The Performance Improvement Blog

Leaders Make or Break Employee Engagement

A leader’s attitude and behavior determine whether an organization has an engaged workforce or not. In other words, what leaders think and feel and say and do has a profound impact on employee
satisfaction, enthusiasm for their work, desire to do their best, and commitment to go beyond their job descriptions every day. In an article for The Business Thinker, my colleague Jim Stilwell and I describe 13 ways in which leaders affect employee engagement. Here is our list: 

1. Understanding of Engagement

What do leaders know about engagement and how aware are they of their reasons for supporting it? What types of engagement will they and won’t they support?

2. Beliefs about Alignment of Engagement with Organization’s Strategic Goals

To what extent do leaders believe that engagement is necessary for achieving business results? Do they believe that employee engagement will help the organization be successful? And why do they believe this?

3. Beliefs about People in General

What do leaders believe about the desire of people to act responsibly, ethically, and in the best interests of the people around them? How confident are leaders that people will try to do their best? To what extent do leaders truly value the people around them? 

4. Beliefs about Employees

What do leaders believe about the behavior of their employees? Do they believe that employees always have the best interests of the organization in mind or do they believe that employees are always unthinking and uncaring? 

5. Emotional Intelligence

Can leaders perceive and understand emotions in others and in themselves? Are they sensitive to the social/emotional needs of employees? To what extent can leaders manage their own emotions?

6. Tolerance for Dissent, Conflict and Differences among Peers, Direct Reports, and Other Managers

Do leaders tolerate views that are different from their own? Will they listen to employee dissent without being judgmental and punitive? To what extent do leaders actively seek out views that are different from their own? 

7. Expression of Caring for Others

Are leaders authentic and open in their expression of appreciation and caring to employees?

8. Tolerance for Autonomy

Will leaders allow employees to act on their own without specific directions on how to complete a task? Will they allow employees to figure out for themselves how to best achieve a goal?

9. Trust

Are leaders both trusting and trustworthy. Do they do what they say they are going to do? Do they follow through on their commitments and responsibilities? Do they give others the authority and responsibility to make important decisions?

10. Bias in Decision-Making

Are leaders aware of the biases underlying their “fast thinking” decisions? Do they know how their biases are affecting their decisions? Is this acceptable to them? 

11. Thinking Patterns

Are leaders more cerebral, analytical, and logical in their thinking or are they more emotional and feeling based in their thinking? Whichever pattern is dominant, do they value this kind of thinking in others?

12. Beliefs about Leadership

What do leaders believe about good leadership? Do they believe that one style works for all employees (e.g., command-and-control) or do they believe that the style of most effective leadership depends on the situation? Do they believe that effective leaders are charismatic and operate from a base of power or do they believe that leadership and power should be shared with others? 

13. Self-Awareness

Are leaders aware of their values and beliefs and how their actions are viewed by others? Is the way that they actually practice leadership in sync with what they believe to be the best way to lead? 

We recognize that it’s a tall order to ask every organization leader to have this level of introspection. However, if leaders want employees to be fully engaged in their work and the organization, then leaders need to ask themselves these questions and understand the impact of their answers.

 

Employee Satisfaction and Engagement Once Again Linked to Financial Success

Still another study , recently published by The Forum at Northwestern University, supports the notion that satisfied and engaged employees are essential to the financial success of companies. Dr. James Oakley, now Associate Professor of Marketing at UNC Charlotte's Belk College of Business, led this comprehensive study of these factors across a sample of 100 media companies. His research team surveyed a representative group of employees in each organization and received responses from 5,568 employees, averaging about 60 respondents from each company. They decided on doing the research within one industry in order to prevent some of the problems that occur when collecting data from a heterogeneous sample of businesses. Several different survey instruments were used to measure culture, climate, HR managerial practices, and market characteristics affecting each company.

