Mergers and acquisitions go beyond the financial aspects.
December 1, 2024 | Article Feature: Today’s Veterinary Business
By: Dr. Don Costlow
For many of us, building a veterinary practice has been a lifelong dream — a labor of love reflecting our dedication to animal care. However, as the years pass, every owner reaches a crossroads: the decision to consolidate or sell their hospital to begin a new chapter. Whether the next step means retirement, focusing on patient care again or reclaiming personal time, it’s a pivotal moment filled with equal parts excitement and uncertainty.
Merging a practice into a corporate network or selling to an independent owner is a complex and often emotional journey requiring careful consideration and strategic planning to ensure a smooth transition. From the start, it involves:
- Finding a partner who shares your vision and values.
- Forging a strong relationship with the buyer early in the engagement.
The partnership and mutual understanding will pave the way toward preserving the seller’s legacy in ways that continue to benefit the veterinary team and clients.
With these foundational principles in mind, let’s address the transactional partner — practice buyers — and what they should focus on.
Aligning Cultures
Cultural alignment is one of the most crucial yet often overlooked aspects of a successful hospital purchase. A veterinary practice’s culture is shaped by the hospital’s approaches to patient care, staff interactions and operational management. Neglecting to assess these dynamics can disrupt the integration of a new owner and prevent realizing a sale’s full potential.
The key steps a buyer should take to ensure cultural integration include:
- Prioritize visits: Spend time with the hospital staff. These face-to-face interactions are essential for gaining insight into the day-to-day operations and understanding the underlying cultural dynamics.
- Facilitate dialogue: During visits, hold meaningful conversations with team members at all levels. Listen to their concerns, understand their perspectives, and discuss how the transaction might impact their roles and the culture. This step helps address issues early and fosters a sense of inclusion.
- Assess alignment: Evaluate key aspects of the hospital you acquire, such as HR practices, management styles and approaches to innovation. If the practice is joining a corporate network, look for areas of synergy where cultures align naturally and red flags that might indicate deeper issues. Consider how all the elements fit together in a cohesive operational framework and identify any inconsistencies that could create challenges.
All these conversations are essential for realizing the transaction’s full potential and securing staff buy-in and support.
What Are the Objectives?
The success of a hospital acquisition often depends on having clearly defined goals. Share your vision with the practice team, and initiate the conversations early and frequently.
Before diving in at a hospital that my company is buying, I like to ask the staff, “If you had a magic wand, what two things would you change?” The question helps clarify priorities and reveal long-term and short-term goals related to patient care, operational strategies and HR practices. You might be surprised at the answers and how easily you can make changes. Perhaps it’s ordering a piece of equipment the next day because you understand the return on investment and the goodwill it will generate. Many changes are simple, and providing reassurance that changes are possible goes a long way.
Change Management
Finally, how you engage with your new team and manage changes can determine the transaction’s success or failure. Staff members will have concerns about how the sale will affect their roles, fringe benefits and daily responsibilities. Keeping employees in the dark often magnifies challenges rather than minimizes them. The last thing you want in a team is increased fear and anxiety and reduced morale.
Effective management of the change process and staff communication go hand in hand. Here are the tactics I find most effective for addressing both of them:
- Communicate transparently and regularly: Inform employees at every stage — before, during and after the hospital purchase. Regular updates alleviate unease in the team.
- Avoid unconfirmed promises: Provide clear, honest updates rather than pledges that might not be realized. This approach maintains trust and credibility.
- Offer reassurance: Let the staff know you will seek answers to their questions and concerns. Your response could be as simple as, “I don’t have the answer to that at this time, but I will find out and make sure you know.”
- Be upfront: Address the facts as soon as you can confirm them. Employees and clients often react more negatively to the unknown than to clear information, even if they don’t favor it.
- Listen actively: Solicit feedback and organize town halls to hear staff concerns. Providing direct responses builds trust and demonstrates that the team’s input is valued and heard.
Remember that your team and clients are your most valuable assets and that the process is more than just merging hospitals or completing an acquisition. The reward ultimately lies in thoughtfully managing the transition and supporting a cohesive, thriving environment. The transaction might feel like you’re navigating a complex maze, but embrace the experience and challenges as an opportunity for growth and alignment with like-minded professionals.
By caring for your employees and clients, you achieve your goals, advance your vision of exceptional patient care and make a lasting, positive impact.