Inside Out Solutions, Inc

Mergers & Acquisition Integration

For context I want to give you some insight into the philosophy of my work with clients during merger/acquisition integration.  Most significantly I emphasize a collaborative process.  I do not purport to know more about how to run my clients’ businesses than they do.  I view myself and my processes more as a catalyst for the client team's thinking rather than a content expert that tells them what they should do.  Direct involvement of the people within the merged companies who actually do the day-to-day work of running those businesses is vital to merger/acquisition integration success.   

Having said that, however, I bring my 30+ years of experience to the work and share it as a member of the team to help us get to excellent outcomes. 

The other important philosophical principle in my work is customization.  I believe that every client circumstance is unique.  Its leaders, its culture, its objectives, and its style of interacting with each other and its customers are unique to them.  Therefore, I customize my consulting approach and processes for each client.  When you review my grid of sample merger integration work you will see some common processes that I used with all of the clients.  However, each of those processes was significantly modified and tailored to fit that particular client. 

This principle of customization ties directly to the principle of collaboration.  The reason each client's processes and solutions are unique is that my client and I collaborate from start to finish in the design and execution of our work together.  That collaboration assures that the client's unique characteristics and objectives are integrated into our shared work.  

Next, let me familiarize you with several processes that I refer to in the grid so you'll know what I'm talking about.

Criteria Based Prioritization

This is a proprietary prioritization process that analyzes the key factors of Value and Probability of Success when determining which of many options an organization should implement to accomplish an objective. 

To effectively analyze these factors the client team and I develop a customized set of criteria that defines what adds value to reaching the given objective and a second set of criteria that determines how probable it is that a given option can be implemented successfully.   

We plot these assessments on a matrix to create a visual of how the various options compare with each other.  This visual facilitates a qualitative discussion of the relative merits of the various options.  The depth and collaborative nature of this discussion yields decisions that all members of the team own and will therefore implement more rigorously than decisions that they feel were made either too unilaterally or without enough depth of thought and debate.

Capacity Management

This process works in concert with Criteria Based Prioritization.  It guides the client team to ask the question of "how"; how will the people who must implement a newly established priority create the time necessary for effective implementation?

I have found in my work that this is an often overlooked question.  The presumption is that people will "find a way."  In this process the client team and I overtly "create the way" so nothing

is left to chance. 

Unique Success Profiles

For any key position that must be filled this process asks the question; "what unique capabilities are required to be successful in this specific job, working for this specific boss, with this specific set of colleagues, in this unique culture?"  It enables the hiring executive to go beyond the resume to determine which candidate is just the right fit.

This process can also be used to develop people who are currently in a position, but struggling to succeed.  A targeted development plan can be established by identifying the gaps between the Unique Success Profile and the person's skills.     

Intrinsic Leadership Development

This process improves the skills of leaders to yield the specific objectives that organization has targeted.  It also enables the executive team to define, implement, and measure the culture it believes will optimize the organization's success. 

In this process the management team and I collaborate to develop a set of leadership principles that are unique to that organization.  We draw on multiple factors to create these principles.  Examples include:

• The primary strategic priorities that the organization must accomplish
• The culture the senior executive team wants to create
• Middle management and senior executive perspectives on the organization's strategic opportunities and challenges
• Middle management and senior executive experiences of the best and worst examples of leadership they have ever experienced

These principles are taught to all leaders in the organization.  Subsequently, each leader's strengths and opportunities for improvement are identified via a confidential 360-degree assessment process. 

I then meet with each leader to help them select a focused area of the leadership principles to work on to improve their effectiveness.  This assessment is repeated every 12 to 18 months to help the management team evolve its effectiveness over time.

It is common for the senior executive team to review the leadership principles every 3 to 4 years and make changes to reflect important shifts that have occurred over time in their strategy.  

In concert with this process I establish executive coaching relationships with the CEO and other top executives to continue to evolve their personal and collective leadership effectiveness.  This process enables the senior team to successfully lead the complex and challenging circumstance of optimizing the value of the merger/acquisition. 

Project Management

In all merger/acquisition integration projects I utilize expert Project Managers to maintain order and execution on all the many discrete and interrelated tasks.  A key to our successful Project Management process is direct involvement with the people within the merged entities who must actually do the work to run the business post-merger.  This interaction assures that all of the real issues necessary for success are addressed.  Below is a representative sample of issues that the Project Manager maintains oversight and control over:

• IT Systems
• Business Process Systems and Functionality
• Financial Systems and Functionality
• Human Resource Systems and Functionality
• Culture Development
• Communications (Internal/External)
• Establishment of Strategic Priorities
• Organization Design
• Integrated Marketing and PR Strategies
• Key Employee Acquisition and Development
• Corporate Governance
• Suppliers/Vendors
• Optimization of Functional Business Performance
• Physician Governance

Sample Merger/ Integration Projects

Client Description:

• 4 hospitals (850 beds)
• 4 medical groups (250 doctors)

Client Circumstances:

• Largest entity (2 hospitals) preparing to acquire the 2 other entities in different markets simultaneously
• CEO for each of the acquired entities added to the senior management team
• Retain the community Boards of each acquired entity

Objectives:

• Set post-merger strategic priorities
• Integrate new executive team into a functional unit
• Create new culture post-merger
• Maintain trust in the communities post-merger
• Significantly improve the performance of the acquired entities

IOSI/Client Collaborations:

• Prior to the acquisition: Developed the leadership principles of the Intrinsic Leadership Development process.  This served as the foundation of the new culture and defined how the executive team worked together.  This was done during the due diligence process
• Series of executive team sessions to set system level objectives
• Series of entity specific reprioritization sessions with that entity's management team using Criteria Based Prioritization and Capacity Management
• Series of sessions with each entity Board and the system Board to gather perspectives of the Boards' objectives for each entity and the system
• Train all leaders in Criteria Based Prioritization -Capacity Management

Outcomes:

• Prior to the acquisition the organization was second in market share in each of its service lines with one exception, OB.  Within 2 years of the acquisition it was number one in market share in all service lines.
• Two successive CEOs were named Businessperson of the Year in the state as voted by the business press of the leading newspapers
• The second CEO had been the CFO and credited the Intrinsic Leadership Development process for building the skills necessary to be a successful CEO
• The CEO credited the Prioritization/Capacity Management process for the decision not to make another acquisition that would have jeopardized their financial performance

Merger and Acquisition Representative Clients

Hawaii Pacific Health – Honolulu/Kauai:

Formation of Hawaii Pacific Health Integrated Delivery System:

• Kapiolani Health acquisitions of:
  • Pali Momi Hospital and affiliated medical groups
  • Straub Hospital and affiliated medical groups
  • Wilcox Hospital and affiliated medical groups

Mount Sinai Medical Center – Miami Beach/Miami Heart Institute – Miami Beach Merger

PIH Health – Los Angeles:

Acquisitions of:

• Downey Regional Medical Center
• Bright Health Physicians

FHP/TakeCare Merger