The "First" Engagement Initiative

Those of you who know me know that engagement, true engagement is an area or opportunity that I feel pretty strongly about (sorry Laurie). I think the emphasis is on true engagement. Engagement in my mind is defined as voluntary or discretionary effort that employees bring to their job everyday. True engagement is when that phenomenon spreads to your suppliers, your customers, and your community.

True engagement is accomplished using a number of tactics and strategies, but it is not a "program", it is a culture that lives everywhere not in HR. You don't accomplish it with pep rallies and reward and recognition programs by themselves. You build the culture and then you live it.

Another area that has intrigued me for a while and is taking on new dimensions in light of the health care debate is the relationship between personal competency and engagement. Personal competency is the stepchild key principle that was embedded into the original constitution, kind of a neglected cousin to personal property. Personal competency was the idea that each of us had the right and responsibility to manage our own futures, that we were not bound by our heritage or lineage. The key is the balance between right and responsibility. In a way doesn't that sound more like a partnership than a hierarchy? Doesn't that kind of sound like engagement in a way?

I have talked about personal competency at length and how to great extent with the coming of the Industrial Revolution a variety of forces combined so that we exchanged our personal competency for a kind of "corporate feudalism", we gave up our "equality" for security like corporate or organizational pension plans, health care benefits, etc. The industrialists were all about this model. Dumbing down skill sets and creating structures based on "compliance" is easier, in the short term. Our Founding Fathers were not real big on the concept of corporations, but that is another story.

When I look at our current situation as it relates to health care I see similar potential issues related to personal competency. I want to go on record as saying that I believe access to basic health care is a right that everyone should have access to, and I do mean everyone. The fact that we have one of the most advanced and expensive health care systems in the world and our morbidity and mortality rates put as at like number 30 is embarrassing to me (think countries like Cuba and Costa Rica). I also believe that access to basic care is good business and good for the overall economy. We are spending upwards of 10% of our GNP on health care on our "stellar" results and the number is getting bigger, not smaller. A big part of that is that people without access to preventative care get their care in ERs, the least efficient and most expensive way to provide it. Since they can't pay for it the costs get passed along to those who can pay, kind of like shrinkage in retail.

Here is another data point for you to consider. According to the American Medical Association sixty percent of health issues (and therefore costs) are related to lifestyle rather than hereditary. In plain terms that means we cause it! The issue is also that if I have not;

• Participated meaningfully in paying for the costs of care for me and my dependents
• Been provided with any meaningful information about what I or my dependents can do to improve my health or reduce expenses
• Been incentivized to change my behavior
• Been educated on the impact of escalating health care expenditures on other parts of the business

then the chances I am "invested" in making changes to my behavior are pretty minimal. No personal competence or engagement here folks!

As a former HR executive I can also tell you that most organizations strategy to deal with the rising costs of benefits is to;

1. Cost shift to employees through higher deductibles, co pays, etc
2. Reduce benefit offerings
3. Eliminate categories of employees from coverage

Is it just me or do these methods seem to miss the root causes as well?

I am not going to belabor that point and make this about health care.

I guess my point is that maybe just maybe the Founding Fathers intended personal competency to be the first real engagement initiative. My personal engagement model is based on five elements:

• Respect
• Responsibility
• Information
• Equitable rewards
• Mutual loyalty

Is it just me, or do there seem to be some parallels between that and personal competency? Maybe personal competency and true engagement are both about doing things with rather than to people ?

Were the Founding Fathers really that visionary, I wonder......?

"Lost" Opportunity

It is interesting to have the historic vote on health care in the background as I muse about this. Many opponents of the model being proposed by the Administration talk about the trillion dollars it will cost to fund the program. As a counterpoint I look at the following situation:

My readings and research tell me that we "lose" $5 trillion annually to the direct costs of employee turnover. Additional research indicates that we lose another $200 billion annually to "presenteeism"; the spending on health benefits related to stress, lost productivity due to employees dealing with personal issues at work, and the difference between contributions from employees operating at full versus marginal productivity. I saw research recently that said in addition to those costs we send over $100 billion annually on training and development in corporate America and yet less than 10% of those dollars result in meaningful and sustained change.

