Leading Strategic Change at Davita: The Integration of the Gambo Acquisition
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Answer the following 4 questions in a 3 page paper using APA formatting.
- What was the situation facing Kent Thiry when he took over as CEO of Total Renal Care?
- What were the purposes of the transformation? Do those purposes differ from other transformations
you have experienced or heard of?
- Why focus so heavily on values and culture in the turnaround?
- What was the DaVita�s strategy and what did they do to reinforce that strategy in their culture and
values?
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Leading Strategic Change at Davita: The Integration of the Gambo Acquisition
Leading strategic change at Davita: The integration of the Gambo acquisition is a case
on organizational development and change. The following discussion will indulge in reviewing
the situation facing Kent Thirty when he took over as the CEO of Total Renal Care. The
discussion will also engage to comprehend the purposes of transformation at DaVita, and how
those purposes resemble other forms of transformations. It also discusses why the transformation
relied heavily on culture and value. Finally, the paper will summarize by illustrating DaVita’s
strategy, and what was done to reinforce that strategy in the organization culture and values.
When Kent Thirty came to lead the Davita company, the organization had been beset
with financial, operational, moral, and regulatory difficulties. In fact, the company is presented
with technical bankruptcy when Thirty took on the leadership of Davita. Thirty argues that the
company was being investigated by the SEC, sued by shareholders, had turnover at over twice
the company’s current levels, was running out of cash and more importantly, according to Thirty,
it was not the happiest place to work (Callahan, 2009). Thirty comments that there was no typical
turnaround at the organization. This is because DaVita’s culture and leadership showed that the
DaVita management team’s focus had been on creating a strong and positive value based
organization where all levels of the organization had an emotional commitment to its success.
This foundation was heavily borrowed from its mission and vision created by more than 700
CEOs working before Thirty came in. The situation that faced Thirty extends to the fact that the
LEADING STRATEGIC CHANGE AT DAVITA 3
rebirth strategy was based on the belief that they had to create something larger than themselves
so as to be successful. This situation led to the integration of Gambro acquisition in successful
evolution of both culture and operations.
The purpose of the transformations was to save the company from government
retrogressive legal challenges due to improper coordination between health stakeholders such as
pharmaceuticals. Another purpose was to ensure that the employees were trained, employed and
maintained. The purpose of this is transformation was shifting, leaving of jobs by PCTs, whether
temporarily, or permanent, which led to a non-significant provision of quality services to
patients. The transformation also encompassed on reducing financial problem emanating from
DaVita’s early mode of management (Solomon & Breckon, 2013). Most importantly, the agenda
behind the transformation was to achieve good clinical outcomes. This was to be promulgated by
reinstating cordial relationship between medical practitioners and patients on the dialysis. This
kind of transformation has worked up to today with Robert’s Arm youth Centre and Lafayette
general Medical Center where integration of acquired enterprises has led to improvement in
healthcare provision, retention of employees and saving of money in the treatment of the
patients. The focus of the transformation rely heavily on values and culture in the turnaround
because it is according to the hospital’s professional values/ethics to give patients the best
services possible. Culture in the turnaround is important as it enable the company to focus on its
purpose of which, as a business entity, is to make profit and attract more clients.
The integration of Gambro acquisitions such as Accenture strategy was importantly
hierarchical and formal than DaVita and did not have a strong people-oriented culture. The main
reason for the strategy was to counteract the tendency of one out of every five-dialysis patient
dying each year. This tendency of patents deaths created, not only a difficult work environment,
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but also and lots of emotional strain. The purpose of the transformation extended to attention to
detail (Lawler & Worley, 2011). This strategy was painstaking attention to operational details
and compliance with government regulations. This is because legal problems could arise from
actual dispensing of health services to patients who do not need them. Legal problems also meant
that improper correlation between drug companies or physicians with the company might entail
kickbacks for patient referrals or purchases of pharmaceutical supplies. This strategy relied
heavily on value and culture of the organization in that there had to be a proper record keeping
and considering ethical behaviors to the ongoing success of the dialysis (Hobbs & Burton, 2008).
Managing financial outcomes as a result of Gambro-acquisition integration was another focus.
The strategy relied on values and culture because the opportunity rested on making difference in
operational results relying heavily on small, but important behaviors and decisions. Reliance on
values is exhibited by the initiative to carefully usage of supplies to avoid waste and maintaining
appropriate stock levels so that inventory costs were not unnecessarily high, but avoided
emergency ordering. Reuse of dialysis filters and daily maintenance of the dialysis machines to
ensure both life-long of equipment and lower cost per treatment were to be implemented.
Another strategy of the Gambro-acquisition integration is employee attraction and
retention. Retention of teammates was significant because turnover was costly, employing
findings and training replacement (Callahan, 2009). This was meant to counteract the temptation
of (PCTs) Patient Care Technicians for better paying jobs. This strategy rested on values and
culture because practitioners being consistent with one healthcare setting were to ensure that
patients at nearby environment get the recommended health services. In summary, integration of
any acquisition, for instance in the case of Gambro, in management and realization of objectives
is significant to any health setting. This is because it enables a company to make profit, while at
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the same time providing quality services to the patients. It also enables a company to diversify its
markets.
References
Callahan, D. (2009). The cheating culture: Why more Americans are doing wrong to get ahead.
New York: Houghton Mifflin Harcourt.
Hobbs, D. P., & Burton, T. T. (2008). Enterprise lean six sigma implementation: A step-by step
business transformation methodology. Boca Raton, Fla: J. Ross.
Lawler, E. E., & Worley, C. G. (2011). Management reset: Organizing for sustainable
effectiveness. San Francisco, Calif: Jossey-Bass.
Solomon, C., & Breckon, T. (2013). Fundamentals of digital image processing: A practical
approach with examples in matlab. Hoboken, N.J: Wiley.
