Corporate mergers and acquisitions are inherently stressful, but they don't have to result in employee exodus and jumbled systems. Here's the right way to unite IT forces.
Arlyn Broekhuis, CIO at North Dakota-based non-profit healthcare company Sanford Health, is no stranger to mergers and acquisitions. Sanford Health recently merged with Fargo, ND-based MeritCare Health System and Bismarck, ND's Medcenter One.
Whether a company is merging with an organization of equal size or gobbling up a smaller competitor, Broekhuis acknowledges that common challenges arise when the two attempt to unite technologies, business processes, and cultures. Certainly mergers and acquisitions can create new opportunities for IT professionals with the expansion of a company's products and services. But sharing precious IT resources with complete strangers can also lead to everything from culture clashes to poorly integrated systems.
Fortunately, a little effective planning and proactive management can help smooth those inevitable bumps. Broekhuis offers these 6 suggestions for IT leaders on how to manage team members, both new and old, while in the throes of a merger or acquisition.
1. Keep quiet. It's not uncommon for employees to whisper about rumors of an upcoming merger or acquisition. But that doesn't give IT leaders the go-ahead to disclose particulars of the deal--details that might unnecessarily alarm other staff members. "We've got so many acquisitions and mergers going on all the time, our staff often get general information about the status of a merger or an acquisition," said Broekhuis. "But it isn't until the merger is actually completed that we really get staff involved in planning where we're heading next."
2. Take inventory. Once a merger or acquisition is complete, it's critical that IT leaders conduct a thorough inventory of the systems and technologies that exist between the two entities. "The first thing we do is pull groups together in IT and start to compare technologies," said Broekhuis. For example, following Sanford Health's July merger with Bismarck's Medcenter One, Broekhuis said, "Our information technology directors now meet on a weekly basis to compare the systems we have at both organizations and to work on a plan outlining how we should integrate them."
3. Consider all your options. The post-merger period is usually a time for integrating systems. But Broekhuis points out that it's also important for IT leaders to consider workaround solutions. For example, while Sanford Health has long relied on Microsoft Exchange 2010 for its email system, the company's Bismarck, ND location used Exchange 2003. Broekhuis could have taken steps to eliminate one system altogether. Instead, because of the flurry of emails going back and forth between separate email systems, Broekhuis devised a plan to encrypt all the company's emails as if they were all using one internal email system.
4. Be patient. Disparate email systems aren't the only sources of conflict for newly reshaped companies. "Out of everything in a merger, combining cultures is the most challenging part," Broekhuis said. "[IT leaders need to] take time to understand the two different cultures between the organizations and figure out how to gradually bring those two together." Rushing the process is likely to lead to employee dissatisfaction.
5. Stress the positive. High attrition rates among IT professionals aren't uncommon in the wake of a merger or acquisition. "With a merger there's a lot of change, so if someone is thinking about leaving an organization, that's usually when they'll take the opportunity to leave and find work elsewhere," said Broekhuis. That's all the more reason for IT leaders to emphasize the positive aspects of acquiring a company's new systems and services. For example, Broekhuis said Sanford's merger with MeritCare added 100 new IT professionals to its existing 100-person IT team. "Sometimes there are plenty of opportunities for people and new positions."
6. Be willing to let go. For all the effort devoted to convincing employees to embrace new technologies, IT leaders are often the most resistant to change. "Sometimes we're a little tied to our technology," Broekhuis acknowledges. "But we need to recognize that, in a merger, sometimes we have to give up something we've done a certain way in the past and admit that someone else has done it better."