My math has never been my strength, but it would seem that the "lost" opportunity that these costs represent approaches five and a half trillion dollars in the U.S. economy annually. So if we addressed some of these we could pay for health care five times over and have money left over to address other critical issues like maybe education, homeless folks, and other similar societal issues. So what am I missing?

Our current economic system has retreated in a way to a kind of capitalistic feudalism. The industrial revolution was largely based on "dumbing down" tasks and activities to make them simpler and therefore more "efficient". The skills required to perform these tasks decreased and correspondingly so did the wages. Technology provide even further assistance, machines and "systems" can do what people used to do cheaper, faster, and many times more efficiently. In exchange for "compliance" we offered employees a certain degree of economic security. Then a world economy happened. Other economies began using "our" systems combined with their own enhancements and lower wages and we lost our competitive advantage. Our solution in many cases was outsourcing to these economies. At the root we forgot to include people in our "solutions", and now we are paying for it.

Research about engagement demonstrates that the U.S. economy is operating at about 30% of its potential efficiency. Before other economies gloat too much I would point out that this puts us in the top quartile.

Organizations that have a well developed engagement strategy enjoy significant advantages in productivity, profitability, and sustainability. Those terms sound pretty capitalistic to me.

Engagement is not measured exclusively by employee "satisfaction" or tenure. It is not a short term strategy or for the faint hearted. It also requires to examine and rebuild our relationships between: employer and employed, "vendor" and customer, and organization and community. We need to examine how we hire, how we train, how we reward, how we communicate, and most importantly how we relate to and value one another. The upside is that properly executed we can recapture some of those trillions and address compelling issues and not spend anymore money.

Is is just me or does that "value proposition" sound interesting? So I would ask again:

• If not now when?
• If not us then who?

Looking forward to your thoughts......

What Happened to Us?

