When it comes to successful transition to new (and old!) practice cultures after a clinic is sold and bought, you may feel like a big fish in a small pond. This advice should help. Come on in, the water’s fine!
Practice culture is a bit of a murky concept—it’s one of those things everyone can recognize but few can define. And while we tend to think of culture as something to worry about while you own a practice, it’s equally important to consider culture in a practice transition. In other words, when you are thinking of buying, selling or merging a practice.
So, to start, what is practice culture?
Culture has to deal with the values and beliefs important to the practice and the business style—essentially, how the company is run. My favorite way of defining culture is as described by Herb Kelleher, co-founder and former CEO and chairman of the board of Southwest Airlines: "Culture is what people do when no one is looking."
Most people judge culture by things they see happening in the practice—for example, which behaviors are rewarded or condoned, how involved team members are in making decisions that involve them and whether the practice really focuses on a good client experience.
Because culture is all about day-to-day values and actions, it is a critical component of a good transition fit.
Sellers: Know your buyer
If you are selling 100 percent of the practice, are sick to death of the whole thing and don’t plan to be involved after the sale, cultural fit may not matter to you. After all, you won’t be there to deal with the problems! However, most sellers care more than that. They either plan to continue working in the practice after the sale or want to ensure a good environment is ongoing for the employees who will stay.
Do your homework before making a decision to sell—this may not always be possible if you don’t have a choice in buyers or have to sell immediately, but spend as much time on these activities as you can. Don’t just focus on the financial aspects of the deal; you want a fair price but you also want a deal you don’t regret later.
If you are selling outright to an individual, try to get a feel for this person:
> Talk to the buyer about their plans for the future—where do they see the practice going? Are they planning on keeping the name? The location?
> How will management responsibilities be handled?
> What will be the role of the current employees during and after the sale? Will salaries and benefits change? What about roles and responsibilities?
> What has the buyer liked and not liked about other practices they have worked in?
> If the potential buyer currently works in your practice, take an honest look at their strengths and weaknesses. For example, let’s say that as an associate, the potential buyer has been a great producer but hard on staff when something goes wrong. Will that be different when they own the practice? In my opinion, it’s unlikely; after all, leopards don’t change spots.
If you are selling to a corporate group that owns other practices, there are more opportunities to get information in addition to those discussed above:
> Talk to other practices owned by the same group.
> Ask for a copy of the employee manual and other employment-related documents.
> Review the transition plan. An individual buying their first practice might not have a clear picture about this, but a corporate group that owns many other practices has done it before and may have dedicated people to help integrate the new practice into the fold.
> Get specifics about the role of the corporate group, the services they will provide and management and administrative changes that will need to occur in the practice. Think through how these changes will impact your employees. For example, your practice manager may be used to a very autonomous way of working that will be altered with the overlay of corporate management and reporting requirements.
If you are thinking about bringing on a partner (vs. selling 100 percent of the practice), it’s best to quadruple the time spent talking about these things with the potential buyer. After all, this will be a work “marriage” and you must have common goals as well as a way to resolve differences. Presumably, the potential new owner currently works in the practice, has a feel for the culture of the business and likes it.
Don’t assume, however, that your future vision is the same and your new partner isn’t going to want to make changes. What are those changes? Will they impact critical components of practice culture—i.e. the relationship with clients and employees? If the practice currently focuses first on people, and a new owner is more interested in production and money, there may be trouble.
Do you both work as hard and contribute as much to the practice? Do you both inspire the same kind of loyalty from team members and clients? Are your values and work habits similar? These are all important not just to the ongoing culture of the practice but to the success of the partnership.
Buyers: Know yourself
The idea of culture fit is really the same for buyers as for sellers, but in reverse. You need to know yourself, the kind of practice you want and how you plan to operate the practice before committing to a partnership or the 100 percent purchase of a practice.
Buying a practice with a culture that is not a good fit for you often ends badly. I once worked with a buyer who purchased a very profitable practice located in a blue-collar area. The practice focused on preventive care at an affordable price, had been in the area forever and had a great reputation. The buyer wanted this practice because of its location and purchased it with the idea that he could educate and motivate the clients to provide more advanced care for their pets (and pay for it). It is generally possible to make some changes to a practice but a total makeover usually doesn’t work; in this case the clients left to find the kind of care they wanted (and used to have) and the practice filed bankruptcy.
And, of course, culture isn’t just about client care and relationships. It is also about the way a practice operates internally. If you are a buyer, think about your management style and how that will fit. For example, how do you handle conflict? Are you good at listening to both sides and facilitating a resolution? Or are you more the type to make a snap decision about the problem and expect people to buck up and shut up? If you are the snap decision type, you are going to work better in a more structured practice environment with a practice manager who can handle the fuzzier aspects of conflict resolution.