Thursday, June 24, 2010

Edwin Lee on the Tiger We Are Now Riding

Some insights about why the leadership of large health care organizations has gone so wrong may be found on a blog I just discovered entitled "Dismounting Our Tiger," written by entrepreneur Edwin Lee. In particular, this post, triggered by the miserable results produced by BP in response to the gulf oil spill, posits the series of steps by which people become leaders of most big organizations, presumably including health care organizations:
1.They always followed orders and met the cultural expectations of their organization. They went along to get along. Early in their careers they were faced with a choice: they could make a difference or get promoted; they chose to get promoted. (Those who attempt to make a difference make waves for senior management and fellow workers who then deal with them as disloyal; troublemakers, heretics, or whistle blowers)
2.They were tapped for greatness (fast-tracked) by more senior persons early in their careers.
3.They carefully accumulated 'status' symbols like degrees, awards, medals, etc.
4.They avoided collecting demerits by taking risks and failing.

And here are the outlooks and capabilities they share:
1.They are culturally conditioned to administer their organizations as they are, not to deal with major changes either inside the organization or in the outside world. Their sole power structure comes from those who report to them and their boards of directors, who expect behavior consistent with past behavior. Should top executives initiate major changes, control of their companies becomes less certain and more difficult. (More importantly it risks their personal compensations). Leaders can’t operate in isolation, they need loyal power bases.
2.They see the world from the tribal perspective of their organizations. (Even after they go elsewhere as in the case of Larry Summers and Robert Rubin whose pro Goldman Sachs tribalism has helped to undermine real financial reform)
3.They rightly understand that relative size a marketplace is the dominant factor for survival and for growing profits. They focus almost entirely on that aspect of their business. (Much as a beautiful woman might rely solely on her beauty rather than develop her mind or personality)
4.They consider their leadership positions to be appropriate rewards for years of loyal service.
5.Their first order of business (as CEOs) is to gain control of their Boards of Directors.
6.They manipulate their Boards into paying inflated salaries, providing expensive perks, agreeing to golden parachutes and rewarding them with extravagant bonuses for last year’s performance.. (Over the last 50 years entire industries have been thus manipulated so that Boards now justify such parasitic compensation as 'competitive').

Does it all sound familiar? Does it sound like a description of many health care leaders we have discussed?

As Edwin Lee summed it up:
We, the public, are foolish for relying on these executives to plan for disasters or to care about the 'little people' either inside or outside their organizations, or to expect their boards of directors or stockholders to make essential corrections.

But in health care, we have been relying on our imperial CEOs, and woe unto us when the disasters start to occur.

1 comment:

Michelle W said...

Here's a musical summation of that concept: "Company Way," from How to Succeed in Business Without Really Trying.