Almost 250 years ago the United States was founded in large part on the basis of two principles:
· The right of personal property; the ability through your own efforts and sweat to own property and build your own future.
· The right of personal competency; the right and responsibility for each person to develop their skill sets and to plan and execute their own future.
These concepts were radical in view of the feudalism that had ruled most of even the “civilized” world. Your destiny was defined not on who and where you were born, but rather what you chose to do with it.
In my white paper, A Social Contract for the New Millennium, I talked about how I feel that concepts like scientific management, pure capitalism, a move from an agrarian to an industrial society and other factors contributed to the degradation of these principles, but what I see lately troubles me even more.
In the 1940’s people like Deming talked about new approaches to total quality management, which interestingly enough began being referred to as Japanese management techniques. Immediately following World War Two the United States was the undisputed industrial power in the world. I will even go further and say that it was our industrial capacity that played a huge role in the defeat of the Axis as well as our military successes. We were the place that everyone came to study business and the home on entrepreneurialism. The productivity of American workers was some of the highest in the world.
I have heard the arguments that it was the unions and government socialism starting with FDR and followed up with other Democratic administrations that gutted it, but I don’t buy it.
Let’s look at some pretty unpleasant realities facing us right now:
· A study in the Journal of Business Strategy estimated employee turnover costs the U.S. economy $5 trillion annually.
· Another study by the American Health association says we lose $200 billion to “presenteeism, a phenomenon where people “show up”, but contribute at a marginal level because of their own or family health care issues, economic insecurity, or just plain dissatisfaction with their job.
· A 2008 Gallup Consulting study estimates the U.S economy as operating at a 30% rate of efficiency because of lack of employee “engagement”.
· A Conference Board study on employee satisfaction released last week reflects that 55% of Americans are dissatisfied at work and if you look at the under 25 demographic it grows to 64%!
· We have a second class health care delivery system.
I realize that the stock market is moving back up and that Wall Street is about to announce record bonuses, but these numbers scare the hell out of me. We are talking about things like a “jobless recovery” and while Wall Street has profited they aren’t sharing the wealth. What happened to the ingenuity and tenacity that put us at the top of the world’s economies?
There are a number of factors that contribute to where we are including:
· Globalization, if you haven’t gotten the email it is here to stay.
· A lack of solid leadership. Leadership is still defined in most organizations as a “nice to have” or an HR initiative rather than a strategic focus. In my opinion what is being taught in our top graduate schools is management, not leadership. They are related, but they are different.
· A lack of alignment. We are not aligning people’s contributions with business goals and objectives. That’s why we are at a 30% efficiency rate.
· Lack of a cogent customer service model. Most organizations have old fashioned customer service models; they aren’t engaging their customers anymore than they are engaging their employees. Anybody who experienced air travel recently can give me an amen to that.
· Changing expectations. In this regard I mean customers, employees, communities, etc.
The interesting thing is that if you look at the factors I have posited is how many of them come down to relationships and trust. A survey by Punk Rock HR gives a brief summary for the biggest reasons for the “newer generations” dissatisfaction:
· We read about 8 figure bonuses for executives and you want us to accept 3% salary increases as “market”.
· You told us (and our parents) that you would provide us with employer sponsored quality health care.
· You changed our retirement plans and tied them to the stock market so we could do “better”.
· You told us that moving the manufacturing base to Southeast Asia, China, and India was good for “business” and that we would create a “knowledge based” economy.
· Your response to the recession and 10% unemployment is that those of us who remain employed should be “grateful”.
I don’t know about you, but I can kind of see their point.
Maybe I am being overly simplistic, but doesn’t it seem like much of these issues are directly correlated to the relationship between employer and employed? I have thought so for thirty years! That is why I developed my model Moving from Compliance to Commitment. I have spent years refining and testing it. My premise is that when you give employees a chance to “join up” with you they will contribute at a higher level.
Turns out I was right. A Gallup Consulting study from 2008 showed that among other positive results companies with high engagement demonstrate:
· A turnover rate 51% lower than peer groups
· 27% lower absenteeism
· A per capita productivity rate 18% higher and
· 12% higher profitability
A different study from Rhoads and Whitlark and BlessingWhite drew the same conclusions. In fact they showed shareholder returns 13% higher and the productivity and profitability impacts of increasing engagement in environments like retail is nothing short of astounding.
Global research organization ISR’s research director, Patrick Kulesa, put it even more clearly-
“Our research continues to show that a well substantiated relationship exists between employee engagement- the extent to which employees are committed, believe in the value of the company, feel pride in working for their employer, and are motivated to go the extra mile- and business results”.
Now let me tell you what really bothers me. Less than 30% of U.S. businesses have any kind of a strategy for addressing these issues. To the best of my knowledge there is not a single government led initiative exploring it either. I read about a government initiative recently- in the U.K.!
It kind of reminds me of the early days of the total quality movement. Even though it was pioneered in the U.S. we largely ignored it because we didn’t find the need compelling. It was only when our products like automobiles, electronics, and others began to suffer did we look at root causes. We just gave big banking a trillion dollars and the average American isn’t seeing much benefit. Are we seeing a trend here?
The other issue for me is that this is not a “technical issue”. While I have a lot of respect for my colleagues who have black belts in Six Sigma issues like trust and respect are not going to be solved by “process improvements”. For those of us who see ourselves in leadership and management and the fields of organizational development and human resources management this represents a crisis and an opportunity to provide real leadership.
So let’s do a quick review. We have 10% unemployment, historically high employee dissatisfaction, and an underfunded second class health care system. We lose $5 trillion to turnover and another $200 billion to “presenteeism”. Maybe I am just confused, but am I the only person seeing some opportunities here? So what is it exactly we are waiting for…?

Change Is In the Air- I Think....

It has been an interesting couple of weeks. I have heard from several people I am close to that they have found important new roles that they are pleased about. I have decided to make a change and sharpen my focus in my own endeavors. The stock market is up- at least temporarily. Many economists are declaring the recession over.

