Glenn Galloway

In these difficult financial times, many believe hospital mergers will soon be on the upswing. And for CIOs on either end of a merger, navigating the waters and protecting their position — and staff — takes a thoughtful and careful approach. Sometimes, though, no matter what a CIO does, the new dynamic will just not work and the only answer is a graceful exit.

“To some degree, I think the acquiring CIO really has a lot of pressure on them to establish credibility quickly,” says Glenn Galloway, founder and CEO of Healthia Consulting in Minneapolis. “Whereas the other CIO can wait and see how it goes.”

Mike Balassone, CIO of West Virginia University Hospital based in Morgantown, W.Va., which acquired two community hospitals at the same time back in 2005, experienced that pressure right away. “They wanted to know what our intentions were,” he says. “Were we going to come in and say, ‘I think it's really nice that you use Meditech (Westwood, Mass.), but that's too bad, you're about to use Epic (Verona, Wis.).”

The acquiring CIO, says Galloway, needs to listen to the issues of the acquired CIO and team, and paint a picture of what's going to happen, at least in the short term. “And you come back and say ‘Here's what I told you and here's what happened.’ Even if it's not exactly what happened, that should be acknowledged too,” he says, adding that it's important not to sugarcoat the future. “You don't have to paint a bleak picture, but it does have to be honest.”

Balassone says he was honest and up-front with the CIOs and staffs of the two acquired hospitals. “I wasn't there to say, ‘I think it's really great that you guys have been providing service to the hospital for 10 years and now you're going to do it our way.’” He says the approach he took was, ‘Let's talk about it.’

That talking took the form of entire days spent at the two new hospitals. “We walked the floors and did a lot of meet and greets,” says Balassone, adding that getting on the floors also helped him learn the physical environment. “People realized we were ‘a part of,’ not just the folks from out of town.”

Not too long into the process, Balassone says the staffs took part in a middle-ground, two-day retreat that brought everybody together. “Their first introduction was the golf course, so it was social as well as professional,” he says.

Rich Temple

Galloway agrees with Balassone's approach to fostering good communication. “I think it boils down to respect for the other culture and what they've done,” he says. He also says another good strategy for the acquiring CIO is to talk about the experience of other acquisitions and, if possible, bring those past acquisitions into the dialogue.

But once the initial dialogue has been opened, what must a CIO do to get the acquired staff members on board? “The part that was important for me was to convey truly a sense of collaboration in getting to the end point,” Balassone says.

For Rich Temple, former CIO of Denville, N.J.-based St. Clare's Heath System, that initial sense of collaboration kept him sticking around to see what would happen when his four-hospital system was acquired by Denver-based Catholic Health Initiatives (CHI), the nation's second largest Catholic health system. But in the end, after six months, Temple decided to leave. (Temple is currently chief information and business intelligence officer of AristaCare Health Services in South Plainfield, N.J.)

Like many in his position, going from the relative autonomy of his old shop to the new constraints of a large network proved to be too much of a culture change for Temple. “The regional CIO was a great person and there was no issue there,” he says. “It's just that I was used to going in and being the visionary, and as long as I didn't blow my budget, I could do what I needed to do.”

For CIOs of acquired hospitals, that loss of autonomy means hewing to a whole new set of standards and chain of command. The greater distance from decision-making, as well as a new set of approvals and standards, takes some getting used to.

But most agree there is an upside. “Though it was a little bit challenging because it was harder to get from point A to point B,” Temple says, he “really did buy into the notion that being able to have these standards is going to ultimately work to all of our advantages.”

Galloway says CIOs on both ends need to understand that losing autonomy often goes hand in hand with gaining additional funding.

“Sometimes the smaller community hospitals that get acquired are languishing a bit anyway,” he says, “and you're injecting some new technology and creating opportunities for the people who do want to make a difference.”

