201011 Physicians Insurer: The Three Secrets to Leading Through Crisis
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Dr. John Bruhn's article examines the essential leadership qualities needed to navigate crises in the healthcare industry, emphasizing the distinction between leading change and managing it. Effective leadership during challenging times requires a focused direction, transparency, and nimbleness to adapt quickly to rapid changes and maintain organizational stability. The article advocates for collaborative communication and decisive action to avoid the pitfalls of inaction and to thrive amidst uncertainty.
201011 Physicians Insurer: The Three Secrets to Leading Through Crisis
- 1. PIAA 4Q 10 B des _Layout 1 11/1/10 3:00 PM Page 29 DEPARTMENT Consult Leaders who drive change Dr. John Bruhn’s 2004 article in The Health Care Manager, “Leaders Who Create Change and Those Who Manage It: BY STEVE CALLAHAN How Leaders Limit Success,” highlights the characteristics of leadership necessary to respond with the changes The Three Secrets to demanded by challenging times. From his perspective, the Leading through Crisis differentiation comes in the form of a philosophical contra- diction between leading and T here is no doubt that dissatisfaction, driven by rising small mistake can (metaphori- managing change. According these are trying debt, an inability to pay bills, cally) cut to the bone. to Dr. Bruhn: times for insurance- the temptation to defraud, and Yet, if you take a step back, industry leaders in the increasing publicity on cos- you see that, in reality, it is the Leading change is not simply a general, and the healthcare metic surgery missteps, all counterintuitive that is needed matter of a leader’s style or per- industry in particular. The leading to fluctuations in the at this point. Leading in times sonality; it is a leader’s philoso- oft-quoted adage, “With crisis numbers of suits and claims. of crisis actually requires a pro- phy of how to generate and comes opportunity,” has Today, every decision’s clivity to decisiveness and mobilize the total resources of an become a cliché in the current impact is amplified by the action—not overly conserva- organization to enable it to be environment. potential ramifications of unex- tive analysis—and this in turn its best. Managing change, on In reality, there is no time pected outcomes. One mistake, requires a compressed reaction the other hand, is focused on when strong leadership is more even of cautionary omission, time. From new healthcare maintaining the stability in an crucial than periods of crisis. can lead to dire financial conse- mandates, privacy laws, organization and containing the When things are going reason- quences. As a result, there is a changes in reporting require- effects of unwanted and unex- ably well, sins of omission and strong tendency to shore up, or ments, new categories of treat- pected change. commission are often over- slow up, decision-making with ments and drugs, to our looked, as insurers and physi- thorough (over)analysis in an increasingly litigious society, it There can be no doubt that cians alike navigate the normal attempt to avoid a misstep. is evident that the pace of we face change of immeasurable bumps in the road relatively Greater emphasis on the finan- change is accelerating. For the diversity and impact in our successfully. There tends to be cial demands of our business cautiously plodding company, industry. While some may opt to less scrutiny of practices, and a has executives and practice missed opportunity actually try and maintain stability, there lower probability of litigation in leaders spending more time has a greater potentially nega- is in fact a need for action-ori- prosperous times, reducing the justifying expenditures, looking tive impact, amid the stress of ented change leaders, who are degree of volatility in litigation for ways to cut corners without turbulence, than a step in the looking to survive and thrive. and settlements. Unfortunately, compromising quality. To some, wrong direction. The negli- There is no stability to maintain, under the stress of economic the management of the various gence of a failure to act can at least not in near term. crisis comes the magnifying expense items begins to feel like have severe ramifications, in glass of an increase in patient juggling knives, where one direct conflict with the pricing Three strategies and claims practices required There is elegance in simplicity. Steven Callahan is a senior consultant for The Robert E. Nolan to comply with mandates that With that in mind, here are the Company, a management consulting firm specializing in the increase exposure while adding three strategies that enable insurance, healthcare, and banking industries; steve_callahan@ restrictions to an already highly change leadership (as distinct renolan.com. regulated industry. from change management) 50 P H YS I C I A N I N S U R E R FOURTH QUARTER 2010
