Creating a single operational culture after a merger

About 15 years ago, Damian Skelton was the facilities director of a hospital that was being acquired by another health care organization. He remembers well his interactions with the new leaders — some of them were positive, others negative.

“What was successful was when we came together in a room and had discussions, and agreed on the pathways forward,” says Skelton, who now is area vice president for Medxcel, a company that provides facilities management services to health care organizations. “On the other hand, we struggled when someone came into a room and said, ‘We’re here, and we’re going to put this program into place.’ The emotion was that, ‘We’re here because you can’t do it.’”

The contrast that Skelton observed — between an approach that emphasizes collaboration and one that implies a takeover — reflects the cultural struggle many merging health care organizations face. When two cultures combine, challenges are inevitable.

“Over time, it worked out well,” Skelton remembers. “In general, the approach was collaborative and embraced the best of both organizations.”

Merging cultures

When health care organizations merge, the union of the facilities departments is rarely at the top of the leaders’ list of priorities. The press release touts the clinical advantages and community reach the merger will provide, not that XYZ Hospital is going to learn a new way to prepare for accreditation surveys.

“Usually the facilities department of a hospital being acquired gets just a quick assessment before a merger and typically at the last minute because everything is confidential until it’s a done deal,” says Don D. King, president of Donald King Consulting and a 40-year veteran of the health care facilities management field.

Nevertheless, the overall success of a merger can be seriously affected if the staff of the facilities department of the acquired hospital feels mistreated or forced to adapt to new ways without due consideration. An organization’s culture is powerful, and disrespecting it can be costly.

With that in mind, here are nine tips for a successful merger of facilities department cultures from both the perspectives of the organization making the acquisition and the organization being acquired.

Tips for the acquirer

The leaders of the facilities department on the acquiring side of a merger need to be sensitive to the situation of their colleagues on the other side of the deal. The long-term success of the merger will be facilitated by a respectful, communicative approach. Tips include:

Don’t be a bully.  Nobody responds well to the bully who shows up and takes over. In a merger, the facilities staff of the hospital being acquired is already stressed and worried about their jobs, so sensitivity is required.

“You have to spend a lot of time building trust,” says Skip Smith, vice president of physical asset services for Catholic Health Initiatives, who has seen his organization grow from 55 hospitals to 101 in the 17 years he’s been there. “That’s why being respectful of the organization’s culture is important. If you think you can walk in and tell people what to do because your organization is bigger or has more breadth, you’re wrong. People will be polite about it, but it doesn’t get you anywhere.”

The key issue to remember is that the current staff almost certainly know more about the hospital. Respecting them and their culture is more likely to lead to cooperation as the transition progresses.

“Our approach has always been to go and meet the folks where they are,” says Skelton, whose service organization does not acquire hospitals, but routinely takes over existing facilities departments when they are brought on to run them. “We have to be cognizant of the fact that they’re skilled in facilities management and know their facility well. We never come in right away and change everything.”

Take time to get to know them.  Before imposing their own culture, experienced acquirers take the time to learn about the people, culture, needs and strengths of the facilities department they are taking over.

“The first thing I tell them is, ‘You know a lot more about your facility and patients than we do, so share what’s working well and what’s not working well,’” King says. “I ask them, ‘What three things are horrible about your department? And what are three stellar examples of your performance?’ It’s always best to listen first, ask good questions and observe their culture.”

Another step King suggests is to jointly develop an “ideal 90-day scenario” with the facilities leaders of the hospital being acquired. That scenario should then be co-presented to the C-suite by the new and existing leaders, so that a partnership is created.

“That way if someone asks, you can both say, ‘Yes, I agree.’ And then you back in to what you need to get to that ideal scenario,” King says.

As facility professionals coming into acquired facilities learn about the acquired organization, they may determine that certain people have more influence than others, even if they are not the formal leaders. It’s good to develop relationships with them.

“You have to be aware of both the formal and informal leaders and their processes for getting things done,” Smith says. “You have to understand who the informal leaders are, and who can influence change as you’re integrating.”

After identifying the informal leaders and other vital staff of the facilities department, facility professionals should develop a plan for keeping them. A merger presents an opportunity for knowledgeable, talented people to jump ship, so losing key people can be a danger.

“Make sure you don’t give them cause to leave,” King says. “And if there are key people who don’t work directly for you, make sure you develop a relationship with their boss and say, ‘Please don’t make a change without talking to me first.’”

Be open to learning.  The facilities department of the hospital being acquired has a culture, policies and procedures that probably have been honed for many years, and it’s possible they are doing something better than the organization making the acquisition. It’s worthwhile to be open to learning from them.

“In some cases, we’ve shown up and found a practice that was better than what we have and, in some cases, we’ve incorporated that,” Skelton says. For example, he says one 13-hospital system that Medxcel went into had developed a safety organization that included experts in key areas, such as hazardous materials management, who circulated among the hospitals so that each could benefit from that expertise. The system worked so well that Medxcel introduced it to other facilities departments they operate.