The same goes for the IT staff, often cited as a big concern for the CIO in any merger. Those new opportunities are one way to prevent a mass exodus when the merger news is announced “There are probably some cool things they're doing that can be leveraged across the other organization,” says Galloway. “You really should make a big deal out of it and recognize them for it.”

That's exactly what happened at St. Clare's, which had a track record of success with its Kansas City, Mo.-based Cerner implementation. CHI was re-deploying Cerner at five of its systems and Temple was excited about sharing what he and his team had already accomplished. “We had done a really good job on our Cerner implementation and they were going to need to tap into our talents in that regard,” says Temple, recalling how he touted those opportunities to his staff. “My IT staff took a lot of pride in making a difference in people's lives at St. Clare's, and being part of a larger organization affords you the opportunity to make a difference on a much grander scale,” he says.

While the early talks are going on, CIOs may wonder about the image they project. Many say the adage, ‘shine, but not too brightly,’ is a prudent approach. Temple says he didn't want CHI viewing St. Clare's as just another acquisition. “I wanted to come across as non-threatening, but I wanted to make sure we were on their radar screen,” he says.

Finally, when all else fails, there's always money. Galloway says complicated retention plans are generally unnecessary. However, he says, “Sometimes you do have to invest in saying, ‘Look, you don't necessarily know us or trust us, but we do need you to stay during this period of time, and we'll reward you,” with rewards coming in the form of more money or a better position.

But there may come a time when the CIO realizes the new arrangement is not going to work out. At what point does a CIO walk away? For some like Rich Temple, no matter how well the merger goes in terms of IT, it all comes down to personal vision.

“An opportunity presented itself where I could really build something,” he says, referring to his new position at AristaCare. But what if that new position hadn't presented itself? “I had a very supportive (new) boss, the organization liked me and I think they wanted to keep me around. But my world was sort of closing in a little bit around me in terms of the ability to do the kinds of things I wanted to do.”

At West Virginia, for Balassone, his CIO's exit came down to an IT issue. The parent hospital network decided that both acquired hospitals should have the same enterprise IT solution, and the only solution the network would consider was from the two incumbent vendors. “From the CIO perspective,” Balassone says, “one sort of won and the other lost.” It came down to which CIO's system chosen.”

In the course of this process, one of the CIOs decided to leave. Coincidentally, the departure came after six months — the same duration Temple stuck around St. Clare's.

And while a CIO is waiting to decide whether or not to resign, dealing with a staff can be tricky. According to Galloway, CIOs need to consider their reputation because how they make an exit speaks volumes. “You've worked with people for years, and you've hired them,” he says. “You have to take a personal stake in that and do the right thing. You need to stay long enough to make sure your staff has a smooth transition.”

Galloway says once CIOs determine the situation isn't for them, their actual departure should be swift, within a year at most.

Keeping a staff motivated during that period is not easy, but according to Galloway it comes with the territory. “That's the tough thing about being a leader,” he says. “You've got to lead. And if you can't lead, then you shouldn't be there.”

Sidebar

Brave New World

When new leadership steps in, taking a proactive approach can make a world of difference.

By Tim Tolan

Should I stay or should I go? Should I stay or should I go now? If I go there will be trouble — If I stay it will be double. So come on and let me know — Should I stay or should I go?”

Tim Tolan

This song by the 1970's band The Clash really does beg the question you must ask yourself when faced with a changing employment environment as a result of a merger or acquisition, especially when you don't have all of the facts. This feeling that you may experience can lead to developing a serious case of what I refer to as FUD (fear, uncertainty and doubt). It can eat you alive and force you on a steady diet of antacids if you let it get to you. This is a time you must deal in logic — and not emotions — to determine how you should answer the question, “should I stay or should I go?”

Generally speaking, mergers and acquisitions in a healthcare IDN or stand-alone hospital can have enormous synergies and cost savings, but they can also put the CIO in a real quandary as to what he or she should do as the new organization finalizes the organizational chart and people map. This can be incredibly stressful and send you into a downward spiral of “what-if’” scenarios that can cripple your ability to perform and execute a normal work schedule, not to mention a few sleepless nights.