The first thing that is interesting to me is the issue of the economy. I have heard "experts" begin to refer to this as a "jobless" recovery. I don't get that. Is that like Jumbo Shrimp? How to we pronounce the recession over if we have large numbers of people who are still unemployed or underemployed? Because the stock market is up? How is that affecting your personal financial well being?

I read some information recently about a change that concerned me, but didn't shock me. The "change" was that the large financial players have been using the bailout money to fund investments in the market rather than reinvesting in programs and things that really benefit the average American. Coming from financial services recently that doesn't surprise me that much. Most financial service organizations stopped making their profits in the traditional sense; the "margin" between what they paid for deposits and what they make loans for some time ago. They borrowed some "creativity" from other industries and found that there are much better opportunities to generate fee income for "services" such as overdraft protection, ATM access, and other transaction fees.

The interesting thing to me is that they are missing huge opportunities to increase their income and benefit their stakeholders by utilizing things like supply chain management and TQM techniques, but they have been relatively slow adopters.

This weekend the House passed the most sweeping legislation since Medicare on health care reform. Depending on which side of the equation you represent this is either a huge step forward or the continuing "socialization" of our economy. I am suspending judgement. I think our current health care system has significant flaws in a number of areas, notably our ability to deliver high quality health care in an efficient and cost effective manner.

I had hoped that the recession might cause more employers to examine their relationships with stakeholders, especially employees and to address flaws in our models that have existed for years. In many cases I feel like we lost traction. We went back to the "be grateful you have a job model".

We need a new leadership model. Much of our leadership modeling is based on financial and economic metrics- i.e. a "jobless" recovery. When I read about the stresses and reactions from those stresses I am concerned that we are kidding ourselves.

I have decided to focus my "change" efforts at a very basic level, by hopefully effecting the way organizations select and orient their senior leadership teams in their hiring and selection process. My colleague, Joseph Skursky refers to this as "hire hard-manage easy".

I see things on the web asking whether it is OK to probe employee's values alignment with your organizational values before you hire them. My answer is "duh", of course. You can't and shouldn't get into protected areas, but do you really want people in your lifeboat who don't support or understand your core values? I have to tell you after thirty years of experience, changing somebody's values is really hard. It is much easier to align them upfront.

As an employer you also have the freedom within reason to set the values of your organization and require compliance if not commitment to those values. You aren't saying to those who don't share your values they are bad people, you are saying they would be better suited in an environment where they share the organization's values. Trust me, people who are technically competent , but don't represent a good "fit" will never really be outstanding performers.

So I think that we are at a stage where we accept the status quo or we become our own personal change agent. I know which choice I have made, what about you?

Is This Our Future?

