There is a well-known business statistic that 60-90% of organizations fail to execute their strategies during normal operating times, a number which certainly increases during major uncertainty.
When an organization is entering a period of major uncertainty due to mergers and acquisitions (M&A), or other substantial external shifts, senior leaders often put major strategic planning, and even current initiatives, on hold due to concern that they will be unable to successfully drive them forward.
This reactive approach is exactly the opposite of how organizations should behave during uncertainty. The risk of having no strategic plan can have both short- and long-term negative impacts including:
- Decreased employee engagement
- Loss of productivity
- Reactive vs proactive approach to work
- Loss of revenue
- Decrease in market position
- Increase in leadership levels of uncertainty in decision making.
These challenges make strategic planning, and subsequent execution, during times of uncertainty even more critical. It requires a different approach than when operating as business as normal.
It starts with a mind shift that you don’t have to suffer planning and execution paralysis during times of uncertainty. You can, and should, do more than the bare minimum of simply keeping operations going during an M&A.
For organizations with the culture and organizational capacity to do so, not only can strategic work continue it can also be an opportune time to quickly identify and begin strategic growth initiatives that begin to realize the value of the merger or acquisition.
Once the mind shift is made there are multiple ways to develop and execute strategy during these critical times – here are two:
1. Inject agility into your organization by moving to an agile mindset and behaviors
In healthcare, many organizations have been slow to move from traditional planning approaches (such as waterfall) due to the overwhelming regulatory requirements and complexity in the business. However, during times of major uncertainty, utilizing an agile mindset and simple behaviors can help empower employees and keep major strategic work afloat. You don’t have to be an agile organization to benefit from some basic changes.
Applying an agile mindset and behaviors to the execution of strategic initiatives is powerful when an organization is facing external pressures and uncertainty. By applying the following agile principles, organizations can increase employee engagement and satisfaction, lower the risk of re-doing work that may not align with a sudden direction shift, and immediately see value and progress on their strategic objectives.
• Set a vision and empower your team to deliver.
• Defer decision making until later.
• Use less governance. Let teams maintain control.
• Keep stakeholders apprised every step of the way.
• Realize the business value incrementally vs. at the end of the work.
• Address key areas of risk early.
2. Build short-term joint goals and objectives for the integration period to help guide the day-to-day business and drive early value from M&A.
While significant resources may be dedicated to M&A integration efforts, many employees who are not directly involved in M&A may find themselves in limbo without the leadership and direction they need to continue to move forward. No business can afford to remain idle with current operations for a year or more while integration efforts are underway. A year of lost innovation and productivity might well set the newly formed organization in a weaker position than before the M&A activity began.
M&A integration efforts, often supported by outside consultants, focus on the major objective of blending or merging the people, process, culture, and technology between two previously separate organizations.
With strong leadership who can respond to and approve short term strategic plans, building a year one strategic plan with joint goals and specific objectives and tasks that may be independent to each organization, is an effective way to ensure that both operations and strategic work continue while integration efforts are underway. This approach also gives employees not involved in integration planning and execution the opportunity to start engaging with their colleagues from the other entity at regular status updates and reviews. Building relationships and, subsequently trust, will only help in cultural integration efforts.
Due to an ever-changing external environment, the healthcare industry shows no signs of being on stable ground any time soon. Leaders need to adapt to this new normal and bring new methods and decisive thinking to ensure their organizations, and people, continue to grow and make progress on strategic work versus treading water during tumultuous times. Doing so can only contribute to organizational resiliency to help weather any difficult times in the future.
About the author:
Tammy Graves is a principal with Point B, an integrated management consulting, venture investment, and real estate development firm. Graves is a health care executive with over 17 years of broad health care experience in provider and voluntary health organizations.