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Rapid Health Care Industry Change and the Individual Executive David Mead-Fox, Ph.D. The health care industry continues to undergo a largescale, relatively rapid, and difficult transformation. This process, traceable essentially to escalating costs and the resultant development of managed care, has created: new sources of business opportunity and success; widespread confusion, for patients and providers, access and coverage problems, and a sense of constant upheaval in the industry.
Physicians have had to give up personal autonomy as well as focus more on medicine as a business. Hospitals competing for many years have suddenly merged. Providers (physicians and hospitals) have become payers and payers have become providers of care. Employers and patients have moved aggressively toward cost as a determining factor in where and from whom, care is sought.
Few would describe the changes in the health care industry over the past 10 years as "fine-tuning". Change is typically difficult but when pent-up market forces in the industry were unleashed by payer discontent along with a privatizing swing nationwide, the health care industry became an unpredictable and scary roller coaster instead of a large, steady train gliding down the tracks.
What does this mean for the individual health care executive? At a minimum, it has often meant rapid loss of job security and the collapse of many traditional career pathways. Often it is the most experienced who feel the most lost and at sea - 30 years of running a hospital may make for a superb hospital CEO but a confused and uncertain integrated delivery system leader.
The relatively clear distinctions, boundaries, and roles of the past have given way to new relationships and a new kind of uncertainty about strategic issues and the future in general. Some executives have adapted magnificently, some have opted for early retirement, and some have attempted to "coast" and ignore or fight the changes happening around them. Other executives have been willing participants in change, but they often lack applicable experience and the requisite leadership and management skills that are in demand in the industry.
Despite these differences, a common theme heard throughout the industry and throughout the ranks of health care executives is the notion that much bigger and more powerful forces are at work than in the past - individual managers make decisions because they are forced to, rather than as proactive, empowered leaders. As a result, many executives feel out of control and at the mercy of these larger powers.
This reaction, while understandable, in fact misses what some have realized: The current period actually holds more opportunity for individual health care executives than at any time this century. Moreover, this opportunity is based on the fact that the role and value of the individual has actually increased despite the sense that the market and large scale interests of one sort or another have taken over.
It is precisely times of great upheaval that require individual leaders and managers to step forward. Not only are there many more opportunities for new businesses and new ways of doing business than ever before, but even organizations with little noticeable change require a much enhanced role for the individual.
There is no more auto-pilot in health care - in the past many roles and positions could simply have someone new plugged in. The positions themselves changed little, and the organization kept chugging along. But nowadays, the health care industry, more than ever, needs the committed work and motivated leadership of individual executives.
In addition, while there has been significant consolidation, there are more newly created professional and executive positions and titles in health care than ever. And, positions that seem ordinary or traditional enough have often taken on new and sometimes unexpected meaning. In both cases, the importance of the individual increases rather than decreases. This results in significant challenges for organizations seeking to fill positions - experience is often desired with business entities or structures that did not even exist only a few years ago. Or what was once an asset on someone's resume - working at a large multi-line insurance company for example - can turn into a liability in some cases.
Due to the transformation of the basic structure of the industry, from the point of view of a health care organization seeking to both survive and prosper, there can seem to be a frightening shortage of appropriate executive talent. And, for executives, viable professional options can seem few and far between.
However, while vexing for all concerned, the current situation provides an opportunity for organizations to secure a valuable competitive advantage through the location of top-drawer and innovative management. And, there is opportunity for unprecedented professional growth and job opportunity for health care professionals who can make the leap from whatever their past has been to the present and future of what is a continually evolving industry. How can this leap be made? What can health care organizations do to find the right talent and how can health care executives position themselves to both survive and prosper in this confusing and turbulent time?
Thinking and looking outside the box is not only more important than it has ever been, it is a necessary component of success. This is because the industry has changed from a world of black and white and clarity to shades of gray and considerable uncertainty. Newness and uncertainty have, in many cases, become the dominant definition of organizational futures and executive career paths.
Thinking outside the box is the only way to truly prosper when organizational and career "boxes" have become dysfunctional or outmoded. This means that health care organizations should be looking at sectors of the industry that they may have stayed away from in the past. For example, hospitals can seek management talent in the consulting industry and local non-profit facilities can look to large, publicly-traded corporations for CEOs. Small entrepreneurial start-ups may find a well-spring of energy and capability inside large bureaucratic organizations. HMOs may not be wise to shun those with "only" a hospital background. And, even more dramatically, health care organizations should look outside the industry itself - to the financial services industry for CFOs, to the consumer-based industries for COOs and to the manufacturing sector for Executive Vice Presidents. For individuals, the lesson is the same - old assumptions regarding industry sector "walls" must be questioned and then surmounted and positions that appear to be beyond one's experience must be pursued.
This is not an easy thing to do for an individual or an organization. An organization that is already concerned about its future direction will not find it easy to go off the beaten path to find executive leadership. And, an individual who has spent most or all of their career managing local physician practices will find it difficult to propose to work for a multi-state, publicly traded managed care company.
However, gain for both an organization and an individual executive virtually always requires the courage to take risks: company competitive advantage and individual career success both spring from innovation and differentiation that can only happen if risk is seen as a necessary and exciting springboard, not something to be avoided.
The beaten path metaphor is an apt one - the road of traditional candidates and employer targets is increasingly barren and all too well trod in the health care industry.
Both sides of the equation - organizations and individuals - must look at the notion of applicable skill and capability in new and creative ways. Organizations need to focus less on specific job history and more on core capabilities such as interpersonal skills, communicative competence, analytic abilities, high energy, and creative thinking.
The four commonly cited categories of job success - education/experience, intellectual, interpersonal, and motivation are very much to this point. Education/experience is only one of four categories - more than ever, health care organizations must focus on the other three as critical forms of power and ingredients of success - brainpower, interpersonal power, and intrapersonal power.
Individuals need to think much more broadly and confidently, capitalizing on their core capabilities to seek new and different opportunities. This starts with conducting an optimistic, yet authentic personal inventory to identify these core traits. Then, these personal defining features need to be linked to a new area, industry sector, or particular position opportunity. The courage to risk a new way is the key for health care organizations and executives to effectively find each other and form a mutually beneficial relationship - the future belongs to those who can remove the blinders of outdated organizational roles and career development.
The author is a Partner and Vice President with Korn/Ferry International
and can be reached as follows:
David Mead-Fox, Ph.D.
Korn/Ferry International One International Place, 11th floor Boston,
MA 02110
Tel: 617-345-0200
E-Mail: meadfoxd@kornferry.com
Laurence J. Stybel and Maryanne Peabody are co-founders of Stybel Peabody Lincolnshire, an international consulting firm focusing on career effectiveness for executives who report to Boards of Directors. Contact Larry Stybel at stybel@aol.com <\Font>