• They used R.A. Cooke and D.M. Rousseau’s (1988) definition of organizational culture: “…the ways of thinking, behaving, and believing that members of a social unit have in common.”
• They defined organizational climate as: “…the way that organizations operationalize their culture in daily routines and behaviors.”
• HR managerial practices included selection, development, performance management, and compensation.
• Market characteristics included customer satisfaction, retention, and loyalty. And profitability was used as a proxy for financial success.

The following chart represents key factors that were identified and the positive and negative relationships among these factors.

A major finding was “… a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance.”

Based on their findings, the investigators recommend the following:

1. Ensure that the employee voice is being heard up and down the organization and that they feel they are making a difference.
2. Regularly survey employees about the strengths and weaknesses of the organization and take visible action based on that information.
3. Develop a healthy mix of employee cooperation and competition for the benefit of customers.
4. Establish clear performance objectives related to the customer experience and recognize employees for achieving those goals.

What I like about this study is that, unlike so many studies done by consulting firms, this research examines intervening variables that explain how and why employee satisfaction and engagement are linked to financial outcomes of companies and how culture and climate contribute to the employee experience as well as the customer experience. Of course, one could still argue that the links are not necessarily causal. It could be that company profitability causes high levels of employee satisfaction and engagement rather than the other way around. But at least in the case of this research there is a compelling theory to go with the data.

The study adds to evidence that is piling up around the impact of employee satisfaction and engagement on organization success. As we emerge from a depressed world-wide economy, the long-term financial success and sustainability of companies will be more important than ever. Therefore, we need to pay greater attention to the conditions that contribute to a positive and supportive work culture. Now, if we can only get leaders to pay attention to these factors in their organizations. 

 

How to Keep Talent from Walking Out the Door

Are you worried about employee turnover in your company and how it might get worse once the economy improves? If you aren’t worried, you should be.

It has been estimated that as many as a third of employees are looking to change jobs. Now that the recession is easing and more companies are beginning to hire again, these employees will start acting on this desire.

My friend and colleague, Bernie Donkerbrook, retired Ford Motor Company program manager and now executive coach, places responsibility for retaining talent on the shoulders of an employee’s supervisor or manager. Bernie believes that there is much those managers can do to keep their employees engaged and productive. He writes:

In today's sluggish economic environment, companies operate lean, demanding more of employees in the process. Many are focused on surviving, not thriving. While uncertainty in the marketplace may keep employees loyal today, when the economy improves, they may be more apt to seek out career opportunities elsewhere. If organizations ignore the retention issue today, they will undoubtedly regret it tomorrow.

You should be asking yourself, “What am I doing to ensure that my key talent remains once the job market improves?” and, concurrently, “What am I doing to strengthen loyalty and build a positive work force, positive people, and good relationships with their immediate bosses?”

Here are actions you can take to increase employee retention (all of which are behaviors that can be coached, trained and developed in supervisors and managers):

• Improve relationships between employees and their immediate bosses. Many employees leave because they perceive that they are not appreciated, recognized, and valued by their immediate bosses.  Here is what you can do:
  • Have HR determine if there are supervisors/managers that have a higher than normal turnover rate in their units. Provide them with a coaching process for understanding and dealing with difficult issues. The supervisor’s/manager’s behaviors need to be understood and changed. There is usually a reason some bosses have higher turnover rates than others.
  • Make it clear to supervisors/managers that employee retention is part of their job and that long-term development of employees is part of their job, too...and part of their evaluation.
• Revitalize your organizational culture to include employee appreciation, recognition, and valuing.  “People honor a culture that honors them.” This is incredibly important…honoring, valuing, respecting and recognizing your people.  It makes a big difference in building loyalty to the company and also is definitely teachable.

• Remind your managers and supervisors of the power of the “Golden Rule” of behavior at work.
  • How would THEY like to be treated by their bosses?
  • What would THEY like to experience in their jobs?
  • How would THEY like to be recognized, appreciated and thanked for their efforts?
  • How long will THEY want to wait to be appreciated, recognized and valued?

