The joint announcement came on June 27.
By July 18, the deal was officially declared dead. Along the way, Abington Health managed to anger medical staff, donors, and the community it serves.
If your organization wants to alienate its entire community in a matter of days, follow these three simple steps embraced by Abington Health:
1. When making an organization-altering change, do not engage stakeholders.
When the merger announcement was made, most people on staff at the hospitals and in the communities served were caught by surprise. While the boards of both organizations formally authorized the signing of a letter of intent to merge, staff and the general public were left largely in the dark. Neither the community nor staff had much, if any, idea that merger talks were taking place. Even after the announcement was made, the public was presented with little justification for the action.
With a reported operating loss of $2.8 million for the nine months ending in March, it’s easy to understand why Holy Redeemer was looking for a merger partner.
However, with a reported operating surplus of $16 million for the fiscal year that ended June 30, it’s more difficult to understand why Abington Health pursued the merger.
Unfortunately, neither organization did a good job of explaining the value of the merger, either leading up to the announcement or following it.
You can read the press release from June 27 by clicking HERE. You’ll notice that the announcement is full of generalities and platitudes while being very short on specifics.
A news report revealed that 150 Abington doctors held an emergency staff meeting following the merger announcement to voice their opposition to the move. According to PhillyBurbs.com, Dr. Philip Rosenfeld, with Abington for over 40 years, said, “[The meeting] was very passionate; not one doctor was in support of the merger.”
Of the hospital’s quiet negotiations over the merger, Dr. Rosenfeld said, “It’s been a terrible slap in the face.” He added that the Abington administration showed “complete disregard for the staff.”
While letters, emails, social media messages, and telephone calls deluged the Abington administration, a community group was quickly organized. Stop the Abington Hospital Merger gathered over 4,000 petition signatures.
Clearly, the secretive merger talks and the tight-lipped post-announcement response from administrators set off a firestorm among medical staff and the community.
2. Cease being true to the organization’s and community’s values.
Secrecy was trouble for the merger. The failure to engage stakeholders was a problem. And, the lack of effective post-announcement communication made matters even worse. However, even if the merger talks had gone public, even if the rationale was solid and clear, the merger was probably doomed from the start.
The core problem for the merger involved the abortion issue even though Abington performed fewer than 50 in the past year. Holy Redeemer is a Catholic institution while Abington is secular. As a result of a merger, Abington would have ceased to provide abortions. And, questions arose about how the adoption of some Catholic values would impact other medical services as well.
Lisa Kelley, one of the petition organizers, said it simply: “We don’t want a Catholic influence, we want Abington to stay secular.”
Without staff and community input, Abington officials planned on a radical change to the organization’s core values. Officials planned on abandoning at least some secular values and replacing them with Catholic values. For the diverse community, this shift in values was hugely problematic.
Members of the community and staff voiced concerns not only about the abortion issue, but how the adoption of Catholic values would impact a variety of other medical services including end of life issues. Sadly, officials did not preempt concerns with solid information and did not adequately respond when the issues were raised.
One of the chief responsibilities of a nonprofit board is to vigilantly guard the institution’s mission and values. Changing Abington from a secular hospital to a secular hospital with Catholic values would be a fundamental change to the organization.
A nonprofit organization should not dramatically shift its values without a consensus from its stakeholders.
The Jewish Social Policy Action Network noted, “It would be ironic if an attempt to make the hospital more financially secure leads to financial hardships for such a highly regarded medical center.”
Yet, the damage has probably been done. Abington alienated the medical staff and the pro-choice members of the community with its plan. Now that the merger is off, Abington has alienated the anti-abortion members of the community as well.
3. Do not talk to the media.
In the lead up to the announcement, Holy Redeemer and Abington were secretive. After the announcement, both organizations had very limited media contact. Abington officials met quietly with some community representatives. However, no press conferences were held and no town meetings were organized.
All of the problems with the merger were simply compounded by the failures of both organizations to effectively communicate.
The problems with the merger would have persisted even with good post-announcement media management. However, by being open and forthcoming, officials might have avoided a lot of resentment. Instead, the Abington administration’s actions have bred frustration, resentment, and distrust. This is not exactly the environment that makes fundraising easier.
Even when announcing the end of the merger plans, both organizations were clumsy:
Joint Announcement from Abington Health and Holy Redeemer Health System
Abington Health and Holy Redeemer Health System have decided to end discussions regarding a potential partnership to create a larger health system. Together we had a bold vision that we believe would have served our community well. While we are disappointed, we believe this decision is in the best interest of both organizations. Abington Health and Holy Redeemer Health System will continue to seek opportunities to enhance the health of the communities we serve.”
So, if the merger was of critical value to the region, why were merger talks terminated? No reason was given.
If the merger was necessary to provide the region with quality medical care, how will the community receive such care now? No explanation was provided.
If the organizations still feel they “had a bold vision that [they] believe would have served the community well,” does that imply the community was just too stupid to get it? Insulting an already frustrated community is a less than wise move.
Both organizations continue to be tight-lipped. After all, that strategy has worked so well up until now.
I do understand that sometimes organizations must change in major ways for a variety of reasons. Sometimes, those reasons even involve saving lives. Holy Redeemer and Abington have shown us how not to go about major change. Having undermined the public’s trust, I suspect that both organizations will have a more difficult time raising money in the coming months.
So, if an organization does need to adopt major change, what can it do to enhance the chances of success? These steps are a start:
1. Lay the groundwork for change by educating all stakeholders about the need for change. And, involve those stakeholders in the change process. Get their input. Avoid generalities and embrace specifics.
2. Remain true to the organization’s core values. Do not adopt values that have nothing to do with your mission; this was part of the recent problem Komen experienced. Effectively, honestly communicate your values; failing to do so was part of The Salvation Army’s recent problem.
3. When things get tough, do not hide. Nobody wants to stand in front of a large group of people who hurl pointed questions or worse. However, that is exactly the responsibility of leadership. Talking with staff, donors, the community, and the media is essential. By the way, you’ll notice that I said “talking with” not “talking to.” If Abington officials blew everything else, they still could have preserved some goodwill and trust by being far more open. Instead, they now have an even bigger mess to clean up.
There are certainly many other steps involved with managing change. Whole books have been written on the subject. Nevertheless, following my three basic tips will help to avoid a great many headaches if you ever need to manage change at your organization.
That’s what Michael Rosen says… What do you say?
UPDATE (July 27, 2012): In response to the failed merger, Michael B. Laign, President and CEO of the Holy Redeemer Health System, wrote an op-ed article published this week in The Philadelphia Inquirer. He defends the merger attempt. No surprise there. On the other hand, he accepts zero responsiblity for the failure of the merger attempt. Again, no surprise there. You can read his commentary by clicking HERE.
UPDATE (July 28, 2012): Not all nonprofit mergers are ugly. Some actually go fairly smoothly. Here’s one such example: Seven United Way chapters in the Philadelphia and Southern New Jersey region successfully merged on July 1. You can read about the three things that made this success possible by reaading my post “Nonprofit Mergers Can Be Like Dating” (http://michaelrosensays.wordpress.com/2012/07/27/nonprofit-mergers-can-be-like-dating/).