Last month we discussed three of the most common organizational challenges we encounter as consultants. The three organizational challenges we discussed included ego imbalance, weak collaboration and limited transparency. As consultants, the real challenge is not in assessing these organizational handicaps as they are easy to spot. The real challenge is successfully navigating the land mines they may lay in our path, and having the insightful influence strategy needed to help our clients overcome them. Sometimes it is the consequences of these organizational challenges that result in the need for our services. Consequently producing high quality technical delivererables may correct the immediate need but have little to no impact on the root cause.
When we have the opportunity to skillfully address both symptom and cause, we find our greatest value as consultants.
- Do you have any examples where you have assessed these organizational challenges and been able to make a difference in helping your client overcome them in some manner?
When entering a new engagement we must assess the organizational landscape beyond our technical abilities. Part of our effectiveness as consultants is our ability to interpret the environment in which we operate in our assignment.
What are the top three organizational dysfunctions that we are most likely to encounter when we go into a new engagement.
Three things to consider:
- Ego Imbalance: When arrogance and power or fear and insecurity are excessively driving behaviors. Seeing through this lens and understanding this landscape can help us determine the most impactful influence strategies and avoid many landmines in how we are relating to our clients.
- Ineffective Collaboration: It’s really important to understand how our client collaborates (makes and communicates decisions) in their environment. Assumptions in this regard can be very costly.
- Lack of Transparency: Inclusive communication is key, especially the pipeline from shareholders to stakeholders. Transparency increases buy-in and teamwork. Transparency produces stakeholders.
Are there common issues that you’ve experience or observed when entering the new environment? What other advice would you offer to your fellow consultants?
The right mindset and a strong focus on the work at hand will make for a smoother transition from the corporate world to the consulting world. There are also a few key factors that can make this transition better for both the consultant and client.
- Discovery: Conduct an environmental assessment (observe carefully, then quickly map the decision making, problem solving, collaboration and communication culture of your client)
- Alignment: Listen 50% more than speaking; recognize how you need to adapt your approach to be influential; define boundaries associated with the best approach to client relationship building
- Execution: Not just fitting via silence but intentionally combining what you’ve learned from your assessment with influence strategies that lead the client in the right direction and at the same time build confidence in your ability to advise them well.
Defining Roles and Responsibilities
With each client, there will be different practices and parameters of the job. When you clarify what you’ll be delivering and what the client’s expectations are, then it will be easier to communicate and work together. Learn more from this Forbes article
Knowing How to Think Before You Do
As a consultant, thinking before doing can help you create better solutions and understanding of the client’s issues. Next time, before you jump in, try a little extra thinking before accomplishing the task at hand.
Earlier on the blog we talked about “house” rules (You’re in MY House Now) when entering an engagement and how important it is to proceed with caution until the client feels comfortable with you in their environment. But what about before you enter an on-site engagement?
Prior to entering the engagement, you may or may not know the project manager on the engagement and that could cause some disruption if a unified stance is not taken. The unified front will form the consultant team together, whether they are working in the same work stream or not. For example, working together on the front-end of the engagement by exchanging information the night before or after hours can help support creating a common goal and smooth out issues while working with the client. This could help build the communication even if you are working on different work streams. If your team is better prepared, then you will appear as a well-oiled machine to the client.
- Do you have any tips for entering an on-site engagement?
am.bi.gu.i.ty (n.)
- Doubtfulness or uncertainty as regards to interpretation
- Something of doubtful meaning
An essential characteristic of world-class consultants is the ability to tolerate ambiguity. This is a critical attribute for achieving success on any client engagement. This ability to constructively tolerate an ambiguous, chaotic or rapidly changing environment and become a source of positive influence can make or break a project’s success. Understanding and translating environmental client conditions and needs into the right advisory dialogue without being irritated or annoyed allows you to think creatively when helping clients solve problems, making recommendations and providing consultative guidance.
Situation with Ambