10 ways to mess up your deal
DESCRIPTION
AHLA, April 2013TRANSCRIPT
• Seen inspired hospital leaders accomplish dramatic results
• Seen fumbled communications and tone-deafpolitical thinking imperil the hard, smart, difficult work invested to save or advance a hospital
• Seen poor planning and lack of coordinated processes delay or destroy a transaction that was in all parties’ best interests
• Seen lack of agreement on transaction goals hinder forward progress and increase cost to buyer and seller
• To avoid costly political and communication mistakes
• To use political thinking to win
• To put in place a strategic well thought-out process
• To coordinate the team approach
So that...
• Your hospital deals occur
• The hospital itself is positioned for a successful future
• The clients are happy
• Limit who is included in the team
due to traditional titles
• Cover only the basics like
finance, operations and legal
But…
• The deal is more complicated than that
• Experts from various backgrounds are
needed to execute a successful deal
So…
Include a seat at the table for the following:
• Management
• Financial Advisors
• Legal Counsel
• Accountants
• PR Consultants /
Strategists
• Benefits Experts
• Real Estate Experts
• Bankers
• Others?
• Limit information flow to departments
with a seat at the negotiation table
• Forget about integration process; how
this will really work in the end
But…
• The devil is in the details
• The numbers are important – but so
are people, physicians, culture
So… Focus on:
• Due diligence process
• What to include
• Who reviews
• Issues to cover
• Work product
• Who receives / how to communicate
• What filings and approvals are required
All bets are off if there are
any points of differentiation
But… remember the bigger picture
So…
• Start with the template
• Adjust for specific transaction
• Focus on what is important to the client
• Do not fall on every sword
• Rely on prior transactions for guidance
• Involve Board of Directors
• Communicate in silos
• Forget about even those closest to
you – your own team
• Leave the dealmakers (and
breakers) in the dark
But… Communication is often
missed at the simplest level
So… Communicate with
• All team members
• Client
• Target and its counsel
• All applicable government agencies
• Certain payors
• Assume they know the answers
• Overcommit on deadlines and
hurdles
But…
• There is no “regular”
process
• Expect the unexpected
So… Let them know about:
• Timing on diligence
• Licensure and certification
• Uncovering a reportable event
• Financing needs
• Securities laws (if applicable)
• Faith-based entities
• Assume you can keep it secret
• It’ll keep panic and lobbying to a
minimum
• We'll talk when we can answer every
question
But…
• This news is too juicy
• Nobody likes change
• Nobody like surprises
So…
• Have messages and communications materials prepared early
• Bring them along
• Build context over time
• Build trust
• It erases the debt
• It'll pay off the pension liability
• It’ll make us a tax-paying business
But…
• This is a political, emotional event.
Speak to it.
• Logic loses to emotions;
spreadsheets are deadly.
So…
• Use political language
• Stability so we are here to care for your
grandparents
• Security for our caregivers
• Quality care through new equipment,
shared services, affiliations
• Use the broker, the accountant,
the lawyer, the PR agent to
deliver the news
• Use the CEO nobody trusts
But… the messenger IS a
message
So..
• Find and use the credible
voice
• Someone invested, trusted
But…
• Faceless buyers are demonized
• Easy for naysayers to distort
reality
• Why won’t they talk to us? What
are they hiding?
I don't want them messing in "my"
hospital with "my" people
So…
• Get them on the ground, in the halls as early as possible
• Promote personal interaction with physicians & staff
• Have them share their story; it's a team effort
• Communicate only at
- The LOI
- The definitive agreement
- The close
But…
• Social media exists
• Conversations and rumors mill
churning every day, every hour
So…
• Communicate constantly.
Weekly. Daily. Build a website.
Open a hotline.
• Create & engage in dialogue
• Develop the campaign message
• Identify and train the voice
• Target the "votes" you need to need to
win
• Mini-campaigns for each key audience
• Who's the right person to speak to our
physicians, the AG, the Mayor, our nurses,
the newspaper? What do they need to hear?
• Anticipate opposition and prepare for it
• How will we take questions / squelch
rumors?
Early on, develop a communications campaign
team with:
• Communications / Government relations
• Legal
• Operations
• Broker / Financial advisor
Work together to build and manage the
campaign.
QUESTIONS?
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David Jarrard
www.JarrardInc.com
Cynthia Y. Reisz
www.bassberry.com