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Since launching in 1992 as a nursing
service in western Sydney with
16 clients, KinCare has grown to
have a presence in every Australian
state and the ACT, with over 1,650
staff providing more than one million hours
of care per year.
To get there, KinCare has gained
experience in the acquisition game. It made
its first in 2004, a small provider in the ACT,
then in 2008-09 acquired Wesley Noakes in
Sydney and Careforce in Melbourne. Most
recently, in 2011, the KinCare Group bought
Stanhope Nursing Service and Private Care.
Chief operating officer Therese Adami, who has been with
the organisation for 13 years, says they refer to the Stanhope
transaction as a merger rather than an acquisition.
Partly because they were slightly bigger than KinCare, she
says, but importantly, because they had a number of strengths
with their local leadership and service provision models.
"We felt that by purchasing Stanhope we could add value
to the Stanhope business, but we could also add value to the
KinCare business so together we were going to be stronger."
Volume is one way to add strength, says Adami, because the
bigger you are, the more you can put back into the business.
"You can invest in more sophisticated systems and you can
attract the best people. It gave us that opportunity to make sure
we can have a really strong national direction."
She says another strength is an increase in services they
can offer existing clients, through upselling or cross-selling
where Stanhope had aged care packages and KinCare had
MANAGING THE CHANGE
In the short- to medium-term, mergers and acquisitions require
investment in change management, Adami says.
"We had a good project management office. One of the key
lessons is you have to keep a close eye on your existing business.
For both the existing and new businesses, you need to have clear
measures of success."
The first thing to do is get all the data available to understand
how the business is performing. And because you can't do
everything at once, you need to prioritise resources and
outcomes, Adami says.
To keep people along the journey you need to develop and
communicate clearly, a vision of the future business because staff
need to know the what, why and how they fit in, she says.
"It allows people to make decisions about where they want
to be. You need to keep them up to date on what's happening
and why. You need to use a change management methodology
which includes strong leadership and communication coming
KinCare used the ADKAR change methodology, which focuses
on awareness, desire, knowledge, ability and reinforcement.
Overall, Adami says the payback period is estimated at
four-and-a-half years but given value and growth, it will end
up being less.
A good fit
It needs to be a good strategic fit for both the acquirer and the
merged entity, Adami says.
"There may be a benefit for doing that, such as we found that
there were clients we could offer a broader range of services to."
It is imperative to know the value proposition including the actual
and potential value for each business and the new entity, Adami
says. That could be volume, key people in their organisation,
markets you would like, extra services you could offer existing
clients, or financial advantages, she says.
"Never lose sight of the people," Adami says. "The key
element in this industry is the relationships between the
staff and the client."
Clients are typically happy, which is why they stay with the
service, so it's important to maintain and enhance that value.
And staff have been working successfully in their culture so it is
equally important to continue to recognise that because when
you make significant changes you need to understand the impact
on them, she says.
You need to have an energetic, focused and credible management
team with the skills to lead, communicate the vision and keep
people engaged, Adami says.
"Don't try this if you don't have the desire to make it work.
You have to believe in the vision so people come along with it.
People love managers who are going to make them feel safe and
secure. Otherwise they don't want to stay and you really don't
want a lot of turnover." n
Managing a merger SERVICE SNAPSHOT: KINCARE
✓ Over one million care hours of in-home services delivered in
✓ In-home support in health, community, health and lifestyle, and
✓ Sectors: aged (68 per cent), disability (13 per cent), health (7
per cent) and private (12 per cent)
✓ 1,659 staff nationally comprising 1,432 people in the field and
227 office-based employees
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