• Tell your best people they ARE your best people. It is highly motivating to know you are well thought of. Let your best people know you want to keep them, to retain them with the Company.  Really… it makes a difference. Imagine yourself being told by your boss, or your boss’s boss, that you are important to the Company and they are counting on you.
• Ask employees what they need, want, would like to be doing. No promises, but it shows you are interested and want to make it work for them and the company.  For your best and key people, make sure they have a career development plan. This is so obvious but managers and leadership are so busy they often fail to take this seriously.  And, there is often no corporate plan to set this up.
• Ask employees for feedback on YOUR management behavior. How can you improve? What would they like to see more of and less of from you? Are you helping too much or not available often enough?
• Carve out one-on-one time with your employees.  Much successful retention and employee loyalty comes from, simply, one-on-one time with the boss.  Regularly demonstrate personal care and concern for individuals, their life and family, and what is important to them.  (Bosses may need coaching/mentoring on how to do this effectively.)
• Put people to work where they are their best.  Allow them to work at what they already do well, where they have excelled, and what they are excited about.  Ask them.  Everyone wants to be doing what they know they are good at and what they enjoy doing.
• Find out what inspires, motivates a person.  What is that person passionate about? Find that person work in these areas if at all possible.  At least, let him or her represent the company externally in the areas where there is passion.  This builds the corporate brand and demonstrates corporate engagement with the local community.    
• Find out if career growth opportunities are available for employees.  Do they have opportunities for development, growth, new challenges, and promotion? You may answer, as the manager, “Yes, of course.”  But what do your employees say about this?  There is often a disconnect between what employees experience in career development and what the company policy is said to be.  Do this:  Check it out. Find out what employees believe and what they experience on the job relating to career development. Most often, you, as the boss, will not like what you hear.
• Ensure that compensation is competitive. Eliminating any gap in compensation with the market is a great short-term neutralizer of negative energy.
• Pay for performance.  Do you reward better performance or is everyone at a similar grade-level paid about the same?  If everyone is paid the same, it is not very enticing for the highest performers when they know they are not appreciated in a financial way for their unique contribution to the organization. [Note: Plan pay-for-performance very carefully; these plans can have little or no positive effect if structured in the wrong way.]
• Pay attention to your stars, your top-performers.  Really! Stars will not wait around to be given authority, more responsibility, the opportunity to make decisions, or be promoted.
• Communicate, communicate, and communicate.  Find ways to let employees know you care about them as individuals.

Workplace Frustration Trumps Engagement

A frustrating work environment trumps engagement every time, especially for the most motivated and committed employees. This is the theme of a webinar (see video) that David Zinger, of the Employee Engagement Network, did with Mark Royal of the Hay Group and co-author of The Enemy of Engagement. Just when we thought engagement was the end-all and be-all of high performance, we hear that engagement without enablement will get us nowhere.

Enemy of Engagement from David Zinger on Vimeo.

 

Of course, it makes perfect sense when you think about it. High performing employees are easy to take for granted. They’re working hard, going the extra mile, and excited about what they do.  Yet, this is the group for which you should be most concerned. According to Hay Group research, 20% of them are feeling a level of frustration that will cause them to either cease being productive or leave the company. In this current environment of economic recovery, the choice of leaving is becoming easier and more attractive. Why would top performers stay and feel frustrated when they have options elsewhere?

Mark Royal describes the problem in this way:

The enemy of engagement in our terms is workplace frustration…we’re not talking about the rumblings and grumblings over tiny annoyances… the most engaged and committed people are the most ripe for feelings of frustration. Dissatisfied, turned off, disaffected, disengaged people can shrug off their inability to get things done…for motivated people who are highly committed to organizational objectives, those kinds of obstacles that they might trip over in the work environment cause a lot of discomfort and anxiety and that feeling of frustration that strikes those motivated and engaged people can really, over time, undermine motivation and commitment levels.

