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Collaborative Uncertainty: Post 73

I just read a summary of Ram Charan’s new book, Leadership in the Era of Economic Uncertainty, a provocative strategy for dealing with recession and emerging stronger.  The author recommends that executives act quickly and decisively to prepare for the worst-case scenario, with the optimism that if they encounter a situation that is not as bad as forecasted, they will be in better shape to thrive when the recession ends.

Cash

Worst-case scenario planning requires that the cash breakeven point be lowered as rapidly as possible. The three sources of cash must be pursued vigorously:

• Earnings from operations
• Working capital (decreased inventory and expedited collection of receivables)
• Sale of assets

Mr. Charan wrote that refocusing strategy puts executives on the offensive, converting crisis into an opportunity to emerge from the recession stronger, smaller, more flexible, and more competitive.  Succeeding in this volatile environment requires deep immersion into operations, with hands-on involvement and follow-up, to obtain ground-level intelligence.  Financial targets need to move from quarterly to monthly and then weekly because volatility shortens the life span of the business model and makes strategy become obsolete more quickly.

 The role of the CEO is to provide reassurance as well as leadership despite the difficulties of economic forecasting.  Facing uncertainty and dashed hopes, many people go into denial.  Executives need to present a compelling rationale that problems can/ must be faced and solved and that their organization can emerge from troubled times in better shape than before.  A compelling vision for the future can be a source of creativity, energy, and hope.

People

Every business has a central set of invaluable assets that must be protected.  In healthcare, as in other industries, the accomplishments of top performers need to be celebrated because they give us hope for the future.  Listening to top people, regardless of their abrasiveness or irascibility, is important because it provides indispensable marketplace information. 

Mr. Charan states that now more than ever, alignment of goals and values can be a source of competitive advantage.  The art of leadership requires pointing out that our similarities outweigh our differences and leveraging  the energy of social discontent.  As a nurse mentor pointed out to me in Collaborative Fairness, “It’s the sand in the oyster that creates the pearl.”

In Collaborative Champions, I defined physician champions as outstanding clinicians who have earned the respect of their peers by caring for patients in a consistent and reliable fashion, delivering great clinical outcomes.  They are the people we turn to when we need medical care.  They are also seasoned professionals looking to leverage their knowledge and experience to improve care for their community.  Possible roles for physician champions in difficult economic times include:

• Presenting and discussing clinical data with fellow physicians
• Minimizing physician-hospital battles
• Creating a safe environment for learning
• Helping to build transparency and trust

Mr. Charan wrote that the intelligence that front-line people gather can be used to improve the value proposition, from making the registration process simpler and faster to redesigning services to suit patients’ and families’ needs better in changed conditions.  The most important point that he makes is:

Don’t let the temptation to save money persuade you that face-to-face contact is not important.

In a chapter entitled “Embracing Complexity,” in Better Communication For Better Care: Mastering Physician-Administrator Collaboration, I wrote that face-face conversations are the only sustainable way that people can deal with complex situations  in which predictability is diminished, experience does not guarantee success, and relationships are key.

In Collaborative Revolution, I mentioned that rather than telling people that their thinking is outmoded, Senge et. al. encourage us to reflect on our assumptions.  As we expand our understanding of issues (rather than blaming one another), we will see more clearly the underlying forces and the opportunities on which we can capitalize and create a virtuous cycle in which:

• An improved practice environment drives better clinical and financial outcomes
• Which make it possible to improve existing services, invest in new programs, and recruit and retain talented healthcare professionals
• Which drives an ever-improving environment in which to care for patients and their families

What do you think?

• Does the fact that healthcare is no longer recession-proof make you feel more vulnerable than in past recessions
• Do you know people who are facing or have faced job losses
• Are you working harder to do others’ jobs as well as your own
• How can we help one another succeed and avoid burnout in difficult economic times 

As always, I welcome your input to improve healthcare collaboration.

Kenneth H. Cohn

© 2009, all rights reserved

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