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Quote of the Month
"The best way to have a good idea is to have a lot of ideas."
Dr. Linus Pauling |
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Strategy Trumps Shortage
The The American Hospital Association released a report titled: Workforce 2015: Strategy Trumps Shortage. Some of the report's recommendations are:
Hospitals require leaders who:
1. Have an appetite for leading change
2. Actively cultivate an engaged workforce
3. Are willing to be early adopters of innovative workforce practices, and
4. Welcome new generations to their organizations
Hospitals need to develop new work models that increase efficiency, workforce satisfaction and patient outcomes. Proven process improvement strategies developed by firms outside of health care may expedite efforts to improve performance.
Hospitals need to help staff develop the skills necessary to work effectively in teams.
These recommendations fall precisely in line with the philosophy, beliefs and the actual work performed by Hospital Focus 5 in hospitals. Our systematic, organization-wide approach involves all employees on all shifts in all departments as team members focused on key strategies and guided by hospital employed facilitators or internal consultants.
Contact us for a copy of the report.
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In his book Why Smart Executives Fail, Sydney Finkelstein provides an excellent example of what can happen to a company when they forget that, in the end, it is employees who will make the difference between success and failure.
Healthcare providers, in the throes of evaluating their strategic options in the face of increasing competition and impending healthcare reform, must look at their employees - particularly executives and managers - to determine whether they have the right people to deal with the consequential changes. They must examine whether the skills of their team match up with the demands of new strategy. Do the executives and managers have the depth of experience to succeed if, for example, you require them to be more entrepreneurial in how they grow revenue?
A spectacular strategic misstep at General Motors more than 25 years ago provides an excellent example of what happens when you focus on strategy and not the people.
In the 1980s, Roger Smith, GM's Chairman and Chief Executive Officer, was frustrated, Finkelstein wrote. He faced two thorns in his side:
"First, low-cost, high quality Japanese imports were starting to gain a foothold in the U.S. Market.
"Second, GM's labor relations were horrible. What to do? The questions Mr. Smith asked aren't hard to reconstruct. What was the biggest expense on GM's balance sheet? Workers. Who prevented increased operation speeds by threatening to strike? Workers. Who made the production line errors that resulted in defective cars? Workers. Who made life difficult for managers by refusing to do what they were told? Workers."
"Bold, brilliant in its simplicity and, in retrospect, more than a little loony," Smith's solution was to solve all of his problems at once by eliminating his workers. Robots could work night-and-day with no wages, no complaints, no strikes, and no worker errors.
But there was a fatal flaw in this if it sounds too good to be true, it probably is strategy to turn back the Japanese auto invasion and return GM to global dominance. Instead of installing the lean manufacturing techniques that made the use of robotics more effective and, to this day still defines how Toyota operates, GM's senior team focused on the idea that robots would make their life easier and profits more robust. This obsession with machines over people led to what manufacturing engineer Charles McElyea described as "automated confusion" and fueled GM's spectacular demise which ended in 2009 with a humiliating government bailout and forced bankruptcy just to stay in business .
When you leave people out of the strategy equation, you are in effect pouring gas onto fires of failure.
The question for healthcare leaders who are facing a critical point in our industry's future is whether they match the demands of their market and the strategies necessary to survive with the skills of their workforce. Mr. Smith learned a $45 billion lesson. He focused on a strategy, not the real problems that threatened his organization.
Far too many healthcare organizations are traditional top-down, command-and-control operations. That management approach does not foster strong middle managers and market conditions that require rapid response to strategic shifts will have significant financial and clinical consequences.
As healthcare organizations review their strategic options, the Chief Executive and Chief Human Resource Officers need to plan for an enterprise-wide systematic evaluation of the strengths, weaknesses and skills of the existing team - from the executive office to shift supervisors to determine whether they can adapt.
This cannot be a one-time exercise. It should become, at a minimum, an integral part of the organization's quarterly operations review. While the dashboard data is important, if you focus only on those metrics you will miss equally key indicators of your future success or failure.
GM's Mr. Smith lost focus. It was an expensive lesson. During the time that automation was touted as THE ANSWER to all their corporate woes, production costs actually increased.For the $45 billion he invested in automation in hopes of defeating the Japanese invasion, GM could have bought both Toyota and Nissan, according to one analysis.
John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.
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"To raise new questions, new possibilities, to regard old problems from a new angle, requires creative imagination and marks real advance in science."
Albert Einstein
"There's a way to do it better-find it."
