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Transform Care October 14, 2015

Everything Changes: Leading Sustainable Change in Disruptive Times

Key Takeaway
Leadership is perhaps the scarcest commodity - Adrian Slywotzky

As the healthcare industry undergoes a major transformation, the biggest obstacles aren’t technological. Nor are consumers the issue. In fact, quite the opposite, as people have increasingly embraced value-based healthcare and the trend toward consumer empowerment. Instead, the biggest roadblock might be in the corner office, as Alden Hayashi reports: 

“Leadership is perhaps the scarcest commodity,” notes Adrian Slywotzky, partner emeritus, Oliver Wyman. Slywotzky recently led a roundtable discussion at the Health Innovation Summit 2015 in Chicago, where he and a panel discussed the topic of transformational leadership. The group consisted of four top executives whose companies have undergone major overhauls: Mark Ganz, president and CEO, Cambia Health Solutions; Pat Geraghty, chairman and CEO, GuideWell; Sam Srivastava, CEO, Magellan Healthcare; and Grace Terrell, president and CEO, Cornerstone Health Care.

All of the executives strongly agreed that any major transformation has to start at the top. For Ganz, this meant a sweeping overhaul to his board of directors to bring in more diverse individuals with greater consumer experience. Ganz also changed the way the board operated. In the past, meetings were basically PowerPoint presentations with relatively little discussion. Now, they’re like “full-contact sport,” with people more vigorously debating the pros and cons of any proposal. Geraghty, too, has made significant changes in the way his board operates, and he has used those changes to set an example for the rest of the organization. He says it’s much easier to ask employees to change the way they work when you, yourself, have done the same.

Without a doubt, getting employees to change their job behavior and the way they work can be extremely difficult. To overcome any resistance, Ganz says he tries to lead with an emotional appeal. According to him, leaders should speak to people’s hearts first, and then their minds. In other words, the transformation should be presented in terms that are emotionally meaningful to employees, perhaps by noting how the initiative will be something they will later be proud of.  For Terrell, the Cornerstone CEO, that means encouraging people to look at the big picture. “This is the best time to be in healthcare because we have the opportunity to save the country,” she asserts. Terrell explains that if her employees can do their part in overhauling the healthcare industry, then that will free the U.S. to focus its attention and resources on other pressing problems of national concern.

Another best practice is to foster an open culture where people are free to speak their minds and question the reasons for the transformation. In the past, GuideWell’s town meetings with employees would basically be a long PowerPoint presentation followed by a short Q&A session. Now, executives will discuss an important issue for 10 to 15 minutes without the aid of PowerPoint, and then they’ll open up the session for a lengthy Q&A, in which employees are encouraged to ask tough questions. Interestingly, Geraghty says that he had to train his middle management that it’s okay for anyone to ask candid questions. That type of open culture will also enable a company to better handle the many setbacks that are inevitable in any large-scale organizational transformation. According to Srivastava, the Magellan CEO, people might succeed only three out of five times, but the main thing is to be able to talk about—and  learn from—the  two times they failed. “You need clarity that it’s okay to fail,” he says. Otherwise, people may quickly retreat back to their safety zones, and the organizational transformation could easily stall. The trick, adds Cambia’s Ganz, is to have employees “fail forward” instead of backward to keep the momentum moving toward the finish line.

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