BioSpectrum (India) - - Bio Contents - KALAPPA K B Sr. VP Hu­man Re­sources, Columbia Asia Hospi­tals Pvt. Ltd.

With the vi­sion to im­prove qual­ity and boost af­ford­abil­ity, many stand­alone health­care or­gan­i­sa­tions con­sider merger and ac­qui­si­tion as im­por­tant part of their busi­ness model. How­ever, they fail to re­alise that the pri­mary rea­son why mergers and ac­qui­si­tions do not de­liver long-term value is due to lack of a strong cul­tural-in­te­gra­tion be­tween teams.

Im­me­di­ately after the deal is made, ac­quired or­gan­i­sa­tions es­pe­cially its peo­ple, un­dergo a com­plete trans­for­ma­tion. With the sys­tems, pro­cesses and pro­grammes un­der­pin, the ac­quired com­pany’s cul­ture is heav­ily scru­ti­nised. Gripped with the anx­i­ety of the out­comes, peo­ple of the ac­quired firm are the most af­fected in any merger and ac­qui­si­tion pro­cesses.

Suc­cess of any busi­ness plan de­pends on the peo­ple who drive and lead the busi­ness and their abil­ity to for­mu­late and ex­e­cute strat­egy. It is crit­i­cal to in­volve HR pro­fes­sion­als in the process of merger & ac­qui­si­tion as it has an im­pact on all the em­ploy­ees.

Analysing and deal­ing with or­gan­i­sa­tional cul­tures After the merger and ac­qui­si­tion process, the chances of achiev­ing tar­geted out­comes in­crease dou­ble-fold when proper plan­ning is done to in­te­grate the two dif­fer­ent cul­tures of the or­gan­i­sa­tions. In­te­gra­tion of these two cul­tures is not a short­term task and does not hap­pen im­me­di­ately. There­fore, the HR lead­ers of both com­pa­nies should promptly de­velop a strat­egy to help out the com­pa­nies in ac­com­plish­ing the syn­er­gies. In many cases, smaller ac­qui­si­tions tend to do bet­ter than larger ones be­cause the cul­tural dif­fer­ences can be eas­ily ironed-out with smooth ex­e­cu­tion of the HR strate­gies.

Also, the con­sol­i­da­tion in the health­care sec­tor can ei­ther help or hurt pa­tients as the key de­ci­sion mak­ers in the or­gan­i­sa­tions change. With merger and ac­qui­si­tion on the rise, a planned in­te­gra­tion of strat­egy and merg­ing two cul­tures can help avoid the risk of eco­nomic up­heaval.

Role of HR in merger & ac­qui­si­tion

Gen­er­ally, Hu­man Re­source comes into play only after fi­nan­cial ra­tio­nale deal is con­firmed and due dili­gence is per­formed with all the doc­u­men­ta­tions. Ide­ally the Hu­man Re­sources depart­ment of any Or­gan­i­sa­tion should be in­cluded right from the very day of the on­set of merger dis­cus­sions. This helps them to pre­pare a road map for suc­cess­ful in­te­gra­tion of peo­ple and strat­egy in ad­vance on the ba­sis of fu­ture goals and vi­sions of both the com­pa­nies. This can be fol­lowed post-merger driv­ing away any fu­ture pos­si­bil­i­ties of mis­un­der­stand­ings and dif­fer­ences.

Be­fore putting the merger and ac­qui­si­tion plan into prac­tice the lead­ers along with the Hu­man Re­sources should an­tic­i­pate the struc­ture which is yet to be formed. This is im­por­tant for the new or­gan­i­sa­tional en­tity where a proper man­age­ment team should be put in place to align and guide the or­gan­i­sa­tion to­wards the es­tab­lished vi­sion. In­volve­ment of HR pro­fes­sion­als is in­dis­pens­able in any merger and ac­qui­si­tion process as they di­rectly deal with the is­sues per­tain­ing to em­ploy­ees and can sug­gest am­i­ca­ble so­lu­tions and way for­ward plan for im­ple­men­ta­tion of strate­gies that can ben­e­fit the em­ploy­ees in the long-term.

Bridg­ing the gap with com­mu­ni­ca­tion

Com­pa­nies strug­gle when they fail to de­fine fur­ther course of ac­tion and main­tain a trans­par­ent di­a­logue with the em­ploy­ees of the ac­quired en­tity. This can of­ten lead to un­de­sired mo­men­tum to sud­den strike or union­iza­tion by the em­ploy­ees.

Amongst the many vari­ables that health­care or­gan­i­sa­tions should pay at­ten­tion be­fore the deal is com­pleted, Hu­man Re­sources depart­ment can act as a cat­a­lyst and coach in the suc­cess of mergers and ac­cu­sa­tions in to­day’s ever-chang­ing health­care land­scape.

Be­low men­tioned are some of the best prac­tices that can be fol­lowed by HR during merger and ac­qui­si­tion:

Iden­tify lead­ers from both the com­pa­nies for ef­fec­tive im­ple­men­ta­tion, com­mu­ni­ca­tion and tran­si­tion of the em­ploy­ees

Pro­vide train­ing to the man­agers on the na­ture of change for them to ad­just to the new work­ing en­vi­ron­ment.

Con­duct ori­en­ta­tion pro­grammes for the em­ploy­ees of the new en­tity on the Poli­cies, Pro­ce­dure, Val­ues, Vi­sion & Mis­sion of the new or­gan­i­sa­tion

Update team mem­bers on Per­for­mance man­age­ment, Com­pen­sa­tion, Ben­e­fits and wel­fare schemes of the or­gan­i­sa­tion.

Con­duct reg­u­lar town hall meet­ings and team build­ing ac­tiv­i­ties

Ar­range reg­u­lar train­ing ses­sions for the new em­ploy­ees on par­tic­u­lar skills and tech­niques

Boost con­fi­dence of staff

Re­tain pro­duc­tiv­ity by brush­ing away the doubts and fears of em­ploy­ees hence main­tain­ing trans­parency in the or­gan­i­sa­tion

• Work in tan­dem with depart­ment heads to ex­plain the new roles of each em­ployee in a par­tic­u­lar depart­ment

• Ex­pound the hi­er­ar­chy struc­ture

of the or­gan­i­sa­tion, post-merger

Elu­ci­date the ef­fects of the merger for the em­ploy­ees of both the or­gan­i­sa­tions and ex­plain them the ad­van­tages of mergers.

Im­por­tance of in­volv­ing HR in merger and ac­qui­si­tion process:

Help­ing em­ploy­ees to cope up with the new changes in the or­gan­i­sa­tion and adapt­ing to the new cul­ture

Fram­ing cor­rect or­gan­i­sa­tional hi­er­ar­chy struc­ture

Main­tain­ing the pro­duc­tiv­ity by plac­ing of right peo­ple at right place and the right job.

Align­ment of com­pen­sa­tion, ben­e­fits and wel­fare schemes

Job se­cu­rity

Re­lo­ca­tion of the em­ploy­ees

Com­pli­ance of lo­cal labour laws

Ef­fec­tive staff com­mu­ni­ca­tion

Update the new team mem­bers of em­ployee ben­e­fits.

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