Thomas Edison
"Creativity is not the finding of a thing, but the making something out of it after it is found."
James Russell Lowell (1819-1891)
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Strategy as Focus #3 of Focus 5
Everyone "does" strategy... leaders get together every year or two, talk and then write a plan for the next few years. They may or may not use consultants, but chances are that the plan ends up in a very nice 3-ring binder on multiple shelves. How can that make Strategy one of the five things organizations must continuously focus on? Of course, if that was all there was to Strategy, it wouldn't be something to keep a constant focus on.
Actually, what I just described above happens all too frequently in hospitals across the country. But that isn't the real problem. The real problem is that even when organizations ask key strategic questions and take a rigorous approach to strategic planning they rarely implement or execute strategies well. The facts are:
- Only 10% of the strategies that are effectively created are effectively implemented.
- 85% of executive teams spend LESS than one hour per month discussing strategy.
- 60% of organizations do NOT link budgets to strategy.
- 95% of the typical workforce does not understand the strategy.
In other words,,,
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We don't talk about strategy at the executive and board level
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We don't measure strategy
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We don't tie money to strategy
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We don't tell employees what our strategies are
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We expect employees to implement strategy at the front line
As you'll see in Kristin Anderson's article below, it takes effort to translate strategy into operational terms and make strategy everyone's everyday job. Remember too that strategy is just one step in a continuum:
Mission: Why we exist.
Core Values: What we believe in.
Vision: What we want to be.
Strategy: Our game plan.
Strategic Initiatives: What we need to do.
Measures: Help Implementation and Focus.
And lead to
Personal Objectives: What I need to do.
It's not enough to Plan. We must Plan AND Communicate AND Measure AND Manage! Only then is it possible to generate breakthrough results. Too often we worry about the wrong stuff, like protecting (and therefore not communicating) our plans. Keep this quote in mind every time you hesitate in telling your employees, your physicians, your board about your strategy:
"Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats." - Howard Aiken
Let me know your thoughts. Email me and also follow me on Twitter!
Ken
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Strategy: A Goal Without a Plan is Just a Wish. (Larry Elder)
By KRISTIN ANDERSON. President, Halsa Advisors
Strategic planning is fundamentally about allocating scarce resources across numerous competing priorities. Most hospital and health system strategic plans, however, do little to focus and prioritize, rather avoiding or deferring difficult choices. The end product tends to read like a campaign speech: We're going to provide high quality care, grow volumes, make patients happy, attract the best talent, and have outstanding financial performance - with very little focus as to who's going to do the work and how we're going to do it. No wonder our unattainable aspirations tend to gather dust on a shelf.
Still, there are a number of things that can be integrated in most planning processes that will result in a more focused, more motivating, and more actionable plan. Several of these are described below.
Avoid "canned" templates. Frameworks are helpful to make sure you have considered everything, and that's about it. Many organizations focus strategy around "pillars" that might include Operations, Growth, Service, Quality, Finance, and People. Strategic plans built strictly around a format like this err on the side of "filling in the box" for each of these areas, and are, let's face it, mind-numbingly boring. No doubt all of these areas are important and require focus, but the vision of where we want to be should drive the strategies, rather than the framework driving the plan.
Choose a theme. It is much easier for staff to understand what they need to do when strategies tie to a singular focus than to a broad range of seemingly disconnected objectives. If the theme for the next three years is expanding our presence and visibility in the market, we may focus strategies around primary care and ambulatory development, physician recruitment, branding and marketing, community outreach. If the theme is deepening our clinical expertise, our strategies may be around subspecialty physician recruitment, technical expertise of our staff, technology investment, and best practices. Most organizations will make more progress over time focusing sequentially on growth, quality, efficiency, and service, rather than trying to do everything all at once.
Challenge your environmental assumptions. Are your competitors the same today as they were when you last updated your strategic plan? Are the services that used to be profitable still the ones generating margin? Are the technology trends that organizations like The Advisory Board predicting appropriate for your community, or does your medical staff tend to adopt technology earlier or later? Is your medical staff model supporting or hindering your ability to achieve your vision? Sometimes there is a gap in what leadership believes to be true and what is actually true, particularly when some time has passed since the last planning process.
Use data appropriately. Analysis in support of a strategic plan should be thorough, validating or challenging our assumptions, and should provide insight that supports the strategic direction. At the same time, don't expect data to establish the direction. Data is imperfect, asymmetric, and usually insufficient alone to build a case for change (if people made decisions based on data, none of us would be overweight!).
