A brainstorming session with the CEO of a digital health startup this week highlighted a frustration familiar to anyone who’s tried to make innovation happen in the slow-moving world of health systems.
Meeting with a system executive team to discuss a new approach to virtual care delivery, he described the cross-enterprise collaboration required, and said, “You could see everyone looking around the table to see what everyone else thought, before anyone was willing to react.”
No surprise, as complex bureaucracies don’t reward risk-taking by leaders; often, innovation is slowly suffocated by internal politics and turf-protecting behavior.
That’s why we often repeat advice from one of the most progressive, successful system CEOs we’ve worked with: “You’ve got to eliminate the vetoes if you want to get stuff done. I don’t let people leave the room until we’ve managed to set aside all the reflexive objections and arrive at a resolution.
I expect leaders to be solution-driven, not objection-driven.” For all the times we’ve been asked how to build a successful “innovation infrastructure,” it strikes us often the answer lies in leadership, not org charts.
In our work with health systems, physician groups, and other organizations over the years, we’ve often been asked to facilitate board-level discussions about governance—resolving board conflicts, navigating difficult decisions, evaluating board composition.
A recent discussion again highlighted one of our main observations in working with boards: governance problems are often strategy problems in disguise. Working with a system that has grown through acquisition over the years, and whose board includes members from several of the “legacy” hospitals which had merged into the system over time, we were asked to help facilitate a dialogue about investment priorities across the component parts of the system.
At the root of the issue: each of the “representatives” of the subsidiary entities were pushing to have their own investment needs take precedence. On the face of it, that’s a governance problem: boards shouldn’t be constituent assemblies, with each member representing the interests of a sub-unit. Rather, they should act with one purpose: to advance the interests of the whole.
But that misalignment turned out to be a symptom of a larger problem: there was no consensus at the board level about what the strategic direction of the combined system should be, and what role each component part played in that direction.
That’s a strategy problem, masquerading as a governance issue. Identifying the strategic issue allowed the board to reframe the dialogue around vision, which then unblocked the subsequent decisions about investments. Good strategy and good governance go hand in hand.
We recently got a call from a health system board chair seeking our perspective on the system’s ongoing search for a new CEO. At the top of his list: trying to understand how important it will be for the next CEO to be a physician. “We’ve never had a doctor in the role,” he mused. “But now we employ hundreds of doctors. And you’d have to imagine that having a physician as CEO would help with physician alignment.”
While choosing a physician CEO brings great signal value to the medical staff, we cautioned that it’s far from a panacea.
Of course, there are advantages in having walked in a frontline clinician’s shoes, being able to personally identify with their challenges and speak their language. But over the years, working with hundreds of health system CEOs, we’ve found that the most important characteristic of a CEO who will advance physician strategy is the desire to form strong personal relationships with doctors and draw on their counsel.
Does the CEO build a “kitchen cabinet” of physician leaders whom he can consult? Are physicians viewed as something to be managed, a problem to solve, or seen as true partners in strategy? Even more simply, does she like spending time with physicians, or groan every time a meeting with doctors pops up on the calendar? We’ve seen many non-physician CEOs excel at building strong, strategic ties with doctors, and some physician executives, who become jaded by never-ending physician alignment struggles, fail to advance partnerships with their colleagues.
One retiring physician CEO, reflecting on his replacement by a nonclinical executive, summed it up well: “I have a feeling he’ll do well with our doctors. He counts several physicians among his closest friends, which is a great sign.”
Norfolk, Va.-based Sentara Healthcare and Greensboro, N.C.-based Cone Health have abandoned plans to merge into an $11.5 billion system, the organizations said in a joint statement June 2.
The health systems said they mutually agreed to end the plans late last week. Leaders said they believe their respective organizations will be better served by remaining independent.
The two healthcare systems announced plans to combine last August. The deal would have formed an $11.5 billion system with 17 hospitals in Virginia and North Carolina.
“Sentara Healthcare and Cone Health are high performing, well respected, community-focused organizations. Those similarities served as the basis for efforts toward an affiliation. I am confident that this mutual decision will not alter either organization’s ongoing commitment to meet the needs of our respective communities,” Howard Kern, president and CEO of Sentara, said in a prepared statement. “I have no doubt that Cone Health will remain a top tier health system and will continue to pursue new and innovative ways to provide value for North Carolinians for years to come.”
“We appreciate the efforts of Sentara to work with Cone Health to determine whether an affiliation of our two high-performing organizations is in the best interest of those we serve. Recently, in the final analysis, we mutually decided that we can best serve our communities by remaining independent organizations,” Terry Akin, CEO of Cone Health, said in the news release.
We spend a lot of our time helping health system executives craft and communicate enterprise-level strategy: entering new markets or businesses, developing new services, responding to competitive threats, exploring partnership opportunities. Strategy is about the “what” and “when”—what moves are we going to make, and when is the right time to make them? Answering those questions requires an understanding of industry and market forces, organizational capabilities, and consumer needs. But there’s another important component that often goes missing in the rush to get to the “how” of strategy execution: the “why”.
Yet understanding why we’re pursuing one path and not another is critical for aligning stakeholders: physicians, operators, and (importantly) the board. Joan Didion famously wrote that “we tell ourselves stories in order to live”, and we’d agree; the “why” is about storytelling. What’s the strategic narrative, or story, that frames our intended actions? Making sure that everyone involved—including our patients and consumers—has a clear understanding of why we’re opening a new facility, or launching a new service, or entering into a new partnership, is a key to success.
It’s about sharing the vision of our desired role as a system, and the part we see ourselves playing in improving healthcare. We’re sometimes criticized for spending so much time on “framing” and drawing “pretty graphics”, but we’ve come to believe that the ability to succinctly and compellingly describe the “why” of strategy is as important as coming up with the vision in the first place. And then, of course, delivering on the “why”—a job made easier if all involved are clear on just what it is.