If managers truly want to retain the most engaged and committed employees, they must remove obstacles that cause frustration. These obstacles include:

• Inadequate training and training that is not aligned with business goals
• Lack of equipment to do their jobs
• Lack of a clear understanding of goals and objectives
• Lack of a shared understanding of priorities
• Not knowing boundaries of decision-making authority
• Ineffective work processes
• Work structures not aligned with business goals

Emphasizing employee engagement without removing these obstacles will only increase frustration and not produce the kind of environment in which the most talented and committed employees thrive. They might love their work and be committed to the mission of the organization, but if they can’t achieve their goals because of factors beyond their control, they will feel enormous frustration and, in an improving economy, look for greener pastures elsewhere. 

 

Investing in Training in Downturns and Upturns

The U.S. is emerging from a training drought that occurred during the worst economic period since the Great Depression. At least, that’s what’s indicated by organizations that do this kind of
research. ASTD reports an increase in spending on L&D in 2010 (latest year for which data is available); they estimate companies spent about $171.5 billion. Bersin & Associates reports that corporate spending on training increased 9.5% in 2011 – the largest gain in three years.  And Training magazine’s research found a 13% increase in spending on L&D in 2011. Each of these studies uses a different method for calculating spending. However, the trend is undeniable: spending on employee training is increasing.  

With this increase in spending comes a great opportunity to do things right. In our book, The 5As Framework, Sean Murray and I wrote that most training programs significantly impact only 10% to 20% of their participants. This represents a huge waste that no organization can afford any longer. As the worldwide recession comes to an end, organizations must use every dollar very wisely. Garry Marsh, director of the U.K. company THM Business Simulations, gives us some thoughts about best ways to use those dollars. Here are those seven ideas with my spin on each one:

• Get it right first time – Think in terms of what learners need, not the latest training fad (content or delivery). Only provide experiences that will help learners improve performance and contribute to achieving the strategic goals of the organization – no more and no less. Pay attention to the quality of content and quality of the learning intervention.
• Keep employee satisfaction high – Involving employees in opportunities to learn is an effective way to increase engagement. Many employees value learning more than a pay increase. To keep engagement high, make continuous learning part of the culture of the organization.
• Train your managers – Many managers did not reach that position because they were great managers of people. This is something that all managers need to keep learning. And if organizations want to prevent their top talent from leaving as the economy improves, they must give managers the opportunity to learn and grow.
• Focus on customer experience – All organizations should have the improvement of customer experience as one of their top strategic goals. To achieve this goal, they will have to train employees in how to create a better experience. Learning about the customer experience should be on every manager’s agenda.
• Spend less, get more – Organizations should not rely on the usual suspects and usual methods for delivery of training. It’s about learning; it’s not about glitzy programs. It doesn’t have to cost much to develop talent. Maybe a manager will become a more effective team leader with the help of a mentor. Maybe a manager will become more effective at giving performance feedback with the help of a coach. Maybe a manager will become better at financial management by attending the CEO’s “open-book” meetings.
• Be ready for the upturn – As the economy improves and companies start hiring again, the best talent will look elsewhere. They have stayed only because nobody else was growing and hiring. Unless managers continue to see opportunities in their current organizations and they feel respect from their leadership, they will be gone. Organizations should do something about these conditions now.
• Look after yourself – Many resources are available to help any organization be successful while keeping costs low. Look for help internally and externally. Use what the organization already owns when that makes sense and then go outside to peers, consultants, and training organizations when they can help you improve performance and achieve your business goals.

 

A Year of “The Performance Improvement Blog” in Review

It’s that time of year again. It seems like everyone has their top this or top that from 2011. Not to be left out, I thought I would do a little year-end reflecting of my own.

Throughout 2011, I used this blog to shed some light on critical leadership and management issues. The topics ranged from “the vision thing”, to shaping organizational culture, to improving the effectiveness of employee training programs, to building trust, to breaking down communication silos, to doing better presentations, to seeing organizational blind spots, to increasing employee engagement, and more.

