Two recent articles about leadership in mega-organizations – Coca-Cola and Amazon – spurred some interesting discussions in our organization. In an interview with The Wall Street Journal, James Quincey, the new chief executive officer of Coca-Cola Co. said that he is hoping to “shake off a culture of cautiousness” within the company and encourage his team to “make mistakes” (see Coke’s New CEO James Quincey To Staff: Make Mistakes).
And, last month, in a letter to investors, Amazon founder Jeff Bezos noted that in making decisions with his team, he commonly relies on one philosophy: “disagree and commit.” If there is no consensus among the leadership team, a decision is made – and Mr. Bezos asks that the leadership team makes their objections known and then commits to the plan. This allows the organization can move ahead without consensus – and allows everyone’s voices to be heard (see In Just 3 Words, Amazon’s Jeff Bezos Taught a Brilliant Lesson In Leadership).
Both of these leadership philosophies revolve around the idea that failure is just part of doing business. And that’s what led to the discussion in our office. For health and human service organizations, particularly non-profit health and human service organizations, is failure just part of doing business? In an increasingly competitive market, developing new services and diversifying revenue streams are part of a sustainability strategy. But, not every new strategy is going to work – and that means that failure is an inevitable part of market-driven strategy.
But I’ve seen the executives of many organizations fail to act. Looking ahead, they can see the writing on the wall that their sustainable market position is steadily eroding and their cash reserves are dwindling. They fail to make final decisions about their plan or they have a plan, but it isn’t implemented in a timely, effective manner. The discussion among my colleagues centered on why this happens and what to do about it.
The “why” question is where it gets complicated. Based on the experience of our team, there are a few common situations to keep in mind:
- The chief executive officer doesn’t have the background (in terms of education or experience) to use environmental analysis, financial feasibility analysis, and planning tools to make market-oriented strategy decisions.
- The executive team (or board of directors or team members) don’t really embrace the “future vision” that is likely for sustainability of their service niche in the health and human service market.
- The organization doesn’t have the capital to effectively implement the strategy – so it is ineffectively implemented due to resource starvation.
- The organization’s board of directors is risk adverse and the chief executive officer is unable to effectively communicate the likely improved positioning, the degree of downside financial risk, and return-on-investment of the proposal to their satisfaction.
- The organization’s board of directors is risk adverse and will not approve any proposal with downside financial risk.
- The management team lacks the transactional leadership skills (metrics-based performance management, project management, service line development, etc.) to go from idea to service.
Obviously, each of these situations requires a different approach to find a solution. But I think there are some rules of thumb for executive teams to follow.
First, don’t allow your team to be paralyzed by decisionmaking. Launching a new service line; agreeing to a value-based contract; investing in new technology; initiating a new merger or acquisition; creating a partnership with a health system or accountable care organization – these are big decisions that require decisive action. Decide yes or decide no – but do the analysis and make a decision. It is the responsibility of a leader to move their organization forward and to assure the organization and its team are positioned and prepared.
As Mr. Bezos notes in his advice, that doesn’t mean you have to agree with every aspect of every decision you make, but it does mean you need to actually make a decision. For more, see Does Your CEO Have The Right Leadership ‘DNA’? and Strategic Planning In Times Of Crisis ( A Coffee Break Case Study).
Second, once you’ve made your decision, your team needs to find a way to help your internal stakeholders – from the board room to the front line – embrace the new direction. Committing to a new strategy or focus requires your management team to master the art of managing change. This includes communicating with your team about why the changes are being implemented, building a culture that incentivizes and embraces change, and developing the talent and competencies needed to manage change. For more, see I Know We Can’t Keep Doing What We’re Doing and The Continuum Of Change Management.
Finally, your team needs competencies for metrics-based management and management process excellence to develop and operationalize new strategies effectively. For more, see The Performance Competency & Culture Gap In Non-Profit Management Teams and The ‘How To’ Of Metrics-Based Management.
This three-part approach to “the new” increases the likelihood of strategy success. And, for more on preparing your leadership team to make the tough decisions, join us in September in Gettysburg, Pennsylvania for The 2017 OPEN MINDS Executive Leadership Retreat and the session, “Strategic Decisionmaking In Times Of Change – Colonel Joshua Chamberlain & Little Round Top: Defending The Union Line.” Historic Gettysburg serves as the backdrop for this immersive retreat, which is designed to develop current and emerging leaders who are prepared for the challenges of a changing health and human service field.