I was reading an article on Newsweek.com today titled Doughnut- Hole Country and I have to tell you some of the parallels I saw in this article about brain drain in rural communities made me pretty uncomfortable. The article is based on an interview with authors of the book Hollowing Out the Middle.
The premise of the book that much of America’s rural “heartland” is shrinking in terms of population, experiencing “brain drain”, and seeing their economies spiral downward. Although they are talking about 700 counties stretching from the Dakotas to Texas some of the reasons this is happening and the outcomes look eerily familiar.
One of the reasons they feel this has happened is that the K-12 educational system is largely focused on “Achievers”, kids who are seen as “smart” and are guided towards university educations in the larger cities where they are more likely to succeed, and to stay. The students who are seen as less “accomplished” receive less focus and attention. They are also more likely to stay in the community.
Much of the “heartland” has traditionally been known for an agrarian economy. It is where much of our food is grown, but large “agri-businesses” now control much of the property and the production. Family owned farms are diminishing. Many of the remaining population doesn’t have the skill sets to work in “new” industries like computer technology, health care, sustainable energy and other emerging sectors.
These same geographies are disproportionately affected by global “outsourcing” and the relocation of jobs to other countries. This causes further disruption to their economies. The interesting effects of outsourcing include the fact that much of innovation occurs in the manufacturing process. When you outsource that process you also outsource the innovation that comes with it. Some might argue that this is a form of social and economic Darwinism, the “strong” communities survive and thrive, and it is natural selection. Unfortunately one of the ancillary effects is that people follow and you also see the resulting issues like high crime rates, homelessness, and other “benefits” of these clusters in big cities. People move to the cities to access broader and richer social service infrastructure not available in smaller communities.
Here are some of the parallels I see between what the authors describe and our own community:
· A significantly shifting economic base. Lane County was primarily built on the base of the extraction industry- aggregates and timber. As these industries have been reduced by legislation and technology we have not replaced them with a new viable economic infrastructure. Whether we want to admit it or not dollars from those industries built much of the infrastructure we all enjoy including our cultural centers and our world class university.
· Educational elitism. I remember being part of the Contact 2000 program on several occasions here in Lane County. This was an iniative where we went out and spoke with businesses about impediments to growing or even keeping their businesses in Lane County. I was told by several that a major issue was the availability of a workforce with the requisite skills. They felt that the educational system was very academically oriented. Pursuing a “trade” or craft was discouraged. They even pointed out that most of the high schools and even our local community college discontinued or reduced vocational educational programs like wood shop, automotive repair and even home economics. Better to be a “college educated” restaurant server than a trade person.
· The “left behinds”. We have several generations now in Lane County who in past generations would have pursued family wage jobs in those extraction industries that I mentioned previously. That isn’t an option for them anymore.
· Population shifts. Because of our fragmented economic base and poor affordability index we are experiencing another parallel to the “heartland”. The 4J school system is facing issues regarding funding and school closures because of the shrinking k-12 population in its boundaries. Young families have moved out of Eugene in large part because they can’t afford to purchase a home in “urban” Lane County. The combination of voter initiatives limiting property valuation and taxation and Eugene’s desirability for “retirement living” added to the lack of industrial tax base exacerbate the issue. It also puts pressure on smaller communities who in many cases don’t have the infrastructure to support the influx of population.
· Our bright young people are leaving the community. We haven’t created an economic base for them to stay. There are no major employers or industries for them to work in post graduation. So they go to Portland or Seattle or somewhere else.
If I seem like I am being critical, I am. I came to Lane County over 20 years ago. I was drawn by an excellent school system for my children, access to a world class university, and the livability of a relatively small community. I was one of the lucky ones to benefit from working for an employer who paid national scale wages. I was concerned then that the high technology base that I joined was small. I was lucky, when I lost my job I was able to transfer my skills to an entreprenurial role providing consulting to new businesses that located here.
We recruited our last major new economic player to Lane County in 1994 with Levi Strauss. Sony, Shorewood, Hynix and others have come and gone. Some see their departures as corporate manipulation; having worked in Fortune 100 corporations I saw it as a function of a world economy.
In truth we were not very hospitable in large part to these employers as well. We complain about the taxes we deferred, but refuse to recognize the millions they spent in wages, infrastructure and related investments. I for one saw the tradeoffs and being in our favor. We contributed to if not caused the decision to build the new hospital in Springfield rather than Eugene because we allowed political agendas rather than a regional economic strategy to drive our actions.
During the Clinton Administration we received an “allowance” from the Federal government for a period of six years in the form of the Rural Schools and Community Self Determination Act to help us defray some of the impact of lost revenues from restrictions on our extraction industries. It was clear it was intended to be a bridge while we developed a strategy to make up for the loss. Our Congressional delegation has been able to extend some of that funding for an additional two years, but what have we done with our eight year lead time? Wasn’t that sufficient time to develop a strategy? I would defy you to find a business that gets eight years warning that their funding is drying up.
I applaud the efforts to build sustainable businesses and to foster entrepreneurialism, but I think we need a broader more cohesive strategy.
Our rural communities suffer from the impacts even more. I would suspect that more of the “left behinds” are represented in communities like Oakridge, Marcola, Elmira, and others than the South Hills of Eugene or Thurston.
The “brain drain” is being played out especially in the area of health care. We have a critical shortage in the number of trained health care professionals in the state of Oregon ranging from CNAs to nurses and physicians. We have one medical school in our state located in an urban area. Studies say that a significant portion of health care professionals stay where they complete their training; this even further impacts our rural communities. Their best and brightest that go to Portland to attend medical or nursing school are not likely to return “home” to practice their craft.
I don’t want to be a “carpetbagger”, someone who enjoys the fruits of what this community offers, but plies my trade elsewhere. One of the “haves” rather than “have nots”. I don’t want to avoid the downtown because of empty buildings and the homeless or not use the library because I don’t want to risk punching out an obnoxious kid panhandling me for change. And the next time I read an article about “Doughnut-Hole Country” I don’t want it to be about the community I live in. The time for rhetoric is done. We need to step up and create and implement a real strategy. Now before we read about us in Newsweek.

