Be More is a weekly one-on-one podcast about how everyone can thrive in the new world of work. Hosted by Peakon’s Chief Evangelist, Patrick Cournoyer. This week: Mike Rude, CHRO at Option Care Health, on why evolving company culture doesn’t mean losing sight of your core values.
Mergers and acquisitions are, by their nature, a period of change. Change can represent many things for a new business partnership, and can often be both a source of positivity and anxiety. What’s most important is ensuring that both businesses align where it truly matters: company culture.
That’s not to say aligning company processes and strategies aren’t important — far from it. But for a merger to see both sides of the equation truly thrive, it’s important that there is an equivalency and understanding of shared values. For Mike Rude, CHRO at Option Care Health, everything else will naturally fit into place if you get that right.
If you’re in the process of a merger, or even smaller scale organisational changes within a company, tune in now, check out the key takeaways, or read the transcript below.
How culture drives companies forward
Company culture is everything. It’s something that sets high-performing companies apart from the rest. Culture is defined by the individuals within the organisation, and how those individuals engage with each other in making decisions, in collaborating, and in executing the organisational strategies. As an example, Mike speaks from his experience at Option Care Health where every decision is made from a patient-first mindset. This attitude is baked into the culture.
Reevaluating values in the face of mergers
Mike emphasises how important reevaluating values and talking about the cultures of two organisations is during the M&A process. When you bring organisations together, you should be thinking about how these organisations will work together. Are they compatible? When there is a huge gap between values — that’s when things can become challenging. Mike’s suggestion is to quickly get the right people in who support the key values, and reconsider the fit of those who don’t align with the culture and values.
Values should not be something that change on a whimMike Rude
Empowering front-line leaders
The discussion around decision-making rights is always important. It’s essential to understand the differences in how companies approach decisions when bringing them together — if one has a top-down approach while another includes mid-level managers, that can make for a messy merger. In order to achieve harmonious internal alignment, this is another aspect of culture that needs to be defined early on.
Being customer-focused without forgetting employees
In order to drive customer engagement, companies need to first drive employee engagement. Employees that feel positively about the organisation that they represent will showcase that in the way how they interact with customers. Companies now have to be considerate of the full inner life of each employee, and not just where they are from 9-to-5. Wellbeing is still often overlooked — especially in the healthcare industry where it is assumed that employee wellbeing is a given.
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Mike Rude: If we don’t have the right people with the right mindset of the values that we need, then it’s going to fail. One of the decisions — and I think organisations if they do this well, will be very hard and pointed on these decisions — is getting the right people in place quickly and moving people out who do not support those values, who are not aligned.
Patrick Cournoyer: Welcome to Be More, a podcast by Peakon. This is where everyone at an organisation can hear different and meaningful perspectives on how we can all thrive in this ever-changing and constantly evolving world of work. I’m your host, Patrick Cournoyer.
There’s been a lot of discussion recently about corporate culture and how it’s changing at many organisations. These discussions have been filled with mixed emotions. It’s clear that the way we work, including our physical work environment, has had to change and will continue to evolve. However, something that’s not as clear is how this will impact our organisational culture, and could all of the work that we have put into strengthening our cultures unravel in the upcoming chapters?
Today, I am joined by Mike Rude and he’s the CHRO at Option Care Health. Mike has been building corporate cultures for over 30 years in global organisations, such as Stryker, and he’s going to share his unique perspective on cultural evolution during times of organisational change through dramatic growth, mergers and acquisitions, and currently, as we’re finding our way through this pandemic. Mike, it’s great to speak with you today.
Mike: Patrick, I look forward to our conversation. Thank you very much.
Patrick: Great. I think a good place to start out is: could you tell us a bit about the business of Option Care Health?
Mike: Sure, absolutely. Option Care Health is based in the United States and we operate only in the United States. We are a home healthcare services provider. We’re about 6,000 employees, about a $3 billion business and we have about 3,000 clinicians, nurses, pharmacists, pharm techs, dieticians who are providing care — infusion-based therapy care — to patients primarily in the home. As more and more patients are moving from the hospital setting to the alternative site and primarily the home in a more comfortable, secure, and lower-cost setting, we provide a variety of infusion therapies to patients in the home.
