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1Be ready for incremental changes and
In contrast to what the 24-hour news cycle may suggest,
health-care reform is a known entity. The changes that
are being implemented in the current business cycle
have their roots in a long-term movement toward quality and fis-
The prevailing wisdom in dealing with rapid industry changes
suggests that assessment and action should be based on a medium-
term time period, i.e., 12 to 24 months. This forces supply chain
leaders to shorten the normal 60-month planning cycle and consider
changes to be twice as rapid as before. It is important for supply
chain leaders to review how customers and competitors are act-
ing over this recent medium term, as well as how governments
are enforcing laws over the same timeframe. However, revisiting
plans and updating them for the next period does not require a
foundational revision. Remember that cost reduction mandates
and stakeholder service levels are not drastically changing; the
key is to keep up with the velocity of smaller, more incremental
2Renew your mission.
The mission of your facility or health system---and
what you stand for as an enterprise---defines the
purpose for your action plans. Your mission roots you
as a meaningful contributor to your health delivery
ecosystem. If the environment is changing in a way that places
the relevance of the organization in jeopardy, it's time to revisit
A few conditions can cause organizations to renew their missions.
First, if your core competencies and capabilities have expanded
or contracted, the mission needs to evolve. For example, clinical
innovation and the ability to address new disease states might
mean the mission needs to expand. Alternately, if you have lost key
personnel or a core technical edge, the mission should be modified
to compensate for the loss.
Second, if your core customers have experienced some fun-
damental change or are being better served by a substitute, your
relevance is a ected. For example, the emergence of a powerful
multispecialty group practice may threaten specific outpatient
services with declining volume. If this is the case, it may be time
to change the mission to reflect that reality.
Leading organizations frequently review their missions and
adapt, revise, innovate and focus them. By examining their core
competencies and finding ways to keep their missions fresh and
relevant, they continue to surpass their competitors in delivering
value to their constituents.
3Invigorate your operations.
After articulating a clear mission, start focusing on
execution. Look at the people, processes and technol-
ogy you deploy to implement your mission.
The talent resources of your organization are the
first and most consequential area to invigorate. The very act of
invigorating your operations will a ect the culture of the organi-
zation. As management guru Peter Drucker remarked, "Culture
eats strategy for breakfast." Driving cultural change is the best
tool supply chain leaders have to implement a clear mission and
strategy. Supply chain leaders should consider the culture they are
projecting and promoting.
4Dig into your metrics.
You get what you measure, and actions have conse-
quences that feed back to the organization through
measures and metrics. The best way to drive organi-
zational change is through incentive compensation,
though all adjustments should be done with care and planning.
Focus on a well-designed set of measures that conform with the
objectives of your mission. Well-designed measures consider the
roles of the personnel to which they apply. For example, if transac-
tion volume needs to speed up, the legal department may need to be
brought into accountability. But the function of the legal department
is to protect the organization against myriad contingent liabilities.
Therefore, a performance metric that seeks to speed transaction
volume could measure the average review time and solicit legal's
input on ways to speed it up without defeating the purpose of
proper legal review.
5Develop your people.
Achieving flexibility and driving organizational cul-
ture can't be done without empowering employees.
Personnel development is a staged process, beginning
with leadership, proceeding to middle management
and then extending to the entire organization. During periods of
uncertainty and amplified risk, the best investment that business
managers can make is in developing principled leadership. The next
best investment is to develop the business acumen of management,
and expose the organization to tools and techniques that can help
implement prudent action.
Sadly, one of the first budget items to be sacrificed during periods
of underperformance is personnel development. This is unfortu-
nate, because development and training have possibly the greatest
positive return during these periods.
If managers wait for the return of certainty to invest in the organi-
zation, positive return will be diminished, and a more crowded field
of competitors will prevent progress and stymie opportunities. •
continued from page 8
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