Mergers and acquisitions are disruptive to the project collaborators. The project represents a change process that requires effective management to ensure appropriate integration of different aspects of the two organizations. For hospitals, continuity of operations during the integration process is integral, with particular emphasis placed on quality and safety considerations during healthcare service delivery. In its recent report, Deloitte Center for Health Solutions and Healthcare Financial Management Association identified two crucial elements of a successful merger and acquisition process: early introduction of integration team leaders into the transaction process; and deployment of best-practice project management techniques (Deloitte, 2017). The proposal offers recommendations for implementation of the two steps, and highlights the implications of failure to observe them.
Incorporation of the Identified Aspects
Deloitte identifies the early introduction of team leaders into the transition process and implementation of best project management strategies as critical to achieving valuable outcomes during mergers and acquisitions. The purpose of early introduction of team leaders is to facilitate the transition process during the merger. In most cases, the team comprises of consultants with exceptional knowledge of the hospital market dynamics. However, a third party may not be a necessity if the institutions have competent teams to oversee the transaction process. According to Bergamin and Braun (2018), success of integration management is dependent on how quickly the business resumes operations. Therefore, the integration process requires early planning that translates the deal into a focused strategy and operating model. Setting a timeline is imperative with six months considered sufficient to integrate support systems. The speed of integration requires consideration with emphasis on the scope of the transaction and quality implications. In this regard, successful introduction of the team involves the development of a team charter. The document categorically defines the teams, purpose, creates structure, and articulates the expected team outcomes. A team charter establishes clarity about the direction to which the team is headed. Development of a team charter takes into consideration the vision of the new organization following the merger, highlights team values, clarifies objectives, operations, and communication and coordination strategies It also presents the composition and roles, authority and accountability, and resources and support available to facilitate a successful transaction process.
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Deloitte (2017) observed that deployment of best practice project management begins with the development and validation of the strategic rationale, operation model, and integration plan. The report advocates for a multidisciplinary team to oversee clinical and business functions of the merger. The team is responsible for planning integration work streams, generating regular updates, and communication. The team will also be involved in setting up frameworks for risk analysis and management, strategies for change management if the merger fails, and ensuring transparency and accountability.
Justification of the Application of Identified Aspects
The objective for effective integration management is to put in place human resources management strategies to ensure success during the hospitals merger and acquisition. Mergers and acquisitions, like any change process, generate anxiety and uncertainty with the potential to derail the transaction process. Allaying employees’ fears during mergers and acquisitions is a very important factor achievable through early integration of the teams. Through integration, it is possible to establish a common goal and build a sense of collaboration between teams. Synergy is essential in the success of hospital operations post the merger. The process allows development of a common organizational culture by encouraging cultural integration. These aspects must be addressed regardless of whether the merger and acquisition goal is strategic expansion, expansion to new market, or addition of operational resources. Overall, integration managers are central to the M&A process, they address time constraints, create structure for the process, forge social connection between collaborators, and assist to engineer short term successes that yield results.
Badewi (2016) noted that effective project management practices have the potential to influence project success and influence project investment success. These are important attributes for organizations undertaking mergers and acquisitions. Badewi (2016) recognizes the need to focus on best practices in project management rather than business management. The practices seek to ensure conformity with new project and organizational objectives and goals. The motive for undertaking such practices is to bring all stakeholders under one roof in relation to understanding of the project. The process facilitates the development of risk response team and strategies, formalization of roles, development of competencies, development of quality standards, and monitoring of all project areas.
Consequences of Failure to Incorporate Identified Aspects
In some cases, the chances of failure of mergers and acquisitions are high, developments that Koi-Akrofi (2016) attributes to poor strategic rationale, culture clashes, communication and leadership difficulties, poor integration, and planning and execution. These factors highlight the ineffectiveness in implementation of best practices used in managing the project. The scenario occurs when collaborators fail to recognize the importance of early integration and implementation of best practices. Poor integration leads to lack of understanding of the project’s deliverables because it implies the collaborators assumed this aspect. The result would be disengagement, disgruntlement, and collapse of communication. Elevation in employee uncertainty about the change and its effects on their jobs and roles can be a source of resistance that hinders success. Moreover, failed integration means inability to coordinate the aspect of best practices in project management, which sets up the merger for eventual failure.
Conclusion
The merger and acquisition presents the hospital with new potential and opportunities. However, success of the project is dependent on recognition of the need for integration and implementation of best practices in project management. This paper identifies soliciting services of a third party with understanding of the working dynamics of the market and the project as the best approach to success. A consultant understands the need for a multidisciplinary team during the integration phase. Allowing collaborators to have a common understanding of organizational rationale is the most effective way of facilitating the implementation of best practices in managing the project. Without a team that is ready to work together, project goals remain a mirage and failure of the merger becomes inevitable.
References
Badewi, A. (2016). The impact of project management (PM) and benefits management (BM) practices on project success: Towards developing a project benefits governance framework. International Journal of Project Management , 34 (4), 761-778.
Bergamin, S., & Braun, M. (2018). Integration management in mergers and acquisitions: Success factors and pitfalls. In Mergers and Acquisitions (pp. 1-31). Springer, Cham.
Deloitte. (2017). Hospital M&A: When done well, M&A can achieve valuable outcomes. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-health-care/us-lshc-hospital-mergers-and-acquisitions.pdf
Koi-Akrofi, G. Y. (2016). Mergers and acquisitions failure rates and perspectives on why they fail. International Journal of Innovation and Applied Studies , 17 (1), 150-158.
