Barriers to Value Based Care Transformation -- Cultural Dysfunction
I spend most of my days as the principal of my healthcare executive search firm on the phone with seasoned industry leaders. Most of these individuals have ascended to the most senior leadership ranks of household-name payer, provider, and healthcare technology organizations. Disturbingly, too often what I hear are tales of completely dysfunctional corporate cultures where those most focused on driving required industry transformation and desired business deliverables are marginalized. That is, the theme of these conversations goes something like: “‘Organization A’ hired me to lead ‘Transformation/Integration B’ but, within weeks of my arrival, it became apparent that the organization really had no appetite for what that initiative required.”
As a result, many of these discussions evolve into brainstorming sessions where the said executive and I pepper each other with questions, trying to determine if there’s any possible path for success in the role and with the hiring organization. Most calls end with some variation of, “I’m going to give it my best shot - but, please keep an eye out for me if you hear of something that might be a better fit”.
Now, don’t get me wrong, these are not easily discouraged individuals – they didn’t achieve their level of success by giving up when challenges present themselves. They are not na?ve around what barriers commonly exist to organizational change & industry transformation. But, too often, we arrive at the conclusion that the culture of the organization is simply too problematic for them, or anyone else, to permit their ultimate success. Why is this such a common dynamic in our industry and is there anything that we can do about it?
Now, while I, for obvious reasons, can’t and won’t “name names”, the aforementioned discussions include those with senior leaders at Fortune 500 payers with soaring market valuations, market-dominant Blues plans, healthcare tech industry darlings, and regionally preeminent health systems/medical groups. Externally, these are widely respected and, in many cases, financially successful organizations (at least for now).
To be clear, many of these individuals have been hired to drive organizational transformation & integration around Value-Based Care, Accountable Care, Digital Health, and/or Population Health initiatives.
Highlighting the above symptoms of widespread industry dysfunction is the easy part. I will now attempt to divine the root causes. That is, what common organizational barriers to transformation weave through the feedback I receive from these industry executives?
Untouchables – these tend to be either suboptimally performing individuals or processes that, for a variety of reasons, an organization is unwilling to confront. This could be the insecure executive that has “failed upward” to the highest levels of leadership due to political savvy but, lacks core competencies and leadership capabilities -- or an executive that has deservedly achieved a high level of success but, is now complacent and comfortable with the status quo. This could also be an entire functional area/power center that will stand in the way of transformation as it represents a threat to its very existence. Either way, Untouchables exist in most organizations and are driven by self-preservation – NOT the best long term organizational interests. As such, they will, to varying degrees, create roadblocks, withhold information, and do everything within their power to stymie transformation.
They typically have some misguided support within the C-Suite that perpetuates their survival. As many of you know, the Untouchables’ thrive among not-for-profit payers & providers who value “consensus” over execution and results (“don’t rock the boat”, “never be the loudest voice in the room”).
The Detached CEO – There are some, not the majority, but some, CEOs in our industry who have grandiose senses of themselves and their organization’s place in the world. They are often well-intentioned and believe that it is them, and their vision alone, that will transform the industry. Unfortunately, in most cases, these individuals are detached from the operational realities of the businesses they lead. They might consider themselves as creating the next Apple or Google but, they’re blind to the realities of the cultural baggage of their organization and don’t really seem interested in understanding them. They espouse lofty goals, say all the right things externally about industry innovation & transformation but, little ever actually happens further downstream due to the disconnect.
The “In-The-Weeds” CEO – On the opposite end of the spectrum, some CEOs simply spend way too much time in the granular, day-to-day operations and not enough time providing high-level support and strategic guidance. This often results in a dynamic where the rest of the leadership team begins to feel undermined and untrusted by the CEO. As a result, morale suffers and the organizational culture becomes one of avoiding mistakes while trying to stay one step ahead of the CEO’s whims. This is hardly a recipe for innovation and organizational change.
Broken Corporate Governance – I’ve heard stories of some not-for-profit Boards consisting of octogenarians who struggle to stay awake at Board meetings. In other cases, CEOs manage to dominate the Board relationship/access to the point where, even a more sophisticated Board, is left uninformed of what’s really happening below the surface; rather they’re only aware of what the CEO wants them to see. In these and other broken governance environments, the Board is unable to perform its advisory role effectively.
Institutional Resistance – Change is always difficult. Organizational cultures that have been developed, consciously and unconsciously, over many years, and in some cases, decades, will not change on a dime. As you know, books have been written on this subject. Without Board & C-Suite alignment and support, transformation attempts are doomed to fail. The weight of the resistance will be too great to overcome.
Having written all this (and if you’re still reading, thank you), one wonders if cultural dysfunction is unique to our industry or common across corporate America. My goal, regardless, is to shine a light on this issue with the hope that it allows more healthcare leaders to identify the warning signs before accepting a “Transformational” leadership position. Further, perhaps by exposing the widespread prevalence of these barriers, our industry can begin to break them down. While I truly treasure my daily “counseling sessions” with my friends and associates across our industry, it’d be wonderful if more of the discussions were around successful – and not doomed - transformation efforts.
As always, I welcome your feedback and input. Am I making a mountain out of a mole hill? Did I miss some other major sources of corporate dysfunction? Have I overstated the case? Thank you for reading and please stay safe.
? Steve McGovern and Executive Search Insights, 2021. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Steve McGovern and Executive Search Insights with appropriate and specific direction to the original content.
?Disclaimer: The views and opinions expressed in these articles are solely those of the author.