Throughout the year, we’ve been covering the brisk pace of mergers and acquisitions (M&A) in the health and human service industry. In 2012 there were 86 transactions in the behavioral health and social service field, marking a 200% increase over seven years ( M&A Activity Snapshot all members); and it looks like 2013 will be another record year.
What does it take to weather the disruptive nature of M&A? Today at the 2013 OPEN MINDS Executive Leadership Retreat, we discussed mergers with two executives who have “been there”—Howard Shiffman, Former Chief Executive Officer, Griffith Centers for Children, and OPEN MINDS Senior Associate; and Jess Jamieson, Ph.D., Former Chief Executive Officer, Western State Hospital & Compass Behavioral Health, and OPEN MINDS Senior Associate—and session moderator Jonathan Evans, Chief Executive Officer, Safe Harbor & OPEN MINDS Advisory Board Member. I wanted to share a few of their comments to our executive attendees:
Howard Shiffman, Former Chief Executive Officer, Griffith Centers for Children, and OPEN MINDS Senior Associate – Marriage is a good analogy for the merger process, but keep in mind that there is no match.com to help you find the perfect merger partner. Divorce is painful and expensive, so you must be sure about your partner before you begin your collaboration. You shouldn’t just talk about M&A because you want to succeed in the market today, you need to talk about influencing an industry “way of life” and legislation as the industry goes into the future. We in the non-profit sector need to look at partnering and consolidation as a survival technique for that future. It almost goes without saying that your board needs to be a large part of this process – they will need to support the strategy, understand the process, and shoulder the responsibility. And remember, you don’t have to merge – you can always partner (see The OPEN MINDS Guide To Strategic Collaborations).
Jess Jamieson, Ph.D., Former Chief Executive Officer, Western State Hospital & Compass Behavioral Health, and OPEN MINDS Senior Associate – The first step is to have a clear strategic plan in place. Organizations need to set out a list of strategic intentions and initiatives, and then collaborate as part of that plan. Often mergers take place as a reaction to a crisis, but I can’t overemphasize the importance of having guiding principles for your vision of the future. A merger needs to bring diversity that meets the needs of your mission and vision, so don’t just look at your friends as potential partners. At the end of the day, it is about merging organizational cultures – while you have to go fast when it comes to making a merger happen, merging cultures takes a lot of constant work and communication. The staff will know what you are up to anyway, so you need to make them part of the process (see Market Intelligence Toolkit on Mergers & Acquisitions all members).
Jonathan Evans, Chief Executive Officer, Safe Harbor & OPEN MINDS Advisory Board Member – Being asked about a merger can feel like being asked to sell a family member, but if you are a CEO and you haven’t thought about mergers in the industry, you may not be fulfilling your responsibility to your organization, your patients, and your community. We in the industry talk a lot about the constant change coming at us every day – every penny being spent on health care is being questioned these days. If you’re an organization with an annual budget under $70 million, you need to think about how partnerships and collaborations (your own or someone else’s) might affect your future (see As Market Rollercoaster Continues, Mergers Only Go Up all members).
For more, check out today’s presentation, Mergers & Acquisition Workshop: Tips, Tricks & Advice From CEOs Who’ve Been There and for complete coverage from the 2013 OPEN MINDS Executive Leadership Retreat – check out @openmindscircle on Twitter and Facebook.
For another free resource, see: Where Does ‘Big’ (& ‘Collaboration’) Fit In Planning? all members