Be vigilant about the strategies that are almost working. Most organizations have an easy time resourcing strategies that are working and abandoning strategies that are failing. Most dangerous are the ones that almost work. The tendency is to give these more time to turn around, investing more resources and diverting resources away from strategies that are effective. Plan when to pull the trigger, and pull sooner rather than later.
Involve staff - lots of them - in operationalizing the plan. Often staff are not brought into the loop on strategic plans out of fear that strategies will be leaked to competitors. Assume the following: 1) it is uncertain whether your competitor will be more successful knowing your strategies, and 2) it is certain that you will be less successful if your staff does not understand your strategies.
At three separate organizations where I've worked, the CEO has publicly stated a goal to be a Solucient Top 100 Hospital, and all three organizations achieved the goal within three years. The goal was focused, motivating, and achievable, and rolled out in a way that was communicated, measured, and managed. Staff knew the criteria, knew where the gaps were relative to criteria, knew where to focus their efforts, and, motivated by their own successes, looked for direction on "what's next".
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Northwest Flight 253's Lessons for Leaders
Rosabeth Moss Kanter
The botched bombing of Northwest flight 253 from Amsterdam to Detroit haunts millions of air travelers facing (and wanting) tighter airport security. The lucky passengers on NW 253 subdued the terrorist and witnessed minor fires but no explosion. Now the important question is why was he allowed to board the plane in the first place?
Leaders should ask themselves the equivalent question about what can go wrong and how to prevent it in their own domains. Global financial crashes, regional power outages, laptops with pyrotechnic batteries, or tainted food ingredients, to name just a few, present similar problems. The NW 253 scare offers an instructive example of the roots of systemic failures. Every leader can learn a few lessons.
Human intervention. Databases are only as good as the human intelligence of the people who use them. The SEC was evidently tipped off to that something was fishy about Bernard Madoff but did not investigate deeply or stop the scam. Somehow hackers find gems in theft of data files, and climate change deniers can leak hundreds of British scientists' emails to the public, yet information pointing directly to the NW 253 suspect was lost in a watch-list database that is not particularly large. Data entry is a first step that means nothing by itself. Yet many professionals seem to think that if they send one email announcement, their job is done; now it's someone else's worry. Instead, it is critical to check whether messages are received and acted on. Leaders must push for relentless follow up, holding people accountable for what happens after they do their part.
Pattern recognition. To be meaningful, isolated pieces of information must be connected. The NW 253 debacle was preceded by missed signals and uncorrelated intelligence - however partial, incomplete, and non-obvious - as an unnamed federal official told New York Times reporters. But isn't non-obvious the point of secrets? If somebody stumbles upon a bit of information but works in isolation, he or she might not see its significance. In an era of social networking, instant messaging, and continual tweeting, it should be easy to encourage people to share and connect their data points to find patterns. Leaders should reward pattern-recognizers.
Wider communication. Communication across silos is even harder when external partners are involved. If news reports are accurate, British officials were investigating the NW 253 terrorist and put a hold on his student visa into the U.K., but might not have alerted American authorities who had previously issued a visa for the U.S. In a system with global dimensions, harmonization of standards should be a goal even if it means one partner ceding some protected information to others. Leaders should stress the importance of passing on items of value to others in the extended family network.
Credible leadership. Top leaders, especially the CEO, must take systemic failures seriously and personally, acting fast to assert control and reassure affected parties. Johnson & Johnson's former CEO James Burke became a management legend by immediately removing all Tylenol from shelves and the market after a tampering scare - no waiting, no obfuscation. In contrast, President Obama lost credibility following the NW 253 episode, by sending messages criticized as overly mild from a luxurious vacation before eventually springing into action - just as President Bush lost credibility by what was widely considered an overly casual reaction to Hurricane Katrina.
Furthermore, leaders should not let subordinates underplay matters of grave importance. After NW 253 landed safely, Homeland Security Secretary Janet Napolitano made statements about the system working when it had obviously failed. If there is uncertainty about what happened, leaders can say so. But if they are absent or casual, they lose support for the big changes to redesign the system.
Leaders set the tone about how seriously everyone else takes the situation. And that, in turn, determines how hard people work on the analysis, communication, and coordination that can catch the next vulnerabilities before they get out of hand (or board the plane). Accidents might be "normal" byproducts of complexity, as Yale sociologist Charles Perrow argues, but human actions can still make a difference.
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