A new era of NHS mergers is upon us. But lessons from the business world show that they can be painful and uncomfortable. Steve Downing outlines a theatrical route to tackling the problems

A new era of NHS mergers is upon us. But lessons from the business world show that they can be painful and uncomfortable. Steve Downing outlines a theatrical route to tackling the problems

In 2005 there were 32,568 mergers and acquisitions in the global business sector, valued at over $2.7 trillion. But research suggests at least half of these fail to achieve management goals.

In the past this would have been of only academic interest to the NHS - but the proposed acquisition of Good Hope Hospital trust by Heart of England foundation trust (currently awaiting government approval), could be the start of a wave of NHS mergers.

There is high enthusiasm in the health service and government that mergers and acquisitions could be a relatively pain-free solution to the restructuring of inefficient local services.

But there are huge challenges for organisations in any sector. There is no shortage of advice on managing mergers from academics and consultants. Top of many lists are recommendations to: focus on desired synergies; involve those who must implement the change in the planning process; communicate to reduce uncertainty and gossip; manage selection for roles and redundancies transparently and on merit; reward desired behaviours; and be sensitive to cultural differences.

The SENSE (storylines, emplotment, narrative structure, enactment) framework, which I sumarise here, provides an original and highly effective way of looking at mergers. It deals in particular with culture clashes that can arise from a toxic mix of emotions, egos and politics, fuelled by conversations between staff and a sense of drama.

The framework describes this process in a way that enables you to read the unfolding dynamics of mergers and take action to bring about a happy ending.

Culture is defined by the nature of conversations between staff. Hence the stories about mergers are very important. They are the main way new arrangements are established and judged to be fair or foul.

The SENSE framework shows how shared stories develop a dramatic momentum that shapes understanding and action. Shared stories have a tendency to follow particular generic lines. In unsuccessful mergers it is very common for individuals to enact a 'them and us' contest between 'goodies and baddies', or a 'scam' where the strategy or senior team is judged to be lacking credibility.

But in order for a merger to be successful, the stories that staff and stakeholders tell one another must support change.

The framework below can help managers understand and influence the dynamics of the social drama that mergers produce.

The SENSE framework

SENSE has four elements:

Storylines:These are the stories that are remembered and repeated by groups. They tend to be emotionally charged; to express local 'feel good' and 'feel bad' factors. People generate shared storylines out of news and gossip. During organisational change, the more uncertainty there is, the more time people spend asking 'have you heard?' and 'what's going on?'.

Often the underlying issues that determine storylines are perceptions of unfairness and incompetence. These are often subjective, but this is how groups begin to collectively make sense of an acquisition or merger.

Emplotment:This deals with the underlying question of 'how is this all going to end up?'. This is a natural question. We look forward and adjust our behaviour according to how we think things will turn out.

If storylines focus on the sacking of a boss and closure of a department, reactions depend on how fair and effective these actions are perceived to be.

Staff may see a merger as the beginning of the end, and start looking for a new job elsewhere. Or they may see it as the beginning of a great revival. The emotional momentum of storylines tends to dictate the nature of emplotment.

There are four generic plots: the quest, the scam, the downfall and the contest. A quest is romantic. It describes a structure where a central character challenges the status quo, has set-backs, and ultimately succeeds. This is a plot of progress and adventure. In organisations we plot at many levels, so an individual, group or organisation can be the central 'character' in a plot. Richard Branson and the Virgin brand are a good example.

Most formal goals for mergers resemble a quest: 'we will transform the way of doing X and become the leading service provider'. Whether or not stakeholders share the quest plot will depend on their storylines.

The scam is when an individual, group or organisation turns out to be incompetent, corrupt or foolish. In these circumstances stakeholders might bide their time and wait for the incompetence to be exposed. If things are particularly bad, people may vote with their feet and quit.

In the downfall plot, the central figure is undermined by bad luck or a fatal flaw. If negative storylines move stakeholders to this plot they often fear and precipitate failure by withdrawing support or resources.

The contest is probably the most widely experienced by failing mergers. Here different stakeholders frame each other as 'goodies and baddies' and, moved by self-righteous anger, scheme for the destruction of the others. But as we have seen, they are not the only pattern for the destruction of trust and value in mergers.

Narrative structure:The third element of the SENSE framework refers to the way, over time, plots are elaborated and 'proven' by selecting evidence from storylines. This will typically answer the questions of why, what, how, who, when and where. This is an account of the motives and purpose of a merger, and we naturally seek to link these elements and be seen as someone who knows what is going on.

Enactment:The final part of the framework is the point described above: that storylines, emplotment and narrative structure inform the actions that will determine the success or failure of a merger.

How to influence the drama

The commitment, loyalty, trust and advocacy of a trust's staff and other stakeholders depends on the way they make sense of storylines, emplotment and narrative structure. Effective change agents in mergers are attuned to these processes.

Skilled implementers of mergers are emotionally attuned to the quest, in both what they say and how they say it; they communicate the sense of adventure, purpose, challenge, and set-back; and the promise of a harmonious new status quo.

To influence this process without excessively micromanaging it, effective implementers constantly stay attuned to the storylines that develop daily.

They do not let the information they receive become filtered. They stay close to the 'interaction' and listen for the underlying issues, emotions and plot before they act. They respond to negative emotions to prevent them from gaining momentum.

Hence change agents need considerable skills; empathy and detachment; a clear view of the range of emotions at play; and the ability to respond to local as well as broad organisational issues.

If these skills are not widely understood and practised, NHS mergers could well be setting themselves up for failure.

Dr Steve Downing is an associate professor in strategy at Henley Management College and founder of Alive Strategy Limited.

steve.downing@henleymc.ac.uk