We have been around for 40 plus years. We were at one point a part of the large Walgreens organisation, and then five years ago, we separated from Walgreens, and then most recently, about 15 months ago, went through a significant merger with one of our larger competitors to create Option Care Health and we are now the largest home infusion services company in the United States.
Patrick: It sounds like you have had an extremely busy 15 months, Mike.
Mike: I think that’s an understatement, Patrick. I think that is.
Patrick: Yes, exactly. Not only did you go through a significant organisational merger — dealing with how to combine two cultures together and create a new organisational culture for the new business that you’ve created through joining two separate cultures together. Then all of a sudden 2020 comes along and probably finding some positive movement with creating your culture and then all of a sudden, the pandemic hits and now we’re going through another significant amount of change. We’ll talk about that and dig into that and talk about these 15 months that you’ve experienced.
One of the reasons why I really wanted you to come on the podcast is because it’s clear that you have a lot of passion and knowledge and experience around how important corporate culture is and how important it is for businesses to focus on it as scaling happens or as change happens. In your words, could you just describe a little bit about how and why you feel corporate culture is so important for a business?
Mike: Well, I think you’re probably aware of the Peter Drucker comment or quote that culture eats strategy for breakfast. I truly believe it because I think I’ve been fortunate to be in different types of businesses, but the common denominator, I think of what differentiates high-performing companies that I’ve been a part of and situations that were not performing as well, I think at the core is culture and it pervades every aspect of the business. At the heart of the matter, it’s all about the individuals within the organisation, how those individuals engage each other in decision-making, in collaboration, in executing the strategies of the organisation, and creating an environment.
I will tell you, particularly in the healthcare services business that we are in — the people are the differentiator. In my past experiences at Stryker, for example — that was in manufacturing and orthopedic manufacturing, — clearly the caliber of individuals, the service component was critical, but we were making orthopedic implants, and so there was technology and R&D involved in that. In a healthcare services business, when we have nurses going into the homes of these patients, when we have pharmacists who are dealing with family members over the phone, or directly with folks, that service aspect and the relationships and the capabilities of the individuals really are the differentiator within the business and differentiate us from our other competitors.
It’s not that our widget is any better, but it has to be our service, it has to be our people. Frankly, the culture that exudes out of those people and those processes that really are going to differentiate — particularly in the service business.
Patrick: There’s a couple of aspects that can disrupt culture and disrupt the evolution of culture to name a few that are affecting the work environment right now. Remote work — that is clearly something that we’re all talking about, and I’m sure your organisation have been considered necessary workers over the past nine months. There’s a whole other element as well, as far as remote work, but also still working in the environment that we’ve been in. Obviously, the pandemic has had a significant effect on all of us, but you talked about mergers and bringing two teams together and these past 15 months. How would you describe the culture at Option Care Health today and how has it changed over the past 15 months?
Mike: Patrick, I would be remiss if I didn’t say upfront that we’re still a work in progress. Only 15 months into the merger; any kind of culture integration is not a 6-month, 12-month process. It takes several years to fully integrate cultures. What I would tell you is as I think about our culture and how I would describe it, it’s important also to think about the foundation of who we are because I think it is so much about the culture. As a healthcare services company with our clinicians and having to provide this extraordinary care, first and foremost within our culture is a patient-centered focus on everything that we do.
The patient is in the middle of all our decision-making. The patient is in the middle of all of the investment decisions that we make on what we do in providing exceptional quality care at the patient’s home. We are interacting with people at some of their most vulnerable states — not only the patients but also their families, in these situations. I’d tell you, first and foremost, our people come at their work from compassion around the patient first and foremost, and everybody else supporting those frontline folks have to have that framework and mindset as well.
That being said, we’re very results-oriented. We have this strong bias for action and being responsive. There’s a pace in our service industry and in healthcare in general; that ever ongoing, changing nature of healthcare requires us to be adaptable and to constantly adapt to the changing environment. There’s this sense of urgency and a pace within our organisation and there’s a bias for that as it relates to our decision-making and driving results.