Out of all of these blog posts I’ve selected five that seem to have had the most interest for readers. They are:

Hospital Culture Trumps Equipment and Techniques - Culture, with all of its values, assumptions, beliefs, expected behaviors, and norms, is a powerful force within organizations. Culture shapes how things are done. In hospitals, culture has life and death implications. Evidence suggests that health care outcomes are improved when the culture of a hospital encourages trust and honesty among staff and with patients and when people act consistently in accordance with these values.

Kirkpatrick’s Four Levels of Training Evaluation: A Critique – I explain why evaluating training by using a survey that asks trainees questions about each of the “Kirkpatrick Four Levels” is a flawed way to determine if that program is having a meaningful impact on an organization. Although a four-levels survey is a very common way to approach evaluation of training in organizations, it probably will not provide managers with the information they need. I suggest an alternative approach.

Performance Management is Broken - What is intended to pass for performance management in too many organizations today is the annual compulsory performance review. To label this a “performance management system” is to give the process much more credit than it deserves. A perfunctory meeting between a manager and employee once a year to review a standard rating sheet that lists competencies and goals that are probably no longer relevant, is not a performance management system.

How to Use PowerPoint – Millions of presentations are given every day using some form of slideware, often PowerPoint. It is an important communication tool of managers. Yet, management’s messages are not getting across. I frequently hear that employees didn’t know something that had been mentioned in an all-staff presentation, or that they didn’t realize its importance, or that they didn’t understand what it had to do with them. Apparently, PowerPoint slides are, in many cases, failing to communicate key messages. I refer the reader to suggestions for more powerful PowerPoint presentations.

20 Signs of Employee Disengagement - An important question for all managers is, “Do I have an employee engagement problem in my organization?" You don’t need an organization-wide survey to answer this question. Pay attention to what your employees are saying and doing. Look and listen for the clues. This blog post lists twenty tell-tale signs of disengagement.

Wishing you a healthy and prosperous 2012! 

 

What Kind of Leader Are You?

“What kind of leader do I want to be?” This is the question that leadership expert Meg Wheatley asks us to ask ourselves. She talks about the tendency of leaders in challenging economic times to resort to a command-and-control style of leadership, even though this is not what is best for the organization. In an interview Art Kleiner did with her for strategy+business, she said:

In most companies, we do not have (and I believe won’t have for the foreseeable future) the money to fund the work that we have to do. Leaders have two choices. One, they can tap the invisible resource of people who become self-motivated when invited to engage together. This approach has well-documented results in higher productivity, innovation, and motivation, but it requires a shift from a fear-based approach to a belief in the capacity of most people to contribute, to be creative, and to be motivated internally. Alternatively, they can continue to slash and burn, tightening controls, and using coercive methods to enforce the cuts. This destroys capacity, yet it is the more common approach these days.

This “more common approach” is being played out in health care these days. For example, hospitals are making deep cuts in nursing staff. I have no way of knowing if these layoffs are the only option for those hospitals. I do know that employee engagement and quality of care will suffer greatly in the process.

Regardless of evidence to the contrary, many executives, faced with difficult challenges to their leadership, almost reflexively, impose rules and restrictions on and increase monitoring of employees. The result is that employees put more time and energy into managing these controls and less into innovation and customer service.

 

20 Signs of Employee Disengagement

Employee engagement seems to be the current hot topic of survey organizations. Gallup, Mercer, BlessingWhite, and others are regularly conducting national and international studies of engagement. It’s interesting to discover from these surveys that roughly 30% of employees indicate that they are engaged in their work.

