April 2009 Archives

On April 27, The Economist (web version) published a brief piece titled Entrepreneurship in its regular "Idea" column in which it briefly defines and characterizes entrepreneurship - well done, but no biggie. More interesting was a reminder that one aspect of entrepreneurship is "intrapraneurship" - defined as "the introduction and implementation of a significant innovation for the firm by one or more employees working within an established organisation". I thought it was timely for health care and physician leaders to examine this a bit further so I surfed around, connected a few dots from my own consulting experience, and learned a few things worth sharing here...

Don't Wait to Innovate by Dev Patnaik and Peter Mortensen of Jump Associates is a short column about improvements at a disability claims processor that appeared in the online edition of Business Week on April 27. It was touted as an example of the potential power of innovation for enhancing performance in an already successful business. How could this be relevant to real health care? Well, I saw it completely differently. It was really all about how injecting humanity into a business resulted in decreasing resource use and liability - thereby enhancing customer satisfaction, decreasing costs, and increasing profitability. Sound like outcomes we could use in health care? Read on...

It's one thing to have sharp vision about where you want to go. It's another thing to maintain visual acuity when conducting oversight over where others want you to go. How Group Decisions End Up Wrong-Footed, Jason Zweig's column in the Wall Street Journal of April 25 examines the myopia exhibited by some corporate fiduciaries during the financial crisis as they considered the selection and recommendations of "expert advisors." Health care leadership teams, often using clinical and technical experts, determine strategic organizational direction. Financial advisors, architects, strategic consultants, and executive recruiters among others can contribute substantially to this process. But the checks and balances between leadership teams and their advisors must remain intact. We can learn something from Zweig's insights into what went wrong for these teams in the recent economic turmoil...

Splitting hairs? Not really. Read Hanging Tough in the April 20 print issue of The New Yorker (while not really business press it is the press commenting on business). This piece by James Surowiecki examines the nuances of leadership decision making in both risky and uncertain times. While covering some of the same territory as R&D Spending Holds Steady in Slump, April 6 Wall Street Journal - and the subject of this blog's April 8 commentary Health Care Leaders Should Preserve R&D Spending in Down Times - Surowiecki focuses squarely on characterizing the strategic investment dilemma currently faced by senior health care leaders...

Here's a read that's worth a few minutes in your busy day. Decoding Resistance to Change, by Jeffrey D. Ford and Laurie W. Ford ( April 2009 issue of Harvard Business Review) takes a quick look at strategies for defeating resistance to change. Resistance being something health care leaders who operate at the cutting edge of science and technology never see, right? Not...

An academic medical center client recently asked me to advise on developing a Departmental and programmatic strategic plan. My first reaction was OK, nothing new, let's go. But I soon found myself pausing to have a discussion about what that should look like this year in light of the economy and it turns out that our conversation pretty closely tracked: Strategic planning: Three tips for 2009, published in the April 2009 McKinsey Quarterly. You can register on the McKinsey site for free and view this article as well as a post-publication survey of readers here. While health care leaders (and followers) tend to glaze over when forced to think about strategic planning, the nuances discussed by these authors bear consideration...

I thought I was pretty good at connecting the dots to make relevant connections between seemingly unrelated stories and experiences. That's the thesis of this blog - connecting the general business press to relevant learnings for health care leaders. Well, August Turak has trumped me with his Forbes.com series entitled Business Secrets Of The Trappists - lessons gleaned from his many years of making primarily spiritual visits to Mepkin Abbey, a Trappist monastery in South Carolina. Part 1 and Part 2 (of four) parts were published online on April 14 and the others are forthcoming on a daily basis later this week. Of course, it's only fair that I now use a wild card to one-up him by taking the connections between monks and business and extending them to relevant learnings for health care leaders...

One of the opportunities in a down economy - if you are not too down yourself of course - is the potential to pick up some bargains. Which is not without its rewards - and its hazards. The April 3 issue of Business Week features How to Make Acquisitions in a Down Economy as the cover article in the Small Biz section. In this article, Amy S. Choi passes on some wisdom and experience which can be useful to health care leaders as they consider purchases - be they physician practice acquisitions, hospital or clinic takeovers, or purchases of health care related businesses...

The April 13 Wall Street Journal exploded with news about the impact of the economy on jobs which for the first time included bad news about health care. Major articles on health care job losses and adverse nursing employment trends provide concrete reasons for health care leaders to seriously consider contingency strategies for downsizing should these trends expand. Today's Journal contained a discussion of personnel reduction strategies in industry. Weighing Furlough vs. Layoff, by Cari Tuna, addresses one aspect of the problem that is worth a read by health care leaders...

When Internal Collaboration Is Bad for Your Company by Morten T. Hansen, appeared in the April 2009 Harvard Business Review and Getting Togetherness was published online on Economist.com on April 7. Both examine collaboration within organizations. The interesting news from Professor Hansen (U.C. Berkeley and Insead) is that despite the charge for internal collaboration across industries, it is not a "no brainer" in terms of benefit. So by extension, it may not be the best tool for health care leaders in all circumstances...

