- Walmart and Humana have partnered on a Medicare drug plan that allows patients to have prescriptions filled at Walmart pharmacies, but attempting to meld corporate cultures is quite a larger task.
- Companies that are set in their ways in style, structure, processes, and communications may resist new ideas that can pave the way for progress.
Among the core corporate principles of health insurer Humana Inc. is its commitment to “inspire health.” Humana proudly declares on its employee benefits webpage, “We’ve made it our company’s mission to help people achieve lifelong well-being.”
Retailing giant Walmart, which is reportedly in talks to acquire Humana, has displayed quite a different attitude about healthcare insurance. The cost-conscious company recently cut health benefits for employees of the online retailers it has purchased, and has been parsimonious in providing health insurance for many of its workers. Tens of thousands of Walmart employees who put in an average or 30 hours or less receive no health care coverage, while Walmart’s relatively low-paid full-time hourly workers confront high deductible health plans that make it difficult for them to afford proper medical care if they fall ill.
This may be just the just the tip of the cultural iceberg in a potential clash of cultures between Walmart and Humana.
If a deal is consummated, Walmart, a brilliant, innovative company, has the potential to disrupt the health insurance industry and actually push down the cost of health care, as it has done in retail. But that effort could be blocked by Humana employees resistant to Walmart’s authoritarian style.
Executives at companies planning to merge often focus on anticipated innovations and synergies, while remaining oblivious to a vast gap in cultures that not only prevents realization of those goals, but also gums up the gears of the combined organization once the merger is completed. Walmart and Humana have partnered on a Medicare drug plan that allows patients to have prescriptions filled at Walmart pharmacies, but attempting to meld corporate cultures is quite a larger task. Companies that are set in their ways in style, structure, processes, and communications may resist new ideas that can pave the way for progress. As a result, potentially disruptive concepts never get off the ground.
One may think of this phenomenon as organizational autoimmune disease. A body suffering from an autoimmune disease misinterprets a healthy substance as a foreign invader, leading its cells to attack the perceived invader. Similarly, in encountering new initiatives, employees may perceive a threat and try to kill off the innovative ideas, even if they might be beneficial for the future of the company.
Walmart and Humana will need talented change agents—internal executives or outside consultants—who can lead innovation and improve processes because they are critical in the push to overcome organizational autoimmune disease. Effective change agents serve as ethnographers who identify, study, and gain expertise in cultures and their differences; anthropologists who understand human behavior in relation to varying cultural environments; and diplomats who can find ways to bring people together. To bridge cultural divides between organizations and within them, change agents also must be interpreters, enabling employees to speak to each other in terms they all comprehend.
In health care, which has a history of being resistant to change, this can mean breaking down barriers, translating between hard-driving businesspeople, fiscally-prudent accountants, sober actuaries, cautious attorneys, and academically-oriented scientists, to find commonalities, and clarify the importance of accepting risk for the sake of pursuing dynamic innovation. By ensuring all parties understand the larger goals of the organization and their roles in achieving those objectives, the change agent encourages employees to work in unison rather than in opposition. Once people are speaking a common language, they can see beyond cultural differences, come to share goals and work as a team.
Unfortunately, there aren’t enough change agents who successfully navigate organizational barriers. Healthcare executives, venture capitalists, and entrepreneurs have all told me of their efforts to solve healthcare problems within silos because cultures in the industry have failed to meld adequately to encourage problem solving by large companies and provider organizations. If a deal is done, Walmart and Humana will have their work cut out for them.
Change agents who understand cultures within and between organizations and are skilled at bridging those differences can be essential to overcoming organizational autoimmune disease. That achievement can foster innovation leading to a great idea seeing the light of day instead of being killed off, be it a new process, product, or even the successful completion of a strategic merger that may hold great promise.
Date: May 11, 2018