Turnaround thinking is usually called upon when an organization is in turmoil. Throughout my nearly 40-year career, I have assumed the role of CEO for a number of organizations that faced dire situations with neither the time nor money to address them.
To help these organizations survive and ultimately reverse direction, I relied on a few key turnaround principles that were critical to succeed. You may be thinking health care isn’t a turnaround situation, but having navigated care for my father over the last year, I would argue that in some ways it is.
The danger of inertia
Health care providers have the relentless pressures of rising costs and payment rates that are not increasing at the same pace. More effective negotiations alone cannot relieve this tension. Medical progress is producing new drugs, tests and technologies that are both costly and essential to providing state-of-the-art care. Further, the number of personnel needed to deliver these advances is only going up. Meanwhile, employers and taxpayers are reluctant to increase their spending on health care, competition is intensifying, consumerism is demanding a focus on value, and workforce inclusion is vital to clinical outcomes and the financial health and viability of the organization.
Add to these pressures uncertainty about the future of the Affordable Care Act. Will the number of patients without insurance increase? Will bad debt rise as co-payments increase? Will Medicaid payments decrease from their already low levels? In this context, executives find it difficult to develop long-term plans for their boards, but doing nothing is not a viable option. Even for organizations that are currently stable, inertia in the face of these challenges can have devastating consequences.
Key principles
The uncertainty that faces health care leaders today is not unlike the uncertainty I’ve experienced in true turnaround situations. Without disclosing the organizations or specific circumstances, I have assumed the CEO role in some pretty severe circumstances. There was at least one time when I didn’t know how we were going to meet payroll the next week.
Under such conditions, it is essential to focus on what’s going to right the ship as rapidly and effectively as possible. It’s from this perspective that I share four key turnaround lessons that could make a difference in leading your organization during this demanding period:
1. What one thing can I do today that will make things better tomorrow? Ask yourself this question. The risk in crisis situations is that the management team will become paralyzed by studying its challenges and get overwhelmed by the complexity and the risk of unintended consequences. When there isn’t enough time or money, you have to take actions that will buy you enough time and money to make it to tomorrow. And then you have to do the same thing the next day, and the day after that. And if you do it well enough for a sufficient number of consecutive days, your organization might succeed.
This may sound like a short-term perspective when CEOs are supposed to have the long view in mind, but the risk for the “captain” whose focus is on the horizon is that he or she might ignore the iceberg in front of the ship’s bow. So, in short, don’t freeze. Identify something doable that can make things better and do it.
2. Don’t waste time looking for unicorns. As a rule, unicorns — mythical, magical creatures that might come to your rescue and solve all your problems — don’t exist. As both a patient and as a caregiver for my family, I have experienced the challenges of navigating care in our system. It’s still complex, and delivery is fragmented. There are very real and addressable problems in front of us that we can tackle now, but there are no magic bullets. The care coordination crisis requires us to outline the issues, prioritize solutions and get to work. By making one improvement at a time, we can make health care better.
3. Learn from anyone. I’m not afraid to steal good ideas, and I don’t get stuck on the “not invented here” barrier. Ideas that are already working someplace else can be easier to implement and may be more likely to work quickly (because the kinks have already been ironed out by someone else) than the most brilliant original new idea from anyone already in your organization, including you.
4. History is an anchor. Cut it loose. Diving into a turnaround requires objectivity and freedom from the weight of history, personalities and sacred cows. In true turmoil, you must act with speed and get your team on board with the right decision for the problem at hand, because you’re fighting for your organization’s life. You have to communicate with full transparency and make sure your leadership and employees are working with you toward resolution. There just isn’t any time or space for naysayers who are attached to the past.
A turnaround mentality requires urgency, it necessitates clarity around making the best decisions for today, and there isn’t time to be hampered by legacy. You’ve got to expect that commitment from yourself and your team.
Turnarounds are challenging circumstances, but they are also opportunities for significant growth. Every turnaround I have been involved with has provided me with a lifetime of valuable lessons, and I have seen great brands and committed teams come back to life and regain leadership in trying times.
We have hard decisions to make, and we have to act with urgency and vision, but we share the opportunity to truly redesign the industry of the future.
Patrick T. Ryan is chief executive officer of Press Ganey. He lives in Beverly Farms, Mass.
The opinions expressed by the author do not necessarily reflect the policy of the American Hospital Association.
