M&As threaten culture

by 01 May 2007

COMPANY CULTURE is most under threat during mergers and acquisitions, according to Ramsay Health Care’s managing director, Patrick Grier.

Speaking at a recent business briefing, he said Ramsay Health Care faced many challenges when it doubled in size as a result of acquiring Affinity Health in 2005.

“The problem is that the actual core people that are educated with our culture have been diluted tremendously,” he said.

“The original number of Ramsay people that are educated with our culture stands at only around 35 per cent of our people now. Somehow, we’ve got to maintain this culture with our new people.”

As Australia’s largest private hospital operator with 70 hospitals across Australia and Indonesia and more than 20,000 employees, Grier said that Ramsay developed some strategies to strengthen its culture during the merger.

The organisation’s decentralised management model was reinforced, so hospitals were run as autonomous enterprises. “What the hospitals do determines our success but what comes with it is a lot of responsibility,” he said.

This develops an entrepreneurial spirit within the organisation, he said. “We say to managers, ‘manage as if it is your own business. If you’ve got to make a decision, think what that decision would be if it was your own business.’”

Grier said one of the most challenging issues with decentralised management is in maintaining good practice and standards across all hospitals.

Part of the strategy included the ‘Ramsay Way’, a set of core values that people could believe in, understand and relate to. It essentially identifies what people expect from Ramsay, what management expects from them and what staff expect from their own peers.

Ramsay also attributed its success to it focus on organic growth and home grown management. “Growing people from within is better than going outside in terms of building good morale,” he said.

Building relationships also played a formal role in the organisation’s successful strategy and culture. In addition to the communications program promoting the ‘Ramsay Way’, a formal program was used to develop relationships with doctors, staff, industry and politicians.

Grier said the company has also worked on networking and collaboration since acquiring Affinity in order to improve communication.

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