Personal Accountability

This has always been an interesting topic to me. Some of the events of the last few weeks ranging from athletes punching one another out to kids returning to school seems to make it particularly relevant.

A colleague and I were discussing this topic the other day especially as it pertains to health care. Isn't it interesting for all the debate about whether there should be single payer, a public option, how much it will cost, etc. there is little discussion about the individuals role in the whole health care discussion other than as a beneficiary.

I have some pretty strong opinions on this topic. Among them I believe that all Americans should have access to a basic level of health care much like public education and that until we provide that the costs will never really be managed.

I also believe that individuals have a right and responsibility to participate in the management of their own well being and health. We don't talk about that very much. I would venture to say that the majority of Americans who have health insurance are also covered by a group plan- employer, government agency, association, etc. so they have little understanding of how much their health care actually costs and care less until it impacts them in the way of increased co- insurance, higher deductibles, denied claims, or related activities.

I have mentioned a couple of other related concepts regarding health care like our inefficient delivery and focus on the costs of processes rather than paying for outcome based management, but this is a different issue.

I remember years ago when a new employer arrived in town and declared a tobacco free workplace. People were outraged. How interesting? An employer who took the position that if you knowingly contributed to the detriment of your own health they didn't care to subsidize your real or potential higher expenses so they wouldn't hire you.

We tried to pass a law recently requiring all restaurants to post calorie counts for everything on their menu, luckily it failed. Would we want to extend that to homes like the dram shop laws?

Dram shop laws extend liability to private individuals for serving intoxicated people or allowing them to depart your home intoxicated without at least attempting to intervene. Can you see requiring a menu with calorie counts at dinner parties?

I think a big part of the issue is that of personal competency. Personal competency is that "other" right that constitution provides us with in addition to the concept of personal property.

When we began to industrialize and people left the "farm" many went to work for large employers. Large employers responding to both collective bargaining and offering competitive compensation began offering "fringe benefits" including paid time off, retirement and pension plans, and group health insurance benefits. A few years ago it was not atypical for employers to pay all the costs for health insurance for employees and their dependents. Employees had no idea and didn't care what they cost. Add these third party payer systems to advance health care techniques, technology, and a few other things and we created a trillion dollar health insurance industry, and very high expectations.

Very few employers to my knowledge even today talk extensively with their employees about ways they can contribute to lowering health care costs. The idea of "mandated" health screening, enforced wellness, and sliding employer contribution rates based on lifestyle health care costs would probably be seen as some type of corporate fascism. Your employer shouldn't be able to tell you how to manage you lifestyle, right? Even if they pick up the majority of the cost....

I believe until we address the personal accountability issue and employers
actively engage and educate their employees about the root causes of many of the costs we will only be addressing part of the problem. What do you think?

Where Were You When The World Stopped Turning

Alan Jackson, the great country singer included those lyrics in his beautiful song about 9/11. Tomorrow we recognize the eighth anniversary of that event. I remember the shock, disappointment, anger, and horror I experienced that morning and over the next several days.

I also remember that although there was some very real ugliness, I felt like Americans and even the world had come together in a way that I hadn't seen in a very long time.
It is interesting to think about our "journey" over the last eight years. What have we learned from it?