- 2. PIAA 4Q 10 B des _Layout 1 11/1/10 3:00 PM Page 30 necessary to successfully review expands to include legal nearly uncontrollably long gaps “ navigate through the current review, contract revisions, net- Leading in between decisions and their turbulence. work negotiations, closed claim implementation. Yet the rate of analysis, and cost-effective risk- times of crisis change accelerates every day, 1. A focused direction. The sharing. Without focus, the via the rapid rate of regulatory actually direction pursued must be diversity of actions of people incentives and reforms, CMS focused and clear, addressing who are doing what they requires a changes, new treatments and the key strategic challenges. believe is best is suboptimal— pharmaceutical discoveries, or Further, to be truly effective, and often counterproductive. proclivity to the complexity of ethical chal- this new direction should be For any given point in time, a decisiveness lenges, from stem cell research ” collaboratively designed and universally shared sense of to euthanasia. The train is not fully communicated to all purpose and intent is crucial. and action. waiting, and has already left the employees. Organizational Focus drives success, according station, compelling a com- focus is akin to the much-over- to famed management guru pressed decision-implementa- used concept of “mission,” but Peter Drucker, who said, “The avoid the artificial distance that tion-adaptation cycle. George defined in terms of a more tan- difference between a successful is created by this approach, Nadaff, founder of Boston gible and quantifiable ability to person and a really successful erring in favor of maintaining a Market, said it best: “Stay cool, connect potential with reality. It person is that the really suc- consistent message. The benefit run your business, and stay filters out all the noise and cessful person says ‘no’ to just of transparency comes in the focused on your daily tasks. immediacy of the firefighting about everything.” utility of shared information. Last but not least, damn the that goes on every day, drilling An excellent industry example torpedoes and full steam down to the core efforts neces- 2. Transparency is critical, of transparency comes in the ahead.” sary to move the business especially in times of uncer- form of PIAA’s Data Sharing toward growth and profitability. tainty and change. The Project, a repository of relevant A clear focus, transparent A clearly defined sense of response to a period of turmoil industry facts compiled over 25 communication, and nimble direction motivates cohesive should not be closed-door years, covering the manage- actions lie at the core of effec- action, mitigates the fears that strategy sessions, wherein sen- ment of risk, claims, underwrit- tive leadership in today’s world may be inhibiting action, and ior managers gather to deter- ing, marketing, and lobbying. of continuous change. We face creates a leveraging effect, as mine the fate of the company. Companies need to mirror that an unforgiving and harsh econ- resources work together instead Fears imagined are typically transparency within their own omy, one that will reward those of focusing on individual self- much worse than reality. walls, to reap the full benefit of able to adapt nimbly and stay preservation. Consider a focus Change leaders coordinate the their intellectual capital and focused, and that will penalize on ensuring optimal healthcare constant flow of information, experience. As Kevin Roberts of those trapped by conservatism in the medical management performance measures, and Saatchi & Saatchi once said, and bureaucracy. In the power- arena, with a clear definition expectations, in order to sus- “We are in the age of the idea. ful yet succinct words of our that avoids an all-or-none tain cultural integrity, capacity The organization that can 26th President, Theodore scorched-earth approach. Done for coping, and the cohesive develop a culture of creativity Roosevelt, “In any moment of collaboratively, utilization sense of purpose. Yet the ten- and idea generation will be decision the best thing you can dency is more often to assume the winner.” do is the right thing, the next that everyone on the staff best thing is the wrong thing, “ knows what they need to do, 3. Nimbleness translates and the worst thing you can do One mistake, letting them do what they think leading into measurable, is nothing." even of is best, while management timely action. Even a good Avoid the trap of analysis- ponders the big issues, strate- plan, understood by all, with paralysis. Incorporate focus, cautionary gizing on how to keep the com- clear measures of success and transparency, and nimbleness pany afloat. More often than well communicated, serves no into the decision-making omission, can value if it takes so long to not, this response tends to be process today, and you will be lead to dire more like a survivalist reaction, implement that the situation poised to lead a company that as employees fulfill their has changed by the time it not only survives, but thrives, financial instinctive impulse to duck into takes effect. Despite the logic of tomorrow. ” consequences. a foxhole until the barrage of this statement, the stress of For related information, see change and uncertainty has economic difficulties gives rise www.renolan.com. ended. Change leaders must to distractions that result in FOURTH QUARTER 2010 P H YS I C I A N I N S U R E R 51