Off Track – Now What?

By Rob Thames

It happens. The organization is off plan…by a lot; and it is not the first time. More than a modest correction or a “wait until next month.” Many factors were likely involved, but the relentless dynamics of the market have overwhelmed a longstanding management team. It is akin to a cyclist who has slipped back from the peloton due to chronic cadence deficit – and now the gap is widening.

When a leadership change is made while the organization is on plan, it is often political. When an organization is off plan, and a leadership change is NOT made, it is often political (or paralysis). But when performance is off plan and the board and/or corporate office makes a CEO change, what are the key considerations?

Decision Making Traps: Decider Beware

Leadership Transformation Series

Decision Making Traps: Decider Beware

This is Part 4A in this Four-part Leadership Transformation Series (LTS); 4B will follow.

Transformation in healthcare is personal: it requires the transformation of health system leaders. The LTS begins to speak to key differences in some of the fundamentals of transformational vs traditional leadership in healthcare.

This article focuses on how we make decisions: 4A Reviews decision-making errors.

4B Addresses how to mitigate decision-making errors

4A Healthcare Transformation and Decision-making Errors

Leaders – and their organizations - succeed or fail based on their decisions. Yet the evidence is clear that our decision making is perilously fraught with biases and irrational behaviors of which we are not even aware. These biases are so ingrained in our psyche that, like water to fish, we cannot imagine that they are even there, much less clouding our view – regardless of how “well-intended and objective” we believe we are. In short, bad decision-making is largely hard-wired.’ Just as many medical errors are associated with unexplained variation in medical decision-making (How Doctors Think), so too are many leadership errors are associated with unexplained variation in management decision making.

Traditional change is oriented in the past; it involves more, faster, better, but not different (Daniel Prosser). Transformation is future-oriented; it requires the creation of something from nothing, i.e., letting go and giving up something in the past to create something new. This means that, to do transformation well, it is even more important that our hidden decision biases be flushed out and made explicit. Leaders on a transformation journey are at higher risk for decision making traps and consequences than in traditional change. Said differently, leadership decision making in transformation is less forgiving.

A brief review of categories and types of decision and judgement errors include the following:

The Operating Model: Closing the Strategy-Execution Gap

You have a strategy. How do you rate your organization’s execution of that strategy on a 1-10 scale? For most, it is not high – or as high as they would like. Closing the strategy-implementation (aka, the knowing-doing or what-how) gap is the leadership Achilles heel of any business, but especially for hospitals, a business recognized by Drucker as the most complex organization to lead. Given that his observation pre-dated some of today’s larger and more evolved and blended academic-community healthcare systems, the complexity he referred to then has only increased. Across industries, the results of studies consistently identify unsuccessful execution for the vast majority of strategies; and the results of CEO surveys cite execution as the biggest current challenge, but reasons for such failure and concern vary widely. A sampling of HBR articles on the topic cite too much of an internal focus, poor CEO preparation in both strategy AND execution, “a people problem.”

Perhaps the most common trait about healthcare system strategies is the perception of their authors that their strategy is unique. As JP Morgan Healthcare Industry Conference observers noted, most health system strategies look alike. What is unique is the execution – the How. Notes Rosabeth Moss Kanter, “When a strategy looks brilliant, it’s because of the quality of execution” (Smart Leaders Focus on Execution First and Strategy Second, HBR, 11, 2017). Because transformation is a journey and one size does not fit all, it is more apt to say there are no integrated healthcare systems, but many integrating systems. For healthcare systems to evolve and execute well, they need an operating model that will help them ‘discipline the change process.’ They need to have a way that is lived by all.

Systemizing Healthcare: The Integrator Role

The leadership need for ‘the Integrator’ is re-shaping traditional CEO and COO roles.

A few decades ago, the role of ‘the Integrator’ in healthcare leadership did not exist – at least not in the form needed today. Unlike roles with new names – CTO, CMIO, CPHMO, etc. - the same titles of CEO or COO may be used for a healthcare system, yet the shapes of these roles bear little resemblance to those with the same titles used in a hospital or other ‘vertical.’

While a hospital administrator/CEO is expected to stay close to the pulse of acute care operations, the system CEO is expected to transcend operations to assure an aerial view/perspective, i.e., to become more visionary and system-focused. The transition from hospital to system requires a view that is less entrenched with how we have run hospitals and more focused on the population served. Despite use of the same title for both roles, it is the difference between being ‘tied down’ and ‘freed up.’

‘Pushing up’ the system CEO role creates space between the maximization of operations in an individual vertical, e.g., hospital, physician practices, and pre- and post-acute services (possibly insurance) and optimizing a system of care for a population. The integration leadership challenge for health systems involves numerous business verticals or silos. But this is only a start: to ‘systemize’ healthcare systems, integration of IT/digital, consumer engagement and culture to a new level are needed. In this space, created between the elevated CEO visionary role and numerous operating entities, is the work to ‘systemize.’

The Fourth Discipline: Transition Management

Many compare the healthcare transformation journey to one of our oldest Olympic sports: “It’s a marathon!” Although this might reflect the persistence, resilience and endurance sentiment, I offer an analogy upgrade from one of our newest Olympic sports: “It’s a triathlon!’

Why?

First, transformation requires mastery of multiple disciplines. We – and our organizations - may have competency in one or two disciplines, but adaptive learning is required to develop and integrate the different and stronger skills needed for next level or breakthrough performance. We cannot count on simply doing more of the same ‘one foot in front of the other’ plodding and grinding to advance our mission – our people are burning out. Unlike in the run or bike, the first triathlon discipline – the swim - does not ask as much of the legs. While the upper body provides most of the forward propulsion, for swim speed it is more important to reduce drag. Drag is not a material factor in running, but it is in running our organizations – and barnacles, barriers and anchors come in many, mostly self-inflicted, forms.