Show them that the new organization can help. It’s probable that the facilities of the hospital being acquired need attention in one area or another, so a good way to facilitate the union of the cultures is to offer resources to improve those areas.

Tim Adams, FASHE, CHFM, CHC, director of leadership development for the American Society for Healthcare Engineering (ASHE), who previously worked for a health care organization that acquired several others, remembers meeting the facilities leader of one of those acquisitions.

“I got to know him and what his needs were, and we developed a great relationship,” Adams says. “The systems and support we provided allowed them to do some things they had wanted to do, but weren’t able to before. For example, they had done a fantastic job of maintaining their infrastructure with the resources they had available, but they had some very old systems that were beyond the end of their useful lives. We were able to help facilitate the upgrade of that infrastructure.”

Smith echoes that advice, “If you can find those areas where they are struggling and utilize your program to accelerate improvement, they get it. They get to look like the winner. Then you’re getting them to buy into the ability to change based on influence rather than position.”

Build a joint culture. Sometimes creating an entirely new culture can unite the organizations.

Roger Bradley, CHFM, CHC, regional director of facilities for BayCare Integrated Service Center in Tampa, Fla., helped to do just that when he was involved in a merger among three Indiana health care organizations.

“We decided to work with the strengths of all three to create our own unique culture,” Bradley says. “We created our own mission and vision statement, which was different from those of the hospitals. And once we did that, we were able to set priorities as far as what we would do as a department to fulfill that mission and vision. It made us unique; we created our own culture.”

Be flexible. Finally, facility professionals should remember that every situation is different, and that being able to handle a fluid situation with flexibility will pay off. “Each department is unique, so you can’t make this into a cookie-cutter situation,” Bradley says. “You have to understand that things won’t always work the way you planned. You have to be ready to turn around and go in a different direction.”

Tips for the acquired

What if a facility professional is on the other side of this situation? He or she can help to create a smooth transition and boost his or her own career by recognizing the potential upside and helping new colleagues learn about the facility. Three tips are:

Recognize the opportunity. If a hospital is being acquired, a facility professional’s first reaction, naturally, is to worry about his or her job. However, sometimes a merger spells opportunity for personnel of the hospital being acquired, so it pays to keep an open mind.

“Sometimes fear and anxiety about what’s going to happen are the first emotions,” Adams says. “But along with that, sometimes come great opportunities, such as a whole new career ladder. When a larger organization takes over, there are often new corporate-level positions available.”

For example, Adams says a facility professional who has been handling property and real estate management at the local level for one hospital may suddenly become an ideal candidate for that kind of a position on a regional or even national level.

And, of course, the new leaders may be able to provide resources to improve operations. Typically, a merger involves some level of improvement in facilities, so a merger may present the opportunity to tackle a list of projects that weren’t getting done because of lack of funds.

Maintain focus.  Don’t let an impending change in ownership take attention away from the job at hand. Sometimes knowing that new bosses will arrive soon makes health facility professionals want to sit and wait, but it’s important to keep things moving forward. “Don’t lose sight of the mission of the organization,” Adams stresses. “Keep your focus on caring for the people, because that probably is common with the mission of the larger organization. Remember to keep your focus on excellence.”

Bradley says that when he was involved in the Indiana merger, the staff of the facilities departments being acquired initially feared that the new leadership would put forth “flavor-of-the-day” changes that wouldn’t last, and weren’t enthusiastic. That changed when they realized the changes were solid.

They were very apprehensive with the possibility of change at first, but once they saw that [those changes] were positive, they embraced them,” Bradley remembers.

Share information.  Communication is key to a successful melding of cultures. If the acquired hospital’s staff clams up with fear, they will have much less input into the coming changes.

“What I sometimes see happen is a lot of folks try to pull back and not be forthcoming with information,” Adams says. “They’re trying to protect their territory, and that usually doesn’t end well. I think the more people in the larger organization see you as a resource who wants to share information and support the mission, the better your future will be.”

Sharing information can be particularly hard for leaders of the acquired hospital’s facilities department. They probably have been used to making decisions on their own and now they are being imposed.

“If you’re part of a small health care system or stand-alone hospital, you’ve kind of had your way of doing things, and now there are decisions being made someplace else,” Adams says. “That can be a challenge. But as you get immersed in the new organization, it can all start to come together.”

Integrating cultures

Mergers and acquisitions are challenging at many levels but tackling the cultural side of things can be the most important move.

“Integrating the cultures starts even before we start discussing integration of the programs,” Smith says. “It starts with understanding the cultures of the organizations that are coming together, and how they are going to work together going forward. You need to think about the cultural aspects before you think about the nuts and bolts.”

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Ed Avis is a freelance writer based in Chicago.