A "Healthy" Debate

I have been following the discussion and debate around our health care crisis and alternative solutions with particular interest. As a human resources practitioner and consultant I have probably been involved with health care in one fashion or another for thirty years.

The discussion of whether or not we should have a national plan is particularly interesting, as is the general debate on where the "fault" is for where we are at today.

I used the word crisis because I believe we really do have a crisis. Although I think we have some of the most sophisticated systems and processes in the world we have huge issues with our delivery system. It is also interesting to me how little the average person understands or aspires to understand the health care system.

I had a chance to listen to a HBR (Harvard Business Review) Idea Cast with Dr. Richard Bohmer the other day. It was probably one of the most succinct discussions of the issues with health care that I have heard in years. Dr. Bohmer points out that there are really are three major issues with our health care system in his mind: how we define a service, how we finance health care, and how we deliver health care. I found his discussion really valuable. He also gives a great explanation of the difference between managing health care which deals with defining and delivering services as opposed to "managed care" which he refers to as an insurance or financing model. I won't bore you with all the details, but I will tell you it is a value added 13 minutes to listen to his interview.

Health care is delivered and defined in his opinion currently as a series of separate events beginning with diagnosis and then proceeding through treatment and "follow up". He argues that health care delivery and costing should be based on outcomes rather than the way we currently track and price it. It is kind of like lean manufacturing or total quality; success is determined by outcome not process.

What I found interesting is most of the debate I hear is about providing access to care and financing, I hear very little about outcomes.

The other thing I find I hear very little about is the individuals responsibility in their health care. I don't mean just paying for it, I mean accountability for lifestyle choices and related activities that directly and indirectly affect health care costs.

Most of us have historically had our health care provided through our employer, our spouses employer, or in some cases the government. We pay a fraction of the real cost and understand the way it works like we understand Cantonese. The insurance industry doesn't make it much easier. For years health care was considered like paid time off a "fringe benefit". Then we noticed that the cost of that particular fringe benefit continued to go up at double digit rates long after wage inflation receded. By that time we had created an entitlement.

When this becomes particularly interesting is when we start to track connections. Jeffrey Pfeffer of Stanford believes (and I agree) that much of our health care related costs connect directly or indirectly to our work environment. If you are stressed about your job it effects your health. If you are stressed about your home life it effects your work. Some studies say it costs us $200 billion annually! In a shaky economy when you are concerned about losing your job and your health care benefits the problem accelerates.

I also believe at least at this stage there is little about personal accountability in health care delivery. We are suing Big Tobacco successfully for misleading advertising and withholding information about the addictive and health risks of smoking, but we are reluctant to reduce or deny care to smokers.

We want to label the calorie content in food, but do we want to deny or reduce coverage to those who have bad eating or exercise habits? Are we ready for employers to require wellness programs and screening as a function of company provided health care insurance?

Do companies educate their employees about things they can do to affect their health and the companies costs? Not many in my experience. Should we allow "tiered" coverage for people who deliberately practice behaviors that could or actually affect their health?

I don't mean to imply that as Dr. Bohmer points out "fixing" health care is a complicated issue, but should we be addressing personal accountability along with delivery, definition, and financing?r

To me this speaks of respect, engagement, and personal competency. What do you think?

A Matter of Balance

The power of language intrigues me. I participate in a group of people much smarter than I am in trying to re-shape how we define words and their context and the effect that has on perception and understanding. I find it plays an enormous role in many applications, but the place that intrigues me the most is in the arena of leadership.

As many of you know I am an enormous proponent of engagement as a cultural norm. I feel that organizations where the inter linked relationships are based on shared values, respect, and a common vision and goals will always be more successful than a transaction based relationship. I also differentiate true engagement; which involves employees, customers, and shareholders, from engagement models that focus exclusively on "loyal" customers.

The Sotomayor nomination has created an interesting debate regarding the appropriateness of empathy in the judiciary. Should a jurist consider context and circumstances in rendering a decision or merely the "facts"?

I used that as the basis for a question I posed on LinkedIn as to the appropriateness of empathy not only in the judicial system , but to the essence of leadership. Is empathy an essential or at least important characteristic in effective leadership? The vast majority of the responders agreed that it is, but there was some dissent arguing that empathy can cause decisions to be made on the basis of emotion or disparate consideration for the interests of one "stakeholder" group over another.

I think we are finding much about our "objective" models that are based exclusively upon numbers and singular shareholder groups is flawed. I mentioned in a previous blog that Bill George of Harvard stated that a possible positive outcome of the current crisis is a new "balanced" model. Even more recently Richard Rumelt of UCLA mentioned in an interview with McKinsey that much of our current circumstance was based on reliance exclusively or primarily on short term "numbers" and indices that don't tell the whole story.