However, the more important question for you is, “Do I have an employee engagement problem in my organization?" You don’t need an organization-wide survey to answer this question. Pay attention to what your employees are saying and doing. Look and listen for the clues. Jim Stilwell, of Arborquest Consulting, and I have identified twenty tell-tale signs of disengagement. They are:

1. High turnover – the rate of employees leaving the organization is greater than what you want in this type of business
2. Absenteeism – the amount of time workers are gone from their jobs is hurting performance
3. Disgruntled/complaining/whining employees – negative comments about the work and the organization have become common place and are poisoning the environment
4. Time off-task resolving employee problems – you and other managers are spending an inordinate amount of time dealing with individual problems and with conflicts among employees
5. Employees and managers blaming others – people bring complaints to you without accepting any responsibility for their contribution to the problems
6. Lack of teamwork – employees resist cooperation and collaboration on tasks that require teamwork to succeed
7. Lack of performance feedback – employees don’t know where they stand in terms of their performance; they don’t know from day to day if they are doing well or doing poorly and what they need to do to improve
8. Lack of learning – employees don’t ask for opportunities to learn different jobs, improve their skills in their current jobs, or prepare for future positions
9. Difficulty attracting and retaining talent – you can’t find the right people for the work that needs to get done; when you do have the right people, they tend to be attracted to opportunities elsewhere
10. Difficulty developing talent, especially leadership talent – few employees are aspiring to or stepping up to leadership roles on teams, on projects, and for open positions
11. Poor product and service quality – employees are not doing their best work, are not paying attention to customer needs, and are not showing a high level of concern for quality
12. Customer dissatisfaction – you are hearing customer complaints that could have been prevented if employees cared more about the work that they are doing
13. Vendor dissatisfaction – you are hearing complaints from vendors that could have been prevented if employees cared more about their relationships with external business suppliers and partners
14. Low compliance with rules, regulations, and processes – employees are not attending to the legal and normative expectations of the organization; they are putting the organization at risk by their complacency
15. Theft, shrinkage, and waste – these inventory and operational losses are happening at a higher rate than what can be tolerated in this kind of business
16. High injury rate and poor safety – employees are neglecting the standards that create a safe work environment
17. Lack of innovation and creativity – you are not hearing new product and service ideas and new problem-solving suggestions from employees
18. Lack of initiative – employees are not acting on their own to start new projects that contribute to the ongoing success of the organization
19. Lack of trust – employees don’t come to you with their concerns, suggestions, and new ideas; they don’t ask for help in handling challenging tasks and interpersonal situations
20. Lack of recognition and celebration – employees don’t take time to publicly acknowledge the success of individuals, the success of teams, and the success of the organization as a whole

If you see any of these behaviors in your organization, then you probably have an employee engagement problem.  You don’t need to do another survey. You need to start addressing the problem before you lose the hearts and minds of your most talented employees.  

 

Re-Recruitment and Re-Engagement

Every new employee, whether a front-line worker or top level executive, comes to the job with a high level of excitement and a strong desire to do well. Then, sometime during their tenure in their companies, most cease being engaged and many start to look elsewhere for new opportunities. Companies cannot afford to have a disengaged workforce and lose their talent to competitors. This is true now more than ever.

A survey for the American Psychological Association conducted by Harris Interactive at the beginning of February shows that the stress and dissatisfaction workers feel is related to a number of factors. They write:

Money may be on workers’ minds, but that isn’t the only reason the American workforce is unhappy. Employees also cited lack of opportunities for growth and advancement (43 percent), heavy workload (43 percent), unrealistic job expectations (40 percent) and long hours (39 percent) as significant sources of stress. Additionally, less than half of employees (43 percent) said they receive adequate non-monetary rewards and recognition for their contributions at work and only 57 percent reported being satisfied with their employer’s work-life practices. Just 52 percent of employees said they feel valued on the job, only two thirds reported being motivated to do their best at work and almost a third (32 percent) indicated that they intend to seek employment elsewhere within the next year.

One of the most telling numbers in these findings is that only 52% feel valued. No wonder nearly a third are looking to change companies. In this economic environment (or at any time, for that matter), organization leaders should not neglect the hearts and minds of their employees, especially top talent. As I’ve written in previous blog posts, as soon as the economy starts to improve, those folks will leave, taking all of their knowledge and skills with them. And latest retail and hiring numbers indicate that the U.S. economy is starting to move in a positive direction.