I recommend a checklist approach where you, as the CIO, deal with facts and gather data points so that you can get your arms around the circumstances. Let's look at the situation and try to take a methodical approach.

Due diligence

What communications have you received as a result of the merger or acquisition? If you are part of the organization being acquired, you should be able to determine several data points about the current environment from the signals and messages put out by the acquiring organization. Is the organization located geographically in the same city or region and can they support having two CIO leaders? How long has the CIO of the acquiring organization been around? Do your homework and learn as much as you can about this individual's career. Who do you know that might know this person? Have you been contacted by the CEO or another executive that is leading the integration efforts regarding the way the combined organization will look after the deal closes? Have you “Googled” this individual or looked them up in the various trade association Web sites?

Get in the game

Do not just wait this out. It's important for you to find ways to insert yourself into the integration process if at all possible. It should mean a lot to the buyer to have you in their “integration canoe.” This will allow you to get a better read on the situation and help understand the way the new organization will begin to take shape. It should also provide you with a chance to influence the ultimate outcome. It will give you access to the new leadership so you can get an early assessment on whether or not they value your opinion. You will learn volumes about how they conduct themselves and you will get a chance to see if there is chemistry with the new boss. Whatever you do, make sure everyone understands that you want to be involved and would like a leadership role in this new organization. It is critical that the leadership team remains in place and show visible signs of unification early in the integration process. Reach across the aisle and schedule meetings with your staff and others in the acquiring organization in a proactive and positive way to help identify challenges and deal with any communication mishaps. Remember, if you suffer from FUD, your staff will likely experience the same uncomfortable feeling. Everyone is watching you.

No warm fuzzies yet?

If a reasonable amount of time has passed since the deal was announced, and there has been no communication about your future, your internal FUD Factor will likely kick into high gear. Don't panic. Remember, we need data points to determine next steps. I would recommend reaching out to the person leading the integration and scheduling a meeting to discuss the new organization and your role in it. To wait and do nothing is probably not a good strategy, especially if plenty of time has passed. This is not the time to play games with your career and your financial future, so you need to perform a reality check. You may be in the game for a while until the new leadership begins a series of “brain-drain” sessions with you to find out everything you are working on. Make sure you pay close attention to these types of meetings and inquisitions so you can assess where things are going. This is not the time to crawl under your desk in the fetal position and hope things get better. Remember, hope is not a strategy. This is your call to action.

Develop a back-up plan

Make a realistic assessment of where you are in this new deal. Make sure you develop a clear and concise action plan so you have something to fall back on. Whatever you do, don't wait until you receive the “Heisman” from your new employer before you spring into action. As my good friend always tells me, “Bad news early is good news. Bad news late is really bad news.” Coming to the realization that you may be moving on can be both scary and exciting, depending on the way you choose to internalize the situation.

Here are a few ideas to help with your action plan:

Reach out to your internal network and let your friends know what's up. Be cautious and make sure you are dealing with trusted sources only.
Make sure your resume/CV is up to date and include success metrics, highlighting your accomplishments so that search firms and a future employer will be interested.
Contact executive search consultants that specialize in placing senior level executive healthcare IT talent to see what's out there. However, do not appear desperate, or they will smell it right away. Purchase Kennedy Information's Directory of Executive Recruiters book. This book is the “Bible” of the search profession and provides a listing of executive recruiters available today that can help.
Don't post your resume on the job boards and risk the chance of quickly becoming a commodity in cyberspace. That is always a bad idea.
Consider other choices to leverage your skill set, including jumping over to the healthcare IT vendor world. Remember, your knowledge is very leveragable.
Don't panic and keep your attitude in check. Your attitude affects your altitude — always has and always will.