Another interesting debate is whether or not organizations should focus their efforts on shareholder satisfaction or stakeholder satisfaction. As you might suspect my perception is that organization who focus exclusively on shareholder value rarely maintain sustained success. I would submit that much of our current financial crisis is predicated on focusing on the value to the shareholder as represented by stock price to the exclusion of other stakeholder values. I have seen debates on LinkedIn and other venues insisting that shareholder value is the primary or exclusive measure of organizational success, but if you ignore or minimize the interests of the other stakeholder groups how do you stay in business?

In the past week I had a great conversation with a colleague who is trying to "re-invent" the practice of human resources management. Like me she is concerned that HR has become overly concerned with policy and procedure and systems rather than "people". We want to ignore or minimize the human element. Organizations are staffed by people.

I have another colleague who works in the area of trust. She has become frustrated occasionally with potential clients who don't particularly value strategies and systems to build and sustain trust with their customers, suppliers, or employees. They are not sure they can track a direct correlation to the bottom line. Hmm, sounds like a shareholder versus stakeholder issue.

Yet another colleague has designed a management system she calls KindExcellence(TM). Her belief (and I share it) is that kindness and excellence are not a polarity, but rather an axis. You need both to operate as an effective leader.

In my model responsibility and respect form a similar axis. If you allow someone to perform in a manner that doesn't live up to your expectations or their capabilities is that truly a respected based relationship?

I guess at the end of the day I agree with Margaret Wheatley that the most powerful force in organizational systems is relationships. These other elements are important as long as they are kept in "balance".

I think I will continue to endeavor to manage "whole people" and to include empathy in my decision making model. I particularly like the way a Buddhist philosopher put it in a quote a colleague shared with me.

"A person who cannot genuinely empathize with others can never excel as a leader. So much of what ails society today is the result of too many people in leadership positions who do not or cannot identify with the plight of their fellow men and women. It is in enduring pain and struggles that the earth of our humanity is cultivated. And it is from this earth that a capacity to be genuinely concerned for the welfare of others blossoms." - Daisaku Ikeda.

I think that sounds like balance......

Is There A Rainbow Behind This Cloud?

As some of you may have noticed I posted a question on LinkedIn about our focus on leadership as opposed to management last week. More specifically I asked whether or not we were focused on leadership to the exclusion or minimization of management. Needless to say I got pretty good response to my inquiry.

A few people "educated" me as to the difference between leadership and management. Although I feel I recognize the differences between the two I appreciate the insight and feedback that people provided to me. Others challenged my assertion that we needed to focus on management as opposed to leadership and discussed the "leadership" void we find ourselves in in some many elements of our society, but especially it would appear in government and industry.

In candor I wasn't taking a position that we need management rather than leadership. My point is that both sets of skills are essential in a high functioning organization.

Marcus Buckingham has said that the most critical role of leadership is to create and reinforce organizational clarity. I agree with him. He states that clarity is the most important attribute of leadership; not charisma, technical ability, presence, or any of those other ethereal qualities we ascribe to and pine for in our leaders.

Richard Rumelt of UCLA says that the most important role of management is to remove ambiguity for employees. To create a direct personal connection of the tasks and activities we expect them to perform in support of the organizational mission. The CEO does that at a very high level for the whole organization, managers do that for their employees.

As a practicing human resources professional and consultant for almost 30 years I can tell you that both the "vision" and the removal of ambiguity are critical. People need clear expectations, constructive feedback, and ongoing coaching on a personal level. Charismatic leadership will not replace that.

There is some potential good news. Harvard Business School professor Bill George says that our current economic crisis may be both the wake up call and the catalyst for creating a new generation of leaders. He states, "... this new group will build organizations that produces long lasting value for employees and customers, not short sighted strategies focused on 'shareholder' value. Rewards will be for performance, not transactions."

Maybe I am reading into it too much , but that sounds a lot like engagement to me. If you look at where we are in the financial crisis I would submit that much of it derives from that focus on transactions not performance.

A colleague of mine who is focusing her energies in the criticality of trust in creating high performance cultures has been somewhat a victim of the "transactional" mindset. Her potential clients want to see statistical "evidence" of the link between trust and performance. They want a transaction process, not a relationship. I defy anyone to show me an organization with long term sustained high performance that has not created true engagement and didn't build that on a foundation of trust!

I recognize that there are organizations that have enjoyed a level of "transactional" success through the utilization of down sizing, outsourcing, and other "cost" based tactics; but now that we have run out of emerging economies to exploit and operate in a global economy how is that working for them?

I see questions on LinkedIn and other sites seeking the "technological" solution to creating engagement; guess what, there isn't one!

As my colleagues in LinkedIn pointed out to me we desperately need a new "leadership" model that has elements of both those ethereal qualities and heroes that we seek, but also the competencies of effective management. We also need a new value proposition based on relationship, not transactions. We need that between employee and employer, supplier and customer, and citizen and community. Transactions; creating short term value at the expense of others, is what got us here. The old solutions aren't relevant and simply won't work. So what do I suggest:

• Respect
• Personal responsibility
• Shared information
• Equitable rewards
• Mutual loyalty

Hmmm, sounds a lot like relationships based on trust on mutual benefit doesn't it. Who knows, maybe it will catch on.