Contributors: Jennifer Tomasik, SM, FACHE and Jason Pradarelli, MD, MS
To learn more about Jennifer and Jason, click here.
Source: Bigstock |
Culture is a perplexing challenge in many healthcare organizations. It gets exponentially more complex when multiple organizations merge into one. Consider Advocate Health, for example, which in 2022 combined large non-overlapping markets in the Midwest and Southeast to create a more than $27 billion system.1 Hearing the co-CEOs describe the strategic rationale for the megamerger at last year’s American College of Healthcare Executives conference, it was clear to us that the execution of their strategy would depend heavily on people and cultures across widely different markets. After all, what does a tertiary medical center in Chicago have to do with a clinic in rural North Carolina? With hospital merger activity predicted to continue rising in 2024,2 the opportunities and risks across the healthcare industry are many.
Every organization has its own culture — or the “way we do things around here.” Cultural misalignment is one of the leading contributors to failed or poorly implemented mergers. But what if leaders took the idea of “integrating” culture as seriously as they take integrating their financial and operational systems? What if leaders could shape a shared point of view about their bold new strategy and build a refreshed culture to get there? What if they could refresh the culture in a way that leverages the uniqueness of its individual parts to the greater benefit of the system as a whole?
We partner with healthcare leaders to build “systemness” — a way for newly merged entities to create a whole that is truly greater than the sum of its parts.3 Each part of the organization brings its own subculture to the system, which risks creating silos if not also merged intentionally. Achieving systemness begins with a shared vision for success and a culture that can deliver on the strategy to get there. Consider these questions to articulate a vision: Why do we exist? What is the future we are working to achieve? What are we doing together that we could not do alone? For example, Kaiser Permanente’s vision is “to be a leader in total health by making lives better.”4 Leaders then should ask: What culture will enable our strategic efforts to achieve our vision?
Culture is intricately linked to organizational performance5 and critical to executing strategy and implementing change. Skill in shaping organizational culture is no longer a nice-to-have but rather a need-to-have competency. When multiple entities come together in a merger, leaders have hard choices to make. It is important to understand which pieces of culture are so essential that they must be shared across the entire organization, and which should be protected locally. We view shared culture and distinct subcultures on a continuum, aiming to strike a balance between the two.
Organizational culture is built on what people do, rather than what they say they do. In this way, we can think of culture as a collection of behavioral practices. Practices are the building blocks of organizational culture. They consist of both behaviors (what people do) and supports (structures, processes, rewards, metrics, etc.) that enable behaviors. If culture is to change, practices need to change. Each practice may be small, but together, multiple practices can move an organization’s culture.
Culture must be nuanced to be relevant to all in a newly merged system, meaning that not everyone has to enact that culture in the same way. For example, organizational values are a useful vehicle to articulate shared and aspirational elements of a culture for a merged entity.6 How values are lived out, however, might differ from hospital to hospital or clinic to clinic, reflecting shared culture at the level of values while maintaining a healthy distinctness at the level of behavioral practices.
How closely people work together should determine how shared their culture is. Let’s use two example values: “Innovation” and “Respectful Communication.” Innovation at the Chicago hospital might look like implementing a new enhanced recovery pathway after surgery to reduce length of stay. At the clinic in rural North Carolina, Innovation might look like administrators partnering with providers to experiment with how best to reduce documentation burden by applying generative artificial intelligence to clinic workflows. For Respectful Communication, people who work together through a central call center at Kaiser could develop a set of expectations that work for them and the supports to make those expectations possible, while clinical teams in Southern California decide on a slightly different set of expectations for Respectful Communication in their local context. These examples demonstrate that in different corners of an organization, values can be held as shared cultural aspirations, whereas the way those values are lived out can vary across entities in ways that advance the organization toward its overarching vision.
Other practices that merged organizations might deploy to balance culture across the parts and the whole include:
- Supporting affinity groups
- Creating learning collaboratives
- Developing a shared quality strategy
- Enacting performance management based on shared values, with behaviors unique to the local context
- Implementing leadership development programs
- Establishing norms for succession planning and curating the leadership pipeline
- Designing governance structures to support the desired behaviors at the frontline
Balancing culture is the most important asset for achieving systemness and delivering on the vision and strategic goals in complex organizations. This approach applies as much to entities within a geographically dispersed megamerger system as it does to an in-state academic health system. As many health systems look to expand, what if leaders can strike the right balance of shared organizational culture and distinct subcultures to attain success for the entire organization and its patients, employees, and their communities?
Contact Jennifer at: [email protected]
Contact Jason at: [email protected]
For more information on this topic or related materials, contact CFAR at [email protected] or 215.320.3200 or visit our website at www.cfar.com.
References
- Hudson C. Advocate Health CEOs set ambitious growth targets. Modern Healthcare, 2023.
- Kacik A. Hospital merger activity to increase in 2024. Modern Healthcare, 2023.
- Tomasik JT and Gallagher CH. Making the bet on population health pay off: Realizing “systemness” through shared purpose and a collective strategy. The Wharton Healthcare Quarterly, Jul 2018.
- Our Vision. Kaiser Permanente website, 2024. https://healthy.kaiserpermanente.org/pages/quality-safety
- CFAR. Fieldnotes from CFAR’s CultureLab: The intertwining of culture and strategy. Nov 2022.
- Tomasik JT, Tyson Hynes B, Colon-Kolacko RM. Accelerating systemness through shared vision and culture. Management in Healthcare, 2023.