Preparing for change Featured

8:00pm EDT June 25, 2009

Mike Koziara can empathize with the turmoil his employees felt during their company’s sale and acquisition. Even though, as Care Choices’ chief financial officer, he helped lead the process, he wasn’t sure what the changes would mean for him.

“I probably wasn’t any different than any other employee,” he says. “Although I was involved in the due diligence, I myself wasn’t certain, ultimately, as to where my career would end up.”

Fortunately, he landed with Priority Health, the health insurance company that acquired his, as the vice president of provider network strategy and East Region. He has more than 130 employees under him in the region, which accounts for about $200 million of the billion-dollar company’s revenue.

Throughout the transition, Koziara had to keep his employees informed of the changes and provide a support system as they made the decision to stay or go — all the while, keeping them focused on the business goals at hand.

Smart Business spoke with Koziara about how to guide your employees through a life-changing transition.

Be intimate. Before the acquisition, the leadership team made a decision to communicate what was occurring. The one key message was, ‘The company’s moving down a new path. That path might entail the sale of the company, it might entail the merger of the company, or potentially, it might mean the company will continue as it currently is.’

With a message that says, ‘Hey, we’re going down a path and it may take different forms,’ of course, the first question is, ‘Well, what form is it going to take? I heard we’re going to be sold and we’re all going to lose our jobs.’ All forms of the communication said, ‘When we know something definitive, you’ll be the first one to know.’ So there was a decision that says we will pursue a merger or sale. And when that decision was made, we let the staff know.

The communication was probably the most important thing through the whole process. It was at the company level, it was at the departmental level and then it was at the one-on-one level. The leaders spent quite a bit more time engaging throughout the company. We’d simply sit down and talk to any staff level throughout the company to gauge how they were feeling, were we connecting with them when we had the group communications, were we touching on the right points?

That built a sense of trust and openness, as opposed to proclaiming, ‘This is where we’re at. Send us an e-mail if you have a question.’ We had an open e-mail Q&A process that augmented it but most effective was the one-on-one.

Support employees’ decision-making. The other aspect of the communication was the straightforwardness: ‘We don’t know at this point what the final disposition will look like. But what we can encourage you to do is to take the information that we have presented to you and you need to make your own decision. You need to look at your opportunities in the marketplace, your opportunities with the probability of continuing employment if the company is merged or acquired.’ So we encouraged the staff to take accountability for themselves. That was a value we gave these people by letting them know early on what was happening.

[When the acquisition was announced,] the messaging changed and we said, ‘OK, we can’t guarantee any of you employment, but a substantial number of you will be hired.’

Even that’s a tough message. We again reminded them that we have a plan, we have to execute the plan and that our expectation of you is to accomplish these goals.

Encourage them, ‘We’ll provide you new tools. We’ll provide you new technologies, capabilities so that, in fact, you can even achieve those goals more effectively.’ It’s a constant reminder that you’re here to do a job and we’re improving your capability of doing it.

The choice to stay or go, we wanted that to be as informed a decision as possible. Through the entire process, from day one, we had increased the amount of human resources staff that were available. We had human resources staff on-site. We brought consultants in to help with career planning. So if somebody said, ‘I’m not sure what I should do,’ we had our own HR people to help them with the decisions. It’s emotional. It certainly affects them. So we actually gave them a resource to help them manage through this. So that’s part of the empathetic part, is helping them through this.

Keep employees focused. The leadership team continued to focus on the business goals — both before as well as after the sale. It’s easy to become consumed by the huge workload of the transition. So what we did was reminded our employees that it’s our mission that’s most important. We have a higher calling to serve our customers, our providers, our members. That was a strong motivator when things got difficult for people. The call to action was, ‘Remember, we’re serving our customer.’ And that was continuously stressed.

We tried to partition our focus. Every day, we had a meeting about the transition; we had another meeting about the business. I spent a lot more time on the pre- and post-transition activities, but some of my colleagues spent the majority of their time on running the business.

Another aspect of that is there was a business plan throughout the entire process. So instead of a lot of the staff’s emphasis on, ‘Well, what does the transition mean to me and my singular goals to go from one system to another system?’ you’re actually here to achieve business objectives from day one. That becomes the emphasis. The ‘what does it mean to me on a day-to-day basis,’ you can’t ignore it. But you can refocus people on the right work.

You do have to recognize that there is change. There will be change. And you have to expect change at the individual level, as well. I think the messaging is continuously, ‘We are going through change. There’s lots of it. It will affect you. You have to recognize to some extent you’re moving into a new environment.’ Be very straightforward and clear about that.

How to reach: Priority Health,