Sustainability is a word on the mind of most executives and board members of specialty provider organizations. By definition, sustainability is “the ability of an organization to secure and manage sufficient resources to enable it to fulfill its mission effectively and consistently over time without excessive dependence on any single funding source, including maintaining its ability to continue offering quality services and having an impact.” (For more, see the facilitation guide from my executive seminar, Reinventing Your Organization In A Complex Market: Building A Sustainable, Performance-Driven Organization.) Or, to phrase it another way, “will we still be serving our consumers tomorrow?”
Reorganizing to achieve long-term sustainability has been elusive for many executive teams. So it was really a pleasure to sit in the presentation, Building A New Value Proposition: Strategy & Positioning For Sustainability, by Joseph M. Costa, MSW, the Chief Executive Officer, Hillsides, at The 2018 OPEN MINDS Children’s Services Executive Summit. Hillsides is a multi-service organization with five core programs— residential treatment, the Hillsides Education Center, family resource centers, foster care and adoptions, and the Youth Moving On (housing and support services). Based in Los Angeles, Hillsides runs on 95% public funding, has a $50 million operating budget, and serves 15,000 consumers each year. Mr. Costa gave the metrics of his multi-year plan to develop a long-term sustainable market position in terms of both mission and margin. On the mission front, the children served by Hillsides have permanency rates exceeding 70% and consumer satisfaction at 85%. On the financial side, Hillsides is moving toward revenue diversification, having a 90-day operating reserve of $10 million, and having unrestricted funds that are at least 10% of the operating budget.
So, how did Mr. Costa’s team at Hillside accomplish this? According to Mr. Costa, Hillsides’ success is built on five fundamentals—mission effectiveness, proactivity, opportunism, agility, and resiliency.
Mission effectiveness—Mr. Costa explained that Hillsides identified several strategy items that are common items of importance among provider organizations: permanency, well-being, and safety. He noted that Hillsides is driven by established targets, and monitoring where the kids are at in terms of improvement in their wellbeing, satisfaction, engagement, and safety. A key step to sustainability is to identify what you do that is needed and do it well.
Proactivity—Mr. Costa and his team at Hillsides put a lot of emphasis on making proactive strategic choices. Knowing the “long game” and making long-term investments is key. Mr. Costa noted that it was important to become nationally accredited. Hillsides looked at some of the fundamentals of its standards, to allow that to be a driver of care. Hillsides then invested in a residential-based services pilot that served as a precursor for some of the reforms being implemented, and what was needed for investment, integration, and to provide managers with real time information.
Opportunism—For Hillsides, part of the sustainability strategy was being prepared to take advantage of collaborations as they arise. Hillsides has participated in a range of affiliations, mergers, and partnerships. Mr. Costa noted that Hillsides encourages leadership to create these opportunities.
Agility—The marketplace is and has been a place of massive change for many years, and agile change management is a must. Mr. Costa noted shared that a constant mantra is to create moments or opportunities where the leadership group is engaged, and to be very intentional to put leadership their agenda.
Resiliency—Resiliency is about focus and staying power. The health and human service landscape is fluid with many moving parts and it is important to keep focused on the mission and sustainability. Leaders need to set strategy and engage staff to stay the course. Mr. Costa’s definition for this? Stay focused on mission impact and sustainability. Anything that doesn’t lead to a result is a distraction.
This “final result” was key to his final message on the day. Mr. Costa noted that this strategy keeps his organization in a good position to address the trends nationally and state level; noting that this foundational work is essential to being prepared for the future.
For more on sustainability, check out these resources from the OPEN MINDS Industry Library:
- A Successful & Sustainable Telepsychiatry Program Takes The Right Partner
- What Does It Take To Outlast The Disruptors?
- ‘Productizing’ Services For Competitive Success
- Failure To Launch
- Building That New Boat
- The New Leadership Challenge: Culture & Change Management In A Value Based Market
- How To Build A Strategy For Success: Best Practices In Strategy, Portfolio Management, & Scenario-Based Planning Breakout Session
- When Technology Becomes Integral To Strategy: Leading In A Virtual Environment
- Building A New Value Proposition: Strategy & Positioning For Sustainability
- Finding Your Next Cash Cow
And mark your calendar for The 2019 OPEN MINDS Strategy & Innovation Institute in New Orleans, Louisiana on June 4, and “How To Develop a Strategic Plan: An OPEN MINDS Executive Seminar On Best Practices in Strategy, Portfolio Management, & Scenario-Based Planning.”