To gain the hypothetical benefits of consolidation,healthcare CEOs should invest time in building structures and systems that work. Synergy may be a logical outcome of integration, but there are inherent forces in organizations that undermine it. CEOs must understand the natural forces that fight integration, as well as the tools they can use to create sustainable structures that keep the competing forces in balance.
In business, just as in physics, there is a natural tendency for things to fly apart unless there are specific offsetting forces. Executives planning post-merger integration should be aware of the natural forces that would cause the system to disintegrate, and they should recognize and employ the necessary centralizing forces to counterbalance these.
Organizational cultures create the greatest centrifugal force. Financial and legal structures intended to segregate and protect the assets of individual organizations contribute to pulling it apart. Organizational silos, whether within or between organizations, create wedges that weaken integration efforts.
Complexity or lack of clarity about mission, vision, strategy, or standards of performance add to the forces of disintegration. The common desire for organizational autonomy, managerial independence, control of unit resources, and freedom of action all tend to move authority and control away from the center. That is why organizational centrifugal force will lead organizations to split apart rather than integrate unless leaders create strong ties to hold them together.
To achieve successful post-merger integration, CEOs should employ design principles that offset the natural forces of disintegration. The first action is to create a strong, stable center. Although CEOs may not welcome an additional task on their already full plates, designing effective consolidated organizations is one of their primary responsibilities, akin to strategic planning. It requires many of the same skills and analytic rigor. Like planning, design requires a deep understanding of the business, it forces choices, and it is not permanent. Fortunately, strategic planning and organizational design overlap and are mutually supportive, although design does not involve as many unknowns as strategic planning. But organizational design is not simply moving boxes around on an organizational chart. CEOs who design as carefully as they plan will add to their competitive advantage and create stronger, healthier, and more vibrant healthcare organizations.