Accelerating a Common Culture, Especially after Mergers, Acquisitions

"Nearly three years ago, my health system merged with another system in our market [but] . . . we still occasionally hear 'we/they' comments, particularly among the longer-tenured staff. What suggestions can you provide in addition to what we have implemented so that we can accelerate our common culture?"

The question above was recently shared by a health care CEO as part of a feature called “Dear Chuck” in Becker’s Hospital Review. Charles (Chuck) Lauer, the former publisher of Modern Healthcare magazine, gives the reader advice to conduct activities such as staff retreats, executive rounding, public relations campaigns, and shared service projects (e.g., on improving patient satisfaction) to accelerate the common culture after a merger or acquisition.

I’d like to add one more: check out the Baldrige Excellence Framework and its Criteria.

“The Baldrige Criteria are fundamental to how we lead our organization. In fact, they served as a very helpful blueprint during a recent acquisition of another hospital. They provided a framework for designing the new health care system,” said Sue (Reinoehl) Birch, senior vice president strategy and communications, for Baldrige Award recipient Bronson Healthcare, in a Baldrige blog entitled “Sustaining Excellence: Merging, Avoiding Folk Lore, and Hardwiring in Health Care.”

Birch added, “In our industry, everyone is merging with everybody, from physicians’ offices to hospitals to payors to health systems. So, how do you take separate cultures and merge them together? The Baldrige Criteria gave us the roadmap we needed to create a new organizational culture when we were faced with adding a hospital and bringing together two separate organizations. . . . We used the processes in the Criteria to create a plan for mergers. It’s amazing how the Criteria actually worked to give us the necessary focus and processes. Once merged, everyone needs to be oriented to a new culture. Baldrige guided our processes and structure for that, too.”

Baldrige also provided a framework for Baldrige Award recipient Stoner, a manufacturing and sales company of cleaners, lubricants, coatings, car care products, and a premium glass cleaner called Invisible Glass, to more effectively integrate its acquisitions and to evaluate the business potential of other acquisitions, said CEO Rob Marchalonis, in a Baldrige blog entitled "Small Businesses: Doubling Revenue Growth with Baldrige Framework." He said being named a Baldrige Award recipient helped give Stoner performance excellence credentials, and the owners/founders of its acquisitions often have become Stoner’s best salespeople.

The Baldrige Criteria also helped the small business in other facets of its business model. Baldrige forced the company to look at its methods, processes, and customer and employee satisfaction and engagement, Marchalonis said. Before Baldrige, Stoner focused entirely on its financial and product outcomes, but Baldrige helped it to improve its overall system by differentiating operational efficiencies and conducting lots of benchmarking, he added.

“The Baldrige Criteria help with . . . creating a culture that is not just a set a tools to make changes—it’s actually a culture of how you do business and how you work and what you value,” said Robert “Rusty” Patterson, chairman and CEO of the National Council for Advanced Manufacturing, in a Baldrige blog entitled "Envisioning the Future for Long-Term Sustainability--How Baldrige Examiners Can Help." He noted that Baldrige has a set of Core Values, principles that high-performing organizations can follow. One important lesson from decades past, he said, is that you can have a toolbox and fix everything, but you need to establish a culture with common, shared values to make those changes last.

Patterson said he learned the hard way about the difficulties of not having a common culture and core values through his experience with a large merger in the defense industry. Multiple companies were brought together, but the new workforce had different vantage points. “We were in a situation where we realized we couldn’t even figure out how to go and improve something because we each did [it differently. Eventually] we created a common culture, but it was out of necessity, and it was forced on us.”

He added, “I believe most people want to do a good job . . . but if you don’t have that common culture then it’s hard to ever pull that off. I’ve done a lot of improvement activities in my career in different facilities where the CEO was detached from what was going on. He would say . . . just go fix that, but those fixes don’t last. . . . You can get some results immediately, but two–three years later, they’re starting to fall off and go away because there’s no supporting mechanism.” How to establish the culture you want is not just imperative during mergers and acquisitions but to overall business success. And creating culture has been the subject of numerous Baldrige blogs; for example,

• "Baldrige is Answer to How to Create the Culture You Need"
• "Ritz-Carlton Practices for Building a World-Class Service Culture"
• "Culture Leads to Strategic Expansion and Enhanced Customer Relationships"
• "Does Your Organization have a Culture of Quality?"
• "Changing Culture: Insights from a 2010 Baldrige Award Winner"
• "The Secret of Success . . . It’s All About the Culture"
• "Freese and Nichols: A Client-Focused Culture Leads to Loyalty"

What are your tips for building, and accelerating, a common culture?