with positivity and an open mind. Those in leadership positions must set this example and then encourage team members to do the same.

“A lot of people assume that the current structure is perfect and what someone else is doing is wrong. Really open your mind and be willing to learn and understand,” Karina Jennings, Assistant Vice President of Marketing and Communication at Providence Health and Services shares in Healthcare Success.

Here are some ways you can leverage your influence for good:

  • We all know that an influencer isn’t always the person with the biggest title. In fact, often it's not. So no matter your role set the right example in how you talk about the changes taking place. Look for opportunities to be positive, rather than always focusing on what’s wrong.
  • Your c-suite will likely be looking to identify influencers who can help to smooth out the rough edges that come with a change. See this as an opportunity to stand out as someone willing to do what’s best for the organization. It could pay off in the form of a promotion down the road.
  • If there are issues that need to be addressed, take them to the leaders who need to be aware, rather than discussing them amongst your peers. If you feel strongly that your company is moving in the wrong direction and truly feel you’ve done all you can in taking matters to leadership, then your best move may be to dust off your resume and find new employment. Better to move on peacefully then stay somewhere and be disgruntled.

 

The Takeaway

A hospital merger or acquisition is a time of major change and transition. With so many jobs impacted by such a move, there are bound to be challenges. With a strong strategy and the right mindset, your collective teams will have a greater chance of achieving together what cannot be done alone. 

For more information about how you can leverage Stratasan’s strategic services to increase your organizational alignment and improve your growth strategy, schedule a discovery call with one of our experts today.

Article by Lee Ann Lambdin, SVP Healthcare Strategy for Stratasan

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