The other aspect of our culture, I think that is critical, is the sense of collaboration and teamwork. I know everybody says that, but it is vital within our organisation because no one function can provide the complete service and capabilities to our patients. Our selling organisation needs to interact hand-in-glove with our operations team and to make sure there’s a smooth handoff; who then work with our nursing teams and our clinicians; who then work with our reimbursement organisation in this whole life cycle of dealing with our patients. And then all the support functions need to have an appreciation of that interdependency as they support each of those different functions.
This idea of collaboration, teamwork, we talk about one team within Option Care Health and aligning around that. I think if I had to pick the bedrock of the culture today, that’s what it is. I would also tell you, we’re still, as I said, a work in progress. There is still a bit of aspiration — we’re still not fully baked on some of these aspects as we work through the consolidation as we are harmonising processes. And maybe we can talk a little bit more about that as we talk about the impact of a merger in that dynamics of that but I think that for me helps articulate the core of the culture today of Option Care Health.
Patrick: I was recently reading an article that was talking about 2021 and the business landscape and how organisations are going to fall into a couple of different categories. Some are really going to thrive and continue to grow on their own and do incredibly well, depending on what industry they’re in. The second is a lot will potentially fail and that’s incredibly unfortunate but I think right now with the world economics being the way they are, that predictions are that there will be a number of organisations that are really going to struggle. But there’s going to be a significant amount of consolidation in the market that there’s going to be quite a bit of merger activity, quite a bit of acquisition activity.
We’re already seeing it in the current quarter towards the end of 2020 and the predictions are that we are going to see quite a bit more merger and acquisition activity across many industries. You have some great recent experience with that over the past year and a half. The one question to start with around mergers — because this is probably going to be a reality for many of our listeners that their organisations could be considering this or will be considering this in the not too distant future.
A part of the conversation that I’ve been having with people around corporate culture and a bit of a fear around how culture might unravel or change is looking at their values as an organisation because, as you know, and I’m sure that you probably have experienced many times, values very much drive the results of culture. Like people get very connected to values, get connected to the behaviours that are supportive of values, and many organisations today are re-evaluating their values because — they have to, their businesses just fundamentally changing their work environments are changing.
And again, that’s creating a bit of angst or fear at organiSations because they’re saying, “Oh, we have to look at reanalysing our values, potentially changing our values. We know that values are cornerstones for our culture. If we change our values, will it increase the potential of our culture changing? Will that have a negative impact?” To be concise with the question is: when you went through this merger of two organisations to form Option Care Health, did you look at your values? Did you reevaluate them? Did you change them? If you did, did that impact how your culture evolved?
Mike: Patrick, I think that is a great question and anybody going through M&A really needs to think about this and make sure that this is on their agenda for that. Short answer is yes, absolutely. One of the first things we did after the deal closed was bring together our top 70 leaders across the two organisations and for two days specifically engage that group in talking about: the cultures of the two organisations, the articulated values of both organisations, but then the discussion about going forward as a new organisation, how do we feel about those values and is there a nuanced or refreshed articulation that we have to have on that?
I do think one thing — and as I was listening to your question, it really struck me as, your question about will some organisations thinking, will I have to change my values? I would say that’s a watch out for me, because values should not be something that change on a whim, get changed just because we’ve acquired somebody, because hopefully, if you’re doing it right, as you are bringing organisations together, you are thinking about how these organisations will work together and are they compatible with each other?
Even though they may be in the same industry, the same line of business, if the values and how you operate and how you think about your customers, and how you think about your people, how you think about decision-making, is vastly different, then you’ve got a big challenge in front of you. I have been involved in situations where it’s been a challenge with that. I will tell you the first thing that we did as we brought these people together to set and articulate that was we also articulated the leader characteristics that we wanted because first and foremost is: if we don’t have the right people with the right mindset of the values that we need, then it’s going to fail.
One of the decisions — and I think organisations if they do this well, will be very hard and pointed on these decisions — is getting the right people in place quickly and moving people out who do not support those values, who are not aligned. No matter how great a performer they were, no matter what they contributed, if they are not aligned with the values — and this is a decision that we made as we brought our two organisations together, that was one of the most critical decision points in who got what job. Were they aligned? Were they good stewards of, were they good role models of the values we had?
