Becker's Hospital Review

23 23 CEO/STRATEGY Activist Hedge Fund Buys 8.3% Stake in The Advisory Board Company By Emily Rappleye E lliott Associates — an "activist" hedge fund — bought an 8.3 percent share of e Advisory Board Company on Jan. 11, according to a 13-D filing with the Securities and Exchange Commission. e Advisory Board Company, a Washington, D.C.-based health- care consultancy, recently restructured its healthcare business and laid off 220 employees in early January. e company's stock has been falling in recent years, from $69 per share in 2013 to $36 per share ahead of the Elliott filing, according to coverage of the filing in e Washington Post. Aer Elliott announced it bought a sig- nificant stake in the company, Advisory Board shares jumped 16 percent in early trading, e Washington Post reported. Elliott Management, founded by billionaire Paul Singer, is known for "activist" investments. It oen invests in companies in debt or nearly bankrupt. "We are obviously aware of Elliott Management's 13-D filing and in- vestment in e Advisory Board Company," Robert Borchert, vice president of investor relations at e Advisory Board Company, said in an emailed statement to Becker's. "As with all of our shareholders, we are always open to discussing constructive ideas for enhancing long-term shareholder value. We remain focused on this endeavor and continue to execute on a number of initiatives, including the refined healthcare strategy and restructuring we announced on January 3." n Cleveland Clinic: IBM Partnership Will Not Result in Mass IT Layoffs By Kelly Gooch C leveland Clinic is pushing back against rumors that its partnership with IBM will set in motion widespread job cuts among the system's IT employees, The Plain Deal- er reported. "It is completely not true that there are going to be massive layoffs," Janice Guhl Hammer, senior director of media and public relations, told the publication. In December, Cleveland Clinic and IBM announced a five-year partnership that will expand the use of IBM's secured cloud, mobile technologies and cognitive computing services across Cleveland Clinic's clinical and administrative operations. Fol- lowing the partnership announcement, rumors surfaced of mass layoffs in Cleveland Clinic's IT division, according to the report. However, Ms. Guhl Hammer told The Plain Dealer Cleveland Clinic's IT employees were informed that the partnership could result in only a small number of layoffs. Overall, about 10 percent of Cleveland Clinic's roughly 1,500 IT employees could potentially be impacted by the system revamping some IT operations, which doesn't necessarily translate into layoffs, Ms. Guhl Hammer told the publication. Other scenarios could include workers being employed by IBM or workers remain- ing in positions at Cleveland Clinic. Still, any final workforce decisions as a result of the IBM part- nership are months away, according to Cleveland Clinic. n The Thing About Organizational Culture Most People Get Wrong By Tamara Rosin P eople generally understand organizational culture as something that unifies people around a set of norms, behaviors and values. But this perception overlooks an important reality about culture. Organizational culture is as much about unity as it is about division, according to an article by John Traphagan, PhD, a professor in the department of religious studies and the program in human dimensions of organizations at The Uni- versity of Texas at Austin, in the Harvard Business Review. Dr. Traphagan purports in the article that culture might shape behavior and unify people, but it can also be used as a "basis upon which people contest and counter certain ideas and values while accepting other values associated with a particular cultural context." Even common values that members of the organization agree on — and thus constitute a culture — are not actually so common, Dr. Traphagan suggests. For example, a core value at the University of Texas is responsibility, which the organization formally defines as "to serve as a catalyst for positive change in Texas and beyond." Dr. Traphagan points out that this definition of responsibility is different than his own, which he says involves accountability and duty. Even if most members agree certain values are important, such as "responsibility," "respect" and "honesty," they might have very different ideas about what they all really mean. Dr. Traphagan says the attempt to unify an organization by cultivating a "culture" is really a power play. "Fundamentally, a culture is not a set of (marginally) shared values; it's a web of power relationships in which people are embedded and that they use to meet both personal and collective goals but that can also restrict their ability to achieve goals," he wrote. "Those power relationships can function to pull people to- gether, but they also can pull them apart because they are the product of differential access to resources." Relying on culture to create unity can mislead leaders into believing the core values the company adopts are unques- tioningly accepted by employees, which can lead to the false belief that expressed conformity with such values indicates individual acceptance of them, according to Dr. Traphagan. n

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