R&D Spending Holds Steady in Slump, appearing in the April 6 Wall Street Journal, chronicles the benefits of continued corporate investment in research and development during down economic cycles. In this page one article, authors Justin Scheck and Paul Glader observe that: "Big R&D spenders say they've learned from past downturns that they must invest through tough times if they hope to compete when the economy improves." This may hold a lesson for health care leaders.

Mssrs. Scheck and Glader report on the difference between companies that maintained R&D spending in poor economic times and harvested substantial returns from new products and technologies (Apple's investement between 1999 and 2002 resulted in the launch of its iPOD) and those that cut back in those periods and subsequently lost market share or competitive edge (General Electric and Motorola in the same period). I suspect these lessons, and others from the corporate experience that are cited by the authors, likely apply to health care products and devices as well. We just don't usually think of health care providers and payors as major investors in R&D. Think again. We do invest, albeit differently. Our investments in new medical technology, infrastructure, personnel, and training may not be research but they certainly qualify as product development and innovation in the programs and services that are the core of our businesses.

So the lesson for health care leaders is that when under pressure to cut "unnecessary cost," continued improvement of quality, safety, IT, and customer service - investments crucial to our reputation and therefore our revenue base - should be last rather than first on the cutting block. Perhaps it even makes sense to increase these investments in pursuit of competitive advantage at a time when others are reticent to invest.

Left untended and stagnant in a shifting and highly competitive environment, health care delivery organizations are at risk of losing advantage. And as an industry that must regularly adopt new scientific and technologic innovations, we must continually reinvent our ability, our systems, and our people to receive and effectively implement the fruits of innovation efforts in other health related industries. Which qualifies us as investors in R&D in my book.

The April 7 Wall Street Journal contained several useful articles on investing and managing in the current bear market. Perhaps I was jaded because I was on a plane all day, but I found the whole edition to be interesting. I picked Avoiding Bear Traps by Suzanne McGee to comment on. This feature piece was ostensibly about pitfalls to be avoided when investing after having sustained great losses. And it's worth a read for that reason alone - unless you managed to avoid the 30-40% losses the rest of us suffered in the late 08-early 09 market. But the same framework of pitfalls can be in considering a variety of risk-return scenarios related to decisions made regularly by clinical and executive health care leaders. So read the article and consider this examination of Ms. McGee's six traps in our context...

I may be slow. It took two hits about Sergio Marchionne before I got him on the blog. The impetus to take the leap came when Business Week published the April 2 article, How Fiat's Marchionne Can Help Chrysler by Carol Matlack. But I do take credit for noticing and not forgetting when I first thought there was something here for health care leaders -after reading the Harvard Business Review's Fiat's Extreme Makeover in December of 2008, which was authored by Mr. Marchionne himself. Read the HBR piece first, for its strong focus on leadership culture, to see why Marchionne may be able to teach Chrysler - and health care leaders - a few things...

Disengagement Party appeared on economist.com, the web portal for The Economist, on March 31. This brief unattributed op-ed piece explored the relationship between employee engagement and the current economic recession. It opened by questioning the belief that the high levels of employee engagement seen in successful companies over the past decade were due to factors distinct from economic success. The article went on to explore some things that might be done to re-establish - or at least stem erosion - in engagement during a down economy. There are some pearls here for health care leaders - who have always relied upon the personal commitment and mission orientation of employees without having the luxury of being able to bestow large economic rewards to motivate the workforce...

How Toxic Colleagues Corrode Performance is a short sidebar article with a big impact by Christine Porath and Christine Pearson in the April 2009 Harvard Business Review. The authors also wrote the upcoming book: The Cost of Bad Behavior: How Incivility Is Damaging Your Business and What to Do About It. The article is a 3 minute read, at most. But it provides data that drives home a haunting point for health care leaders - and more specifically physician leaders. Namely that the misbehavior of physicians, executives, and managers extracts a far greater toll on organizations than the pain felt when complaints are made.

Porath and Pearson have made a study of incivility in the workplace for years. The results of their poll of several thousand organizations revealed that common "benign" misbehaviors such as rumor mongering, berating management, unfairly taking credit for the work of others, blaming others for one's shortcomings, etc. take a severe toll on co-workers. The article states the following results:

• 48% decreased their work effort,
• 47% decreased their time at work,
• 38% decreased their work quality,
• 66% said their performance declined,
• 80% lost work time worrying about the incident,
• 63% lost time avoiding the offender, and
• 78% said their commitment to the organization declined

As we all know, health care workplace settings are far from immune from these. We see incivility by physicians, nurses, and clerical employees in office, hospital, and corporate settings. The bar for intervention into benign misbehavior is high. It is largely seen as the result of "personality quirks" that are grey areas for managerial intervention since they fall outside of the ethical and professional guidelines set up to deter and correct "malignant" misbehaviors such as dishonesty, sexual harassment, overt intimidation, falsification of data or documentation, discrimination, etc.

But these results suggest that "mere" incivility is far from a benign condition. Given the increasing pressures we are under to maintain an efficient and productive workplace, it is critically important for health care leaders to be aware of the measurable collateral damage that can result from these behaviors.

Then comes the challenging task of developing awareness, behavioral guidelines and both peer and managerial intervention strategies that result in a culture of civility. And doing this in a fashion that avoids two undesirable situations: (1) the creation of a juvenile code of behavioral rules; and (2) failure to clearly set limits on destructive "benign" behaviors.