I will tell you, we didn’t change our values. The actual labels might have varied a little bit and the number changed, but I would say during that two-day process, we really teased out a new meaning of what we meant. You can talk about compassionate care, for example, or you can talk about trust and integrity, but talking about what that now means with this new leadership group and getting those different perspectives in helped build out and expand our understanding. But at the core, compassion for our patients had to be there.
If somebody was coming into the discussion, thinking that that wasn’t important, and that person was not going to be in those discussions for very much longer. But how we articulated what those values might meant — what teamwork meant in the prior Option Care company and what teamwork meant in the prior BioScrip company, the two organisations that came together as Option Care Health — we had to get people to articulate what that meant, and then come to a new common understanding of what teamwork and operating as one team meant.
I would caution organisations to think about wholescale changing of values, because that’s who you are and that’s what you brought to the party in this integration and frankly, hopefully, is what attracted the two parties to come together beyond just the financial makeup. We had a very concentrated effort in focusing on values right upfront at the time of the integration of close.
Patric: You also mentioned this concept of leadership principles and I agree with you that organisations really can focus right now on — if they don’t have a set of leadership principles or leadership… I will call them principles because I think behaviours need to be created to support principles or to support values to be able to bring these things to life in organisations. Something that we are seeing through the pandemic is leaders have been asked to, and quite frankly, required to step up in ways that they never have before. They’ve been asked to lead in ways that they’ve never had to before from a people perspective.
When you were moving into — so you’ve calibrated the values of the two organisations during the merger, you’ve had this two-day session where you’ve brought these 70 leaders together. Actually, one quick question on that. Do you remember in those days, were there any friction points that stand out to you that you’re like, “Oh, that was a tough thing. We overcame it, but this was a point that we got stuck on and we needed to work through a bit more”?
Mike: There clearly were some pretty heavy discussions about how we operate and how that played itself out in what we wanted the new organisation to be that also impacted the values. We had some very good discussions, debates around what was most important. I would tell you some other things that are affected by the values and the culture are decision rights. How are we going to make decisions? And I think if I were to see, think about the most divergent aspects of the two organisations we brought together 18 months ago, it was around decision rights. How one company made decisions and whether that was more from a top-down approach where another company engaged the frontline managers or middle-level managers into decision-making.
That was a different aspect of bringing these two organisations together. We had to rustle down with what was our philosophy on that. Some people were more comfortable with more control and some people weren’t, and we had to factor that in as well into how we were going to operate. That, I would tell you probably in the early days were some of the more heated, colourful discussions that we had with the leadership team. You had to do that and you had to work that out to make sure that there was alignment on that.
Patrick: I think that many organisations are also seeing that today through the pandemic, which is: how do we empower frontline leaders to be more involved in the decision process where many organisations had decision processes or it was really top-down and trying to involve and empower the voice of employees from bottom-up. A lot of organisations are trying to transition to that right now and that’s a struggle.
We could probably have a whole episode just on that, but I was leading down to a question earlier about leadership principles. As we moved into 2020, and the pandemic hit, and then all of a sudden, leaders are being required to do all of these things, how did you approach leadership principles? Did you have them built-in when you built your calibrated values with the two organisations? Were leadership principles part of that? Then has there been a focus on that over the past couple of months? How was leadership included in the process?
Mike: That actually was part of that initial session. I would tell you, the focus of those two days was around three things. Clearly, articulating what is our organisation’s purpose, why do we exist, what is that true north star that we want all 6,000 of our employees to rally around, and how can we articulate that in one sentence that captures the feeling and the essence of who we are. What are our values, as I talked about, and what are the leader behaviours we need at all levels in order to deliver on that purpose, and for [unintelligible 00:21:53]. That was the focus of those two days. We left that discussion with a template for that.
Now, it’s one thing to be able to put that on a piece of paper and a nice PowerPoint slide and say, “Here are our values and our purpose and our leader behaviours.” The leader behaviours then, we had to — and I think what’s critical then — you have to articulate what those behaviours specifically are.
Integrity is a wonderful thing, drive for results, customer focus, courage. Those are all wonderful labels. I need to be able to articulate: what does that look like for that frontline supervisor who’s working with that nurse, who’s working with that pharm tech, who’s working with that warehouse person on a day-in and day-out basis, so that it can be real for them. That was the work that we also undertook to be able to articulate very clear behaviours in I statements — “I do this, I will do that,” — to make it real for people.