I agreed I think with the majority of Americans that finding the perpetrators and ensuring that this kind of thing would never happen again was a primary objective. I am sad to find us engaged in two wars in some part directly connected to that event and feeling a little like we haven't made much progress understanding Islam or its followers and that in our desire to punish the guilty we have alienated a lot of others.

When I look at some of the angry rhetoric being exchanged over economic policy, health care, and related issues I wish we had some of that bipartisan spirit that we exhibited post 9/11 to addressing some of our current domestic issues. Don't mistake what I am saying, I am not an apologist for terrorism. I still firmly believe that those responsible for 9/11 and other terrorist incidents should be hunted down and prosecuted with a degree of finality that sends a message.

Maybe I am naive in believing that the current economic and health care situations also represent a crisis. Why can't we collaborate on solving those issues. I will admit I don't have a cogent answer.

So I guess what I will have to settle for is gratitude for the thousands of men and women in our armed forces who have served and will continue to serve to allow us to "debate" our differences. They don't get to debate policy, they just protect their country, some of them with their lives.

So amongst others I will fly my flag tomorrow in memory of those who died and those who serve. I will think back about the heroes during those immediately following days. I will also think wistfully about a nation standing together and hope it doesn't take another tragedy to unite us to that level. What will you do?

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?

The Power Of Relationships

As you all know I agree with Margaret Wheatley that the most important influence in organizations is relationships; not systems, not technology, but relationships.

I had the occasion to join a friend last evening with a friend and colleague of his I hadn't previously met. I found his friend to be charming, personable and very articulate. As our discussion turned to the inevitable " so what business are you in", he said that he worked for an organization that distributes a pharmaceutical type of product that is manufactured in Europe. What was especially interesting was that he shared their "distribution" network was almost exclusively based on relationship selling; no large sales force , no "cold calling". It is based on trust and referral.

A week or so ago I mentioned an article by Jeffrey Pfeffer of Stanford. He opined that much of the issue with health care in the United States is in many ways relationship based; most Americans rely on their employer for health care and for economic security. Compared to other countries our "safety net" is pretty small. He talked about the effects of stress about their employment and the accompanying systems like health care tied to employment and the direct correlation to health care issues. I agree with him.

I read some articles and listened to a couple of "idea casts" on BNET this week that illustrated the same thing from a different angle- the relationship between employees and leaders and how in these times especially employees watch their leaders for any sign of positive or negative events or signs. They do that normally, but in these times it is exacerbated to the nth degree. Marcus Buckingham says the most important attribute of leadership is clarity- people want to believe their leaders have a vision.

My own personal research validates information published by Peppers and Rogers, BlessingWhite, Gallup, and others about the power of engagement. I am talking about true engagement which includes customer, employee, shareholder, and stakeholder. Organization's with high engagement outperform their competitors consistently and by an order of magnitude. Engagement is about relationships.

I have written and spoken a lot lately about social networks and their increasing importance in communications strategy. I believe that social networking is about relationships.

I have also written and spoken about the "social contract". In historical times the poor were tied to the wealthy. They literally "belonged" to the property or estate for hundreds of years. The American "experiment" was all about eliminating that. You could come here and reinvent yourself.
You could homestead a piece of property of start a business. Then we ran out of frontier. Consistent with the rest of the world the Industrial revolution occurred. We exchanged the value of personal competence for the promise of "security" in return for "obedience" The power of the great capitalist was tempered only by the labor movement. That was about relationships,
however dysfunctional.

The "world" economy changed that social contract. American industry was not always dominant, our quality suffered and correspondingly so did our market share. Interestingly much of the "new" management models like lean manufacturing and TQM have very strong relationship components to them. U.S. companies retreated from economic security in return for "loyalty". Traditional pension plans are almost obsolete. The parental relationship between employers and employed relative to health care is in crisis mode. Our health care model is parental. We don't address root causes of costs, we shift them around. People don't want to share responsibility for their health or the costs of treating them. That is a relationship, although another dysfunctional one.

