1. The pre-bid phase: Barbarians at the gate or El Salvador?
The initial meetings between the two-tier board of the hospital and representatives of the PEF are top secret to avoid negative publicity and internal turbulence. At this stage the two board members need to decide whom to involve. It is decided to actively involve a senior legal officer. After several secret meetings the board members decide to make a public announcement that the hospital is seriously looking for alternative investors and is investigating the possibility of private equity involvement. For most employees the news is not immediately picked up and taken seriously. After a stream of negative announcements over the past two years about low performance levels and after years of relatively low-ranking positions in Dutch hospital lists (e.g. the AD hospital top-100) most employees are aware of the sense of urgency for a major organisational change. For them a private equity intervention is too abstract and difficult to assess. From here on all members of the management team (the level below the two-tier board) are also involved in the negotiation process with the private equity firm. Now, the manager of the research and treatment department, the manager of clinical, the manager of administrative department and the manager of the general and technical service are involved. Medical specialists, the medical staff, are consulted and the supervisory board is informed as well.
The HR director, who is part of the management team, is able to convince the board that from this moment on the works council of the hospital should be informed on a regular basis. The director also suggests informing the client council of the hospital. Although there is no legal requirement for this information sharing, the HR director makes a strong plea for this type of works councils’ and client councils’ involvement to maintain effective employment relationships in times of turbulence. As the media picks up the story of a possible private equity intervention in the public domain this starts up a hot debate about the nature of the private equity firm’s intentions and possible negative impact of such an intervention for the quality of healthcare, the position of the employees and the public values of a Dutch hospital in general, such as accessibility. From this moment on employee trust levels decline dramatically, in particular with regard to employees’ trust in management. Top management response to all the commotion is putting emphasis on the sense of urgency and the opportunity a private equity intervention creates for organisational renewal.