From Moore's Law to Barrett's Rules, Michael Malone's May 16 op-ed piece on departing Intel CEO Craig Barrett in The Wall Street Journal is another one of those sketches of an iconic business leader that holds more universal messages. About to step down, Barrett led Intel as President (since 1998) and CEO (since 2005) in the years following the legendary founding leaders: Andy Grove (of "Only the Paranoid Survive" fame), Robert Noyce, and Gordon Moore (visionary of "Moore's Rule"). This pithy article describes Barrett's peripatetic style while codifying his managerial wisdom in a way that can be very useful to health care leaders.
Moore's Law is a quantitative prediction of the future (that the number of transistors possible to put on a chip will double about every two years) which, remarkably, has endured since he proposed it in 1965. It's been easy to document, but its application is strictly limited to the hi-tech world. It's also hard to believe will hold forever. "Barrett's Rules" on the other hand are softer, less easily measured, but more universal and, perhaps, holding more potential for permanence. Let's examine their relevance for health care leaders.
Rule 1- The business is bigger than the business: Barrett was apparently keenly aware of the context or environment of Intel's business: "Mr. Barrett has long recognized that, with a company as large and influential as Intel, governments and cultural forces loom as large as any competitor." While investing heavily in research, he also understood that the product alone would not assure success.
In health care, it has historically been tempting to maintain "internal focused" on patient care or technologic operations and profitability. But the regulatory, market, economic, and cultural environments are now bigger than our products and services. Getting patient care and safety, drug development, or care management right is "table stakes" compared to navigating those waters. Health care leaders now need to supplement their strong clinical (technical) training and experience with more than a casual understanding of the broader disciplines of business, organizational psychology, and policy. My own consulting and coaching work with health care leaders focuses heavily on enhancing their strategic, planning, managerial, and general business skills. I don't think this expression of Barrett's Rule 1 will go away.
Rule 2 - Don't mess with Moore's Law: For Barret, of course, this means don't underestimate the pace and importance of technologic growth:
"...every few years "some company will say, 'What's with the pell mell rush to improve our technology every two years? Let's slow down to say, four years, and only have to invest half as much capital.' It always sounds like a cool idea, and it always ends up with that company losing market share."
True for health care as well. Budgetary choices are the daily challenge of health care leaders. However decisions to forego keeping up with clinical innovations, information or diagnostic technology, or operational redesign can have disastrous clinical and market consequences for health delivery organizations and health related businesses. The point being, in a field as expansive in knowledge as health care, if you're not ahead, you're probably behind. Keeping Rule 2 firmly in one's consciousness would be wise for health care leaders.
Rule 3- Invest during hard times: This blog has previously addressed the wisdom of investment in down economies (Health Care Leaders Should Preserve R&D Spending in Down Times). Rule 3 says we are right:
"...history has shown that the ...decision [to maintain the company's traditional level of capital investment right through the darkest days of the dot-com bust] -- for which Mr. Barrett took a lot of flak -- may have been the most brilliant of his career."
As a health care leader, if you believe in Rule 2 it seems you need to play it out in good or bad times. This requires plenty of courage as well as a keen business sense that is not clouded by current, and generally temporary, financial hardship. If you're not thinking ahead, others are. The business pages these days are full of articles about companies hedging their austerity strategies by preparing for economic recovery. History shows they are likely to emerge as the strongest players when things improve. We are not exempted in health care.
Rule 4- Consensus is good -- except when it isn't: This is one that health care leaders, by and large, have already learned through the school of hard knocks. Barrett clearly understood how not to implement and electronic health record, a more efficient clinical service model, or innovative patient safety initiatives:
"We started talking about changing our factory model and one of the veteran managers -- one of those guys who kind of ran his own little kingdom like a prince, said, 'Are we going to discuss this? Are we going to get a vote on this?' And I said, 'Yeah, we'll vote -- the only problem for you is that I get 22 votes.' In other words, there's a time to let everyone twist the knobs and a time to make a decision."
While health care leaders are (appropriately) wired to persuade and include a broad range of stakeholders to the degree possible, there's a bottom line to the need for progress and improvement. And in the end, it's leadership's role to draw it clearly.
Rule 5 - Follow the business, not Wall Street: Simply put, pay attention to the needs and interests of your stakeholders (patients, customers, partners) and not those who set expectations for their own gain. For health care leaders, this might mean hanging tough with vendors, payors, or regulators whose agendas simply aren't in the best interest of your patients or customers. It's hard to stand up to pressures that appear to reward you in the short run - but if it's bad for the core business in the long run, it's deadly.
Rule 6 - When something works, don't re-invent it, reproduce it: There's no shame in failing to do it differently the next time - especially if it works really well. There is no inherent value in doing it differently if the problem has already been solved:
"Perhaps Mr. Barrett's greatest contribution to the semiconductor industry was the concept of "Copy Exactly," the absolutely exact reproduction of successful existing practices and facilities in other locations."
This concept is the basis for "best practices" in clinical care and health industries. Creativity is great but imitation of a well functioning process can flatter health care leaders with repeatedly excellent results. What's bad about that? One of my current hospital clients, in the process of rolling out an electronic health record, has adopted a set of guiding principles. High on the list is recognizing that others have effectively solved the problems that lay ahead for them: "We're not that different; We don't need to reinvent the wheel." True of health care when thought of as a business, isn't it?
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