The challenges to timely strategic decisions in health and human service organizations has been the topic of much discussion among the OPEN MINDS senior advisor team after we published our articles on that leadership issue – Is ‘Fear Of Failure’ Your CEO’s Leadership Challenge? and Failure Need Not Be Catastrophic.
Over my career, I’ve seen the “role” of non-profit specialty provider organizations in local health and human service systems shift from “a partner extending government policy,” to “a competitive vendor to government.” And I’ve seen the market shift from “guaranteed” funding for serving as part of the local safety net, to competing for funding or contracts with health plans (for Medicaid and Medicare). These are not small changes, but rather significant changes in both mission, role in the value chain, and business model.
This point was driven home to me in some commentary on our articles, from Scot Adams, Vice President for Advancement at Notre Dame Sisters and the former director of the Nebraska Department of Health and Human Services’ Division of Behavioral Health. He drew a fine point on the issue – that there were previous expectations that health and human service provider organization executives would run their organizations like a government or public entity. Those expectations have shifted, and non-profit executives are being asked to behave more like their private sector counterparts. He wrote:
Your article reminds me of how very different government is from the private sector. Rather than an environment of taking the risk and willingness to fail and adapt, the decisionmaking of government executives is more focused on risk avoidance. More typical is a response to the effect “We must act so that ‘it’ never happens again.” And it is not usually said within a learning framework: more often retributive, regulatory, and restrictive.
Generally, government executives operating from a core value of equality. Government is not the private sector and people who think government should be run like a business know too little about which they speak.
The current question is the complementary nature of government and private sector relationships. Each needs the other.
We need our executives in the private sector to be savvy to government’s useful and necessary world view, which is often focused on handling the “crisis du jour.” This is because the core, fundamental value for government is to provide equality through sameness. Government will generate regulations to tamp down inequalities or perceptions of inequalities – but it may also tamp down the innovations we want.
The private sector can generate good ideas on value – and we need good executives to keep these coming because some will get through eventually. You can get good top executives in government to break ice on new ideas and visions. The Centers for Medicare and Medicaid Services (CMS) had a great one, SAMHSA has had some very good visionaries in recent times. But the risk is that the antagonists get too much attention and government then has to reduce scope or the unevenness of programming.
I’m not entirely sure of the way out, but I think niche programming brought to scale over time in the private sector – both provider organizations and payers – is the better bet to see change emerge in systems. I think this will happen because, eventually, cost will win out when culture conflicts. Just be prepared that this will take time and be uneven – causing uproar for some.
I think we have seen the effects of “niche programming brought to scale over time” from the private sector in health and human services and this is the root of the transition of roles for the majority of non-profit service organizations. At a macro-level, the adoption of “managed care” by Medicaid plans and Medicare is a private sector innovation adopted by the public sector. There is the use of private sector funding in financing pay-for-success initiatives (see Managed Care Comes To Social Services – Some Advice From The Field). Public hospitals have been closed in favor of the use of private-sector provided services. Generally, county governments provide fewer health care services than they have in the past, choosing to purchase many of those services from private organizations.
I think it is not as simple as “non-profit organizations need to develop new strategies and a new business model.” They also need to re-invent their role in the community and their board governance model – and their executives needs to develop a new framework for leadership (for more, check out Courage As The Leadership Differentiator and What Does It Mean To Be A Visionary Health & Human Service Leader?).
Your strategy will mean bringing your courage to bear on your strategic planning. For more on that, join me on September 26 for the session, “From Strategy To Action: A Guide To Building & Implementing A Strategic Plan That Works,” on the first day of The 2017 OPEN MINDS Executive Leadership Retreat.