For nearly a year there were serious discussions regarding a merger between Sanford Health (headquartered in Sioux Falls) and M Health Fairview (Fairview Health Services + University of Minnesota Physicians). Both organizations envisioned disrupting Twin Cities and Minnesota healthcare, they touted cost efficiencies, additional medical research, the ability to offer “world class” healthcare to Minnesotans, and larger profits for more and better facilities. But shortly after the announcement, the planned disruption backfires.

Then, the merger it suddenly went poof. Why?

The idea itself didn’t sit well with Minnesota healthcare, governmental, labor, citizens, and University of Minnesota leaders. U of M Hospitals, owned by FHS, would be led by out-of-state Sanford should the merger succeed. The U of M sought $1 billion from the State of Minnesota to buy itself back so it would not be controlled by an organization based in Sioux Falls. Some disputed where the profits would end up. Others were worried that “world class” healthcare was down the list of priorities.

Many factors, but one underlying issue: no shared values

Potentially losing control of U of M Hospitals to Sanford (from Sioux Falls) was unthinkable to Minnesotans. The two brands had very different values. When the brands’ values are mismatched disruption just doesn’t work, and can actually backfire.

Consequences for brands

And that is what happened this summer when the two sides called off the merger. Since Sanford has a small footprint in the Twin Cities and throughout Minnesota, it’s brand was largely untarnished in its primary marketing area.

On the other hand, the Fairview brand took a beating. There had been legislative inquiries. Meetings were held throughout Minnesota at which many decried the merger. The state attorney general expressed concerns about it. One consultant wondered aloud about Fairview’s ability to properly fund the University of Minnesota medical school.

Disruption is a necessary strategy in today’s business world. However, disruption only works when a brand matches its values with those of its customers. And when disruption doesn’t work, it backfires.