I was reading two issues of the Harvard Business Review simultaneously (a hazard of being overly busy), so I rapidly became aware of complementary articles that appeared in successive months addressing the related issues of candor (What's Needed Next: A Culture of Candor by James O'Toole and Warren Bennis a full article in the June HBR) and transparency (Heed the Calls for Transparency by Sam Wilkin in the Forethought section of the July-August issue). The latter was just received by subscribers so the online link is not yet available so if you don't subscribe watch the HBR web site in the coming week for it. Both are essential business reading for health care leaders.
Surprise: New Leadership Measures
O'Toole (a Professor at the Daniels College of Business in Denver) and Bennis (also a Professor, at USC) begin by suggesting that in the future, corporate leaders will be evaluated not solely on their ability to produce business results but by:
"...[a]new metric of corporate leadership...the extent to which executives create organizations that are economically, ethically, and socially sustainable...whatever their strategies and tactics, we believe prudent leaders will see that increased transparency is a fundamental first step."
The case is made on the basis of a new definition of "increasing shareholder value" which encompasses newly important shareholder non-financial values including organizational behavior in the ecologic, employee relations, and social consciousness domains. So while it will be necessary to deliver "business results," strategies that achieve a great bottom line will not be sufficient to earn corporate leaders the recognition they seek from (Boards or shareholders) if this is accomplished through tactics that don't also demonstrate taking the high road in corporate culture and behavior.
Candor, Performance, and Public Expectations
So Medical Directors and CEOs of hospital, managed care organization, medical group, and health related businesses should pay close attention! Those corporate leaders are probably ourselves as well.
O'Toole and Bennis make the case for the inextricable relationship between internal candor and public positioning:
"...no organization can be honest with the public if it's not honest with itself, we define transparency broadly, as the degree to which information flows freely within an organization, among managers and employees, and outward to stakeholders."
This is particularly important for us to appreciate in this time of increasing public scrutiny of everything from finances to clinical outcomes to the safety or care, devices, and pharmaceuticals. O'Toole and Bennis further make the case that without internal candor and transparency, effective and durable innovation is impossible due to internal communication feedback barriers that make it impossible to frankly share information about new product, technique, and process performance.
In the past, perhaps, it was routine to launch new products, services, or care programs letting let the marketplace later reveal safety and efficacy flaws - but no more. And we've observed more than once that organizational leaders are increasingly held accountable for those failures - first by the public and the courts and next by Boards and shareholders.
And Wilkin, in his short piece on the repairing international financial crisis, makes the strong case that the need for candor is global and that it won't go away:
"Rather than hoping that public pressure will go away, banks and asset management firms should embrace transparency. Doing so will help them rebuild their reputations more quickly."
Pilots, Cockpit Crews, and Health Care Teams
So how are organizational leaders to behave? Well for starters, here's how NOT to behave - learned from studies of errors made in cockpits:
"The stereotypical take-charge "flyboy" pilots, who acted immediately on their gut instincts, made the wrong decisions far more often than the more open, inclusive pilots who said to their crews, in effect, "We've got a problem. How do you read it?" before choosing a course of action.
This has everything to do with the culture of transparency (or not) in the work setting:
Leaders are far likelier to make mistakes when they act on too little information than when they wait to learn more...pilots who'd made the right choices routinely had open exchanges with their crew members....crew members who had regularly worked with the "decisive" pilots were unwilling to intervene--even when they had information that might save the plane.... "
Health care leaders, and "persons in charge" in general, are frequently welcomed as problem solvers. However, resisting the temptation to default to being an action oriented, "decisive" leader long enough to get the right information from a range of informants can actually be a significant part of many solutions.
8 Steps to a Culture of Transparency
O'Toole and Bennis provide the leadership recipe for candor and transparency in sufficient detail to help you think about your personal leadership style as well as how to retool a health care organization to make your leadership role consistent with how you are likely to be measured in the future. The headlines from their HBR article are below. I thought about commenting on each one based on what I see in health care organizations but the commentary would stretch another page or more.
I'll just say that steps 2,3,4,5, and 7 are the ones most needed in the health care organizations I consult to.
While most of the steps below are intuitive from their titles it's well worth reading the full article for details and nuance:
1. Tell the truth 2. Encourage people to speak truth to power 3. Reward contrarians 4. Practice having unpleasant conversations 5. Diversify your sources of information 6. Admit your mistakes 7. Build an organizational architecture that supports candor 8. Set information free
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