A shared vision with three critical tests decided on by the various leaders involved is critical to calming the choppy waters of a merger, writes Graham Atkins.

Mergers have always been a feature of health service life, but with some trusts struggling to achieve foundation status, others integrating with community health, and a few with questions of financial viability, many more may be on the horizon.

Much has been written about mergers, especially using private sector comparisons. However, a lot of this guidance ignores a crucial factor in determining their success; leadership. Leaders in both organisations need to have a shared vision, values and outcomes. And exploring the unwritten, seemingly intangible people issues is crucial for success. After all, if the leaders don’t have faith in the merger, how could it possibly be a success?

Pre-merger

Let’s go back to basics. Two organisations need to work together to become one, potentially an acquirer (if a foundation), and an acquired (non-foundation). The NHS uses the language of equals – “merger” – but let us not pretend that all mergers in the current climate are actually that.

Foundations are classically seen as high-performing, well respected and ambitious. They will have a clear set of concerns and considerations when embarking on a merger; have the benefits been clearly and realistically defined? Will the vision and values of the new organisation be shared and compelling? How do the board gain shared ownership? How do we create and role model one new organisational culture?

Leaders of a non-FT or a set of community services will have different concerns. What is my part of this? Will I have a job? How can my organisation be positioned to add value, and not just be absorbed? How can the services and talent that deliver good outcomes be integrated into the “new” organisation and appropriately protected? How do we maintain staff engagement and retain key people?

In one pair of trusts, after months of hard work on merger planning it was decided they could not work together. This was because they did not have a shared vision for a new joined organisation that could meet one or more of three critical tests:

  1. demonstrable improved health outcomes;
  2. demonstrable improved patient experience;
  3. significant efficiency improvements (far outweighing the cost of merger).

A challenge for the leadership of both sides is to ensure the merger is driven by these factors, above all else. Research has shown that only 9 per cent of mergers completely deliver on their objectives, and one of the principal reasons is insufficient attention paid to these “intangible” people issues.

During merger

So, a shared vision has been agreed, benefits have been outlined, and it is full steam ahead. In the first 100 days of a merger there is much to do and it is tempting for leaders to focus entirely on the practicalities. But leadership vacuums are a prime cause of failure (where managers are left to create clarity for themselves in the absence of anything else).

To avoid this, swift decisions must be made about the shape of the board and executive team. This must be announced publicly, preferably using the best people from each organisation to establish a stable, cohesive top team. It is then crucial to invest in the development of this team as a single effective entity.

Ideally the organisation will appoint a senior, experienced leader for the integration programme. This is inherently a diverse, politically charged and challenging role driven by the executive team and often offers a great proving ground for aspirant chief executives.

Post-merger

The first assessment should be to take a step back – have the initial planned benefits been achieved? Are we on track to see improved health outcomes, a better patient experience and/or significant efficiency improvements? Do both organisations feel like they’ve realised what they set out to do and is a culture of one new organisation being developed?

It is logical, less risky and frankly easier to “transition” rather than “transform”. But this approach is likely to result in greater uncertainty for staff. It is sobering that several recent high-profile failures have been trusts with mergers in their past that perhaps had not created a new shared ethos and culture.

We have witnessed examples of this, such as two photocopiers sitting side-by-side from legacy organisations, two years post-merger, or letter-headed paper not being changed. Effort needs to be invested in the rules, rituals, rewards and role models and to secure the benefits in the original business case.

Let us put ourselves in the minds of executives working in a non-foundation about to be merged into one. It feels pretty awful to perhaps be labelled as failing or weak. So even when an FT provides an opportunity with a good business case that meets our three critical tests it will still feel painful.

A good result would be to feel respected, heard and seen as a significant contributor to the creation of one new, stronger, organisation. In practical terms, that means allowing leaders to demonstrate their abilities, being part of a single, united team and taking on the challenge of transforming the new organisation, not just transitioning it.

By doing these things people will feel more confident, trusting, and collaborative, and put in the extra effort required to make a success of a merger. And that can only be a good thing for all concerned.

Tips for FT leaders

Pre-merger

  • Take time to understand the true value of the services you are gaining
  • Undertake a leadership audit – how good is the talent? Who do you need to keep?
  • Focus on communication and engagement

During merger

  • Appoint the top team as soon as possible
  • Appoint an experienced integration leader and dedicated team
  • Link everything you do to a shared common vision and values
  • Be seen to be fair and open in decision making

Post-merger

  • Focus on embedding a common culture, shared vision and values
  • Actively demonstrate recognition of all services and staff, regardless of which organisation they are “from”
  • Role model “one new culture” and hold others to account for doing the same

 

Tips for non-FT leaders

Pre-merger

  • Once the decision to merge is made, don’t fight it – engage from day one
  • Identify the talent in your organisation and promote their abilities
  • Showcase the services and staff that achieve the best outcomes for patients

During merger

  • Set the tone for your staff of co-operation and engagement in the process
  • Role model actions to make the integration happen smoothly
  • Communicate consistently and transparently what you know as it happens – avoid the rumour mill

Post-merger

  • Focus on embedding a common culture, shared vision and values
  • Do not focus, or allow others to, on the past
  • Role model “one new culture” and hold others to account for doing the same