Situation

Actions

Results

Case Study

Merging without Losing Valued Employees and Customers

Knowing that 70% of mergers fail, a hospital asked Schmalensee Partners to help guide the human side of its merger with another hospital chain. One goal was to make the merger "stick", to retain valued employees, and to continue to give excellent care to patients and their families during and after the merger. A second, more ambitious, goal was to identify and preserve the best of both hospital chains in order to create a new institution that was even stronger than the two original hospital chains. The hospital further said that speed was vital and that the new institution had to save or make $10 million extra a year.

Schmalensee Partners worked with a team from each hospital chain and with a team of outside experts to design an objective and valid process for assessing the capabilities of each chain, recommending how to proceed, and then taking action. The first step was to build support for the process with everyone from the Boards to the hourly employees, so a series of presentations were made tailored to the interests of the audience. This calmed fears and bought the hospitals valuable time.

Next, Schmalensee Partners and the team of outside, unbiased experts assessed the strengths and areas for improvement of both hospital chains. It did this through extensive interviews and surveys. Since the hospitals had many functions in common, the assessment looked carefully at each one’s goals and how it did its daily work. Based on what was learned, the team wrote a report highlighting the strengths and areas for improvement of each hospital chain and then recommending how the new organization could build on the strengths.