I am not suggesting that a "parental" model is appropriate. Anybody that has ever heard me speak, worked with me, or read any of my writing knows better. I rather like the concept of "personal competence" and relationships founded on mutual respect and honesty between employer and employed, taxpayer and government, supplier and customer, and individuals. A relationship based on respect, information, and mutual responsibility and built on a foundation of trust. Maybe I am just nostalgic or misguided, but I think that is what the Founding Fathers meant so many years ago when they formed this country.

Tomorrow is Independence Day, maybe a good day to reflect on what they meant and the critical relationships in each of our lives. I think that is what I'll do, how about you?

Dealing With Whole People

The past couple of weeks have been interesting to me. Sometimes I find myself to be more of an observer than a participant in things and my observations really stay with and sometimes trouble me.

A week ago today was Father's Day. As I get older the value of being a father and the significance of my children take on more and more meaning to me. We have kind of a tradition. My father in law, brother in law, and I celebrate Father's Day at least partially together. A big part of that is the recognition of the joy it gives my father in law to be surrounded by his children and grandchildren. My own father passed away several years ago, but I recall how much it meant to him. 2009 has been for me, like many others a tumultuous period to date. I can say that when I look at my children and what they have accomplished and the promise I see in their future it gives me a renewed sense of purpose.

My father and I did not always enjoy a cordial relationship. I am very glad to have the relationship with my children that I do. I respect them as people and as young adults and as a result we talk pretty openly and honestly. I hope that continues.

I watched the elections in Iran over the last two weeks as well. I was disappointed by the results, but heartened by the number of Iranians who voted their conscience and had the courage to openly express their sense of betrayal at the process. I am perplexed by the reaction of many Americans as to the role we should play in the process. We are currently engaged in civil wars in two different Muslim countries where to a great extent we were not invited and I am not sure we are welcome. Some would say that our "influence" in Pakistan is equally resented.

I find the newly "re-elected" President of Iran to be a petty tyrant and a demagogue of the first order, but do we really have the right or the need to insert ourselves in yet another countries electoral processes without invitation? When W won the election against Gore, a decision some would say was decided in the Supreme Court, did any other country threaten to invade us to "fix" the process?

One of the last things I find perplexing is our continuing fixation with Michael Jackson. I consider him almost a contemporary. We are essentially the same age and I have found his music at least on the periphery of my awareness since I was an adolescent. He was a gifted song writer and choreographer, but he was also a tortured soul with a lot of dysfunction surrounding him. The last several days the press seems obsessed with rehashing everything about him.

He was an entertainer, not a statesman. His personal life was an episode of the bizarre. Why with all of the other real issues surrounding us are we obsessed with him. Farrah Fawcett was a beautiful woman whose depth and dignity seemed to grow as she matured. She died from a horrible illness that didn't seem to be correlated to her life style. She has been almost a footnote.

I just read a couple of interesting opposing issues on one of my favorite websites- BNET.com. One of them is dealing with managing the whole person that is your employees; recognizing and cultivating their hidden talents and creating opportunities for them to utilize these abilities to your mutual benefit. The other is about why CEOs and other powerful people don't use social networking; because they are so powerful and so connected they don't need to, social networking is for those of us who are seeking validation.

I find that interesting to the point of amusement. Our current President seems to value the idea of connection and social networking; both as a candidate, and in his elected capacity.

My research and experience tells me that true engagement is one of the most powerful tools that organizations have at their disposal to improve their performance in every critical area and that only 30% of organizations in the world have a formal engagement strategy. I also read daily that trust in organizations, especially senior executives is at historic lows. Two of our mainstay industries; financial services and the automotive industry are relying on government bailouts to survive and much of the public is baying for the blood of their senior management.

Although it is very popular with consumers,health care industry professionals and others find a public health care model unacceptable. Good thing their network has their "back" and they don't need to rely on social networking or related media to make their case.

A lot of stuff in here I know. I will continue to try to understand and appreciate people one at a time and to build relationships. It is what I know and what I trust.