We integrated that then into performance management practice. We’ve incorporated that into an updated 360 feedback tool. We’ve actually included these leader behaviours as we launched a new recognition program so that if I wanted to recognise somebody, I actually had to pick one of the leader behaviours that they were exhibiting to recognise them.
It’s another way to constantly reinforce. As we made organisational announcements we were very specific about articulating why this individual was selected for the role and the leader behaviours they exhibited, that helped warrant their promotion or their movement into a job. We had to be very purposeful about it. Then also, as you know, that frontline manager has to live that day-in and day-out. That is easier said than done. That’s constant coaching. That’s constant feedback with that. Yes, it was critical that we incorporated those leader behaviours from day one.
Patrick: A common thread that I’m hearing in the discussion is this passion around customer experience-centricity, right? Like having this amazing customer experience, and really needing to do that because, as you said, you’re in a very specific point in time in people’s lives where you’re providing care and that’s a very emotional time, probably in many instances. I’ve been doing a lot of research and unraveling, pulling back the onion a little bit around customer-centric cultures, and how that can pair up and support employee-centric cultures because historically, there’s been a bit of a rub there where organisations have been challenged with, we’re very customer-focused, we need to be very customer-focused and at the same time, maybe sometimes customers may get priority over employees’ needs or having the employee be a priority.
I feel that some organisations have really succeeded over the past six months of making some really positive progress in this area with being able to confidently be customer-focused and customer experience-focused, but not at the expense of being employee-focused or employee-centric. How have you approached that at Option Care Health?
Mike: That is another great question. Dave Ulrich, great consultant and advisor in HR space at the University of Michigan, did phenomenal research on the employee-centered business, and in order to drive customer engagement, you really have to focus on employee engagement first, and that service profit chain that he talked about. I think that’s key because you can run into situations where the communication, the articulation from leadership is all around the patient. Then the employee looks at this and says, “Great that you’re taking care of the patient, or you’re putting the patient first, but I’m the one taking care of the patient. Make me happy and I’ll make the patient happy.”
There is significant truth in that. I can tell you in the past organisations where we’ve missed that connection at times, where you may take the employee for granted and you assume that because they’re in healthcare, because they’re a nurse, because they’re a pharmacist, that’s in their nature to do this. But also, at the end of the day, you need to recognise those team members need care and feeding equally as our patients do. I truly believe that if I feel good about the organisation, that I’m a part of, that is going to come out in how I interact with that patient.
We’ve all seen this as we do in our lives: you go to retail stores, right? The person who’s waiting on you is grumpy, they’re not having a good day, they complain about the company, you leave there thinking, “Wow, that company is not taking care of their people. I may not shop there again.” I think that is critical. It’s a fine balance with that. You need to make sure that as you think about a patient-centred business — as I mentioned before, as an organisation — inherent in that has to be how are we approaching our employees?
If there’s a disconnect — so if we talk about having compassionate care for our patients, then I have employees looking at me saying, “Okay, Mike, where’s your compassionate care for me, as an employee, when I have work-life balance issues, when I have to deal with quarantining with COVID, when I have children who have to be homeschooled now, and how flexible are you being? We bend over backwards for our patients. Show me a little bit of that same love and compassion for me.” They are 100% right, Patrick. We have to think about that, particularly now.
This gets into potentially a whole other area where I think the role of organisations going forward is going to require them thinking more about the whole employee, not just the person who’s there from nine-to-five, or eight-to-six, or whatever time it is. I have to think about the whole wellbeing of that person, and what do I contribute as a company to that person, so that they are engaged, so that they are feeling compassion for me so they can share that compassion with their patients. It’s a fine balance. It really is. The unintended consequences are no good deed goes unpunished — when you think you’re going down the right path, that improving situations for some parts of your group, you may be excluding others.
Patrick: I think that’s where some of that fear that I was talking about earlier around cultures evolving is. I do think that there is a bit of fear where people say, “Well, we know we have to be and we want to be incredibly focused on creating…” — I like that concept of the whole employee. Not just the employee that’s coming to the office or creating an office environment but considering all of the aspects now that come with work, and work-life. Like you said, that is complex, and it is becoming more complex. We thought maybe six months ago that that complexity might end in six months, nine months, but it is here to stay for the foreseeable future.