Managers need to focus on re-recruitment and re-engagement of their employees, now. That same spark that people felt when they were hired must be re-ignited. Think about what you say to people you are recruiting to entice them to join your organization and how you could say that to veteran employees to keep them committed and doing their best work. Katherine Jones posted five re-recruitment “questions every manager should be able to answer” about an employee:

1. When was the last time I told this employee that his or her work was valued?
2. When was the last time this employee got a raise or promotion in the company?
3. Do I know what areas might impact this employee’s satisfaction with work?  (Long commutes, commitments with children or parents that may mean a home office would create a more positive working condition.)
4. Does the employee perceive that the company or department is fair and equitable in issues of salary, bonus, rewards and other recognition?
5. Do [I] burden the employee with excessive and perhaps unnecessary administrative work that detracts from the ability to spend time on the real tasks at hand?

I would add another question to this list: Does the employee know where the company is headed and how he/she fits into this picture? The results of two surveys of the U.S. workforce conducted by Modern Survey earlier this year indicate that the primary driver of engagement is “belief in the future of the company.” Don MacPherson, President of Modern Survey, believes that this finding is a wakeup call for CEOs to aggressively and intentionally let people know where their companies are headed and how they will get there. He writes:

Enlightened CEOs are communicating to their employees about the future of their organizations. They are providing the necessary roadmap for company success. They are transparent even in difficult times because they know that in the absence of information employees will make up their own reality…and it won’t be pretty…The CEOs around the country who aren’t enlightened better wake up. It’s a scary place out there and a lot of employees feel lost right now. Step up and show people the way or expect that employees won’t be bringing their best to the job – they’ll be too preoccupied with the frightening environment around them.  

Companies have a tendency to front-load the employee experience with the great expectations that will attract those workers to the organization and get them off to a good start. Then these companies seem to take their talent for granted. That is very risky behavior. As we see from survey after survey, a large percentage of employees are disengaged, which means they are not giving all they have to their work and their eyes are looking for greener pastures.

What do you do to re-recruit and re-engage your best employees?

 

Leadership and Health Care Reform

The Obama administration’s health care reform legislation will change incentives, which is badly needed, but it will not improve the quality of care unless an integrated, team-based approach also becomes the way health care professionals do business. This kind of approach is what the legislation refers to as ACO (accountable care organization). However, to be successful, such an approach will require health care professionals, especially doctors, to learn new competencies and form new attitudes regarding collaboration and cooperation.

The assumptions behind the new legislation make the need for change abundantly clear:

• the cost of health care in the United States on a per capita basis is too high
• the health of the United States population is too low
• health care in the United States is not sufficiently accessible, particularly for the uninsured
• health care in the United States is not sufficiently coordinated
• the quality of health care services in the United States is too low
• the federal government, as the largest purchaser of health care services in the United States, has the right to demand high quality, reasonably priced, accessible, coordinated health care services
• the federal government should no longer purchase health care services on a fee-for-service (or a la carte) basis because it gives health care providers an incentive to order more tests and perform more procedures in order to make more money
• there needs to be a “sea change” in how health care is delivered and paid for in the United States

Shifting from a fee-for-service model to a high-quality, low-cost model will address part of the problem. Don’t get me wrong - this change is essential, though the challenge with incentives is to ensure that “low-cost” doesn’t become more important than “high quality”. The other part of the problem is managing health care organizations in a fundamentally new way. Rather than the command-and-control style of leadership that is prevalent among doctors, nurses, and other health care professionals, these leaders will need to facilitate teamwork. They will need to respect and listen to the input of other health care providing organizations and integrate diet and life-style experts into the team. They will need to manage these teams so that optimum results are achieved for patients. They will need to keep all of the stakeholders engaged. They will need to draw out the best from everyone. And they will need to do all of this in a cost efficient manner. This is a tall order for people who come to their profession because of their high need for control, for prestige, and, for many, the financial benefits.

Health care professionals can be retrained if motivated. The real transformation of health care in the U.S. will come over time as a different kind of person is admitted to the health care professions and as measures are put in place to evaluate this team-based approach to delivering health care.