Recently I gave an overview of the issues that would face nonprofit boards with a tongue in cheek concept or prediction that I called the “Quadruple Challenge Plus One”. I introduced the idea by saying:
Looking into the future for all boards and management teams I can predict that we can count on for sure what I facetiously label as the Quadruple Challenge Plus One:
- There will be continuing downward pressure on revenues.
- Increasing regulatory complexity and persistent audits for compliance and the detection of fraud.
- Continuing demands from all payers, the government and patients for efficiency and value. These demands may force some boards to consider mergers and affiliations.
- Operational costs will continue to rise disproportionate to revenue.
- The “plus one” is the evolving professional workforce shortages and growing professional stresses relative to current work flows and the workforce shortages. This negative workforce reality will occur on top of the growing problem of “burnout”. We are moving toward the day when there will be less than one primary care physician for every 10,000 American adults. There will be more elderly patients and more patients with complex medical problems. The boards of nonprofits may discover that this is a bigger issues than the pressure on revenue.
The more I look at the list the more I believe that it is absolutely true that boards are and will continue to face these issues in the present and the near future of at least the next ten years. I did say “all boards and management teams” but these are only the very high level concerns and do not really give management any guidance in how to approach the specifics of what will change for them in the proximate future and what new management skills and competencies they will need to acquire to successfully lead their organizations.
Boards and management will be challenged to understand and implement all the changes that will insure the continued success of the organizations that they lead. There has been a lot written about leading change and why it is so hard to do. Recognizing the need for change is the easy part. Deciding what to change and how to engage everyone in the process of change is the hard part, especially when so many people are already running hard to survive for a lack of change.
Perhaps you have read John Kotter and know all about “burning platforms” and the necessity to create a sense of urgency. Kotter certainly believes that our usual response to a need to change is to first create strategy and that is wrong for many reasons. His first point is that pausing to create a strategy is a delay in the involvement of most people and shields the majority of the people in the enterprise from either the necessity or the opportunity to do anything. For Kotter, job one in his eight step program of change management is to create a sense of urgency. Step 2, building a guiding coalition also proceeds strategy which for Kotter is something that a larger group does. As excellent as Kotter’s advice is it lacks specificity for healthcare. All of his points need to be understood and respected and the advice applied to this moment but I think that there are some other more specific challenges for healthcare executives
The first challenge for you as a part of management, or as an “informal leader” who is concerned about the future of healthcare and the proper response of your organization, will be to lead others to understand that the defining characteristic of our time is the continuous need for change in an environment of almost universal uncertainty. As I have said many times, healthcare is a pure VUCA environment characterized by volatility, uncertainty, complexity, and ambiguity. Healthcare is a VUCA environment which is just a fractile of our larger VUCA world. VUCA describes our whole world from the issues of global warming, through international relations, and right down to the lack of prosperity and safety that people feel in their neighborhood and describe in terms of “inequality”. Our platforms often feel more like they are exploding than burning.
The second challenge is to recognize that what has worked before is not working well now and may well not work at all in the future. The need to respond to the changes that are being forced by the downward pressure on revenue and the increase work created by changes in the regulatory environment will be with us for a long time. We will continue to need to deal with getting paid less while suffering from the annoyance of being scrutinized more. To those demands add the requirement for increased transparency about how you do business and the quality of the results that you get. If you can deal with all those demands, know for sure that you will also soon feel the compulsory shove coming from CMS and other payers forcing you to make the transition from “volume to value” and acquire the competency to feel comfortable accepting increased performance risk for the care of populations.
The third challenge is to put your personal interest after those of clients, community, and the organization. This is perhaps the hardest challenge. Not many people want to go through a change, especially if the system is working for them, if not others. Management at every level and sometimes even non management professionals have a personal stake in the status quo even when the outlook for future success is limited in the current configuration. We like what we know. We fear what we do not know. Some people whom I know have had the audacity to admit that their goal or hope is to ride out the last few years before retirement and leave the change to those who follow. I have never had the courage to say, “You should retire today and get out of the way!”.
The fourth challenge is to recognize that cosmetic changes will only make the issues worse. The change needs to be transformative and will touch everyone and every process. Workflows from the past are not consistent with the needs of customers, the resources available or mission of the organization. Some axiomatic foundational principles, like individual clinical autonomy, will change. The culture of organizations will need to change. The core of the fourth challenge is to recognize that leaders and managers must demonstrate the change they advocate. The old management tools, processes and attitudes will not work. The first manifestation of change should be observable in leaders.
The fifth challenge is for managers and leaders to discover, learn, and teach the competencies that will be the platform upon which the transformation for a better future occurs. It’s been over a quarter of a century now since Peter Senge and others talked about the learning organization. The Fifth Discipline was published in 1990. Ironically, in 1990 the fifth discipline on the list was systems thinking. You can find a list of the five disciplines in many places but Wikipedia’s list will do:
- Personal mastery is a discipline of continually clarifying and deepening our personal vision, of focusing our energies, of developing patience, and of seeing reality objectively.
- Mental models are deeply ingrained assumptions, generalizations, or even pictures of images that influence how we understand the world and how we take action.
- Building shared vision – a practice of unearthing shared pictures of the future that foster genuine commitment and enrollment rather than compliance.
- Team learning starts with dialogue, the capacity of members of a team to suspend assumptions and enter into genuine thinking together.
- Systems thinking – The Fifth Discipline that integrates the other four.
This list of five challenges for the future is surely imperfect. It’s one man’s list looking at the future from the perspective of someone whose professional future is in the past. Looking through the rear view mirror of life I think that I can say without much fear that this list of five challenges for the future is the same list I have followed with a growing awareness since 1985. I am sure someone else might describe the five challenges for management for the future from a different perspective, but I am equally convinced that there is some merit to this offering.
How is your current leadership style working for you? Is it up to those challenges? My approach has been to look for advice and to try on the offerings and the experiences of others to see if they work for me and give me something to offer to those I am trying to serve. Management theorists have been looking for new approaches for a while and the shelf on change leadership in any bookstore or library is one the longest shelves. Daniel Pink impressed us with a need for “right brained thinking” in his book A Whole New Mind: Why Right-brainers Will Rule the Future. One of my favorites guide books has been Leaders Make the Future: Ten New Leadership Skills for an Uncertain World by Rob Johansen. Johansen is a futurist who suggests that we need new competencies to successfully manage in the future. It is an interesting list as you discovered if you looked at the link. If you did not check out the link here is a list presented by the author of that review:
- Maker Instinct: Leaders should approach their responsibilities with a commitment to build and grow their ideas and connect this energy with others.
- Clarity: Leaders should be clear about what they are creating, but be flexible about how it is accomplished.
- Dilemma Flipping: Leaders should turn problems that cannot be solved into opportunities.
- Immersive Learning: Leaders must be learners, especially by doing.
- Bio-empathy: Leaders understand, respect, and learn from nature
- Constructive Depolarization: Leaders must be able to calm tense situations and bring people from different backgrounds together for constructive engagement.
- Quiet Transparency: Leaders should be open and authentic about what matters without engaging in self-promotion.
- Rapid Prototyping: Leaders should work quickly to create early versions of innovations.
- Smart Mob Organizing: Leaders must create, engage, and maintain social networks.
- Commons Creating: Leaders should stimulate, grow, and nurture shared assets that benefit others.
If you want to hear more, let me recommend that you spend 10 minutes looking at a video that begins by articulating the responsibility of management to lead through an environment that is volatile, uncertain, complex and ambiguous.
Over the years I looked for answers in books and articles. I developed my own ideas and adopted better ideas when I came across them as presented by others, but I am certain that until I was introduced to Lean I had not come across any coherent approach to the most significant problems that faced the organizations that I cared about. Lean begins with the respect for the customer and for the people who do the work. It fosters collaboration ( the fundamental strategy for success in our species), and is fueled by the joy of continuous improvement and learning. Lean has incorporated all of the power of the scientific method and focuses on proof through objective measurement. Lean teaches that solutions follow an analysis that includes a search for misconceptions and biases. Perhaps the sixth challenge for managers for the future is to keep looking for something better than Lean. What they will find is Lean, because Lean is continuously improving. Lean is not a philosophy or management mindset written in stone. Lean is itself in a process of permanent continuous improvement as we all must be.
Note about the picture for this week’s posting: Each of the medical executives here in a photograph from more than a dozen years ago had a profound impact on my development as a physician leader. From left to right they are Joseph Dorsey, Paul Mendes and Ken Paulus.