I feel that some organisations are just a bit fearful of: when we talk about the evolution of culture, we have to be focused and want to be focused on our employees putting them centre stage. We also have to think about our financial and business viability for the next 12 to 18 months at a time where, who knows what the world economies and our individual country economies are going to look like over the next year. Customer needs and expectations are changing, and they’re increasing. All of these — there’s like this perfect storm of change. We know we have to just keep going, it’s like we’re in a river, right? We’re going down the river, and we just have to keep — we’re just paddling and trying to figure it out.
When people lose a bit of control, organisations lose a bit of control of what has felt right, and what is felt comfortable, there’s always a bit of fear in change. With what you’re saying today, you’ve really brought some very tangible and meaningful thoughts around like, a) it doesn’t have to be perfect. It’s going to evolve. It sounds to me that — let’s see, or not to put words in your mouth, maybe this actually is a good directed question — if you had to summarise in a sentence or two to these companies that are a bit fearful of change and their culture is potentially changing, what would you suggest to them to maybe relax some of that fear a bit?
Mike: Here’s what I would say. The old adage, adversity doesn’t build character, it reveals it. There’s tons of character building or revealing opportunity going on right now. At the core, as organisations are going through change, I like to simplify things and get it back to: what are the most foundational, fundamental things. And I don’t think, Patrick, these foundational things have changed with mergers, with COVID, with remote work — I think these principles are still clear.
First and foremost, have I articulated and is there that clear, true north, that purpose for my organisation. Am I helping to rally people around that? Because that’s the why. That’s the rationale. That helps me sift through all the noise and all the changing dynamics, because at the end of the day, while how we do our work may change, why we’re doing our work, why we exist is still there. If we can operate with that clear purpose, 9 times out of 10, you’re going to make decisions that are aligned with where we need to go.
The second thing is I think it puts a premium, as it always has been,on that frontline manager, because the relationship that manager has with his or her employees, that authentic relationship — and I think that’s what this pandemic, this work from home is really driving is this need to be more authentic, to ask your employees, how they’re doing? How are the kids? How’s working from home handling? That builds that relationship and that connection with employees, that allows them to work through some of the uncertainty, that allows them to work through some of the imperfections with everything that organisations are going through.
If I had to sum it up in those two things: if you have a clear purpose, and you focus on equipping and educating those frontline managers to have the right skills and be authentic, you’re giving yourself the greatest opportunity to succeed in all this craziness that’s going on right now.
Patrick: Your passion for this is clear, and I appreciate it. We need leaders like you that can speak — from quite a bit of experience over the past two years, but over 30 years of your career — thinking about culture and helping to drive cultural evolution. I feel that another way how we’re going to get through this is just by hearing stories of where things have worked, where they haven’t, struggles that we’ve had, and just feeling a bit more confidence around: we’re all in this together. We’re all going through building our next chapters. Change is okay. We’ve all gotten a bit more comfortable with change and we’re going to have to keep getting comfortable with change, because it’s — one thing that’s constant is that there’s going to be even more change.
You’ve articulated in a very clear way for the audience around some things that they can focus on successes that you’ve had, and really helpful insights. Again, the core of that is all around your passion for this, which I think is if people have passion about what they’re doing, and passionate about the people that they’re working with and what they’re creating, then success will follow. Mike, we could talk for another two hours but I do have to wrap up the conversation for this episode but would love to check in with you again after you another maybe six months or so and see how you’re doing and see how things are at Option Care Health, but just a heartfelt thank you for spending some time with me today and for sharing your perspective. Thank you very much.
Mike: Patrick, thank you very much. I really enjoyed it and look forward to catching up with you in a couple of months.
Patrick: That was Be More, a podcast by Peakon. Be sure to search for Be More in Apple Podcasts, Google Podcasts, and Spotify, or anywhere else that you get your podcasts from. Go ahead and subscribe so that you don’t miss out on any future conversations. On behalf of the team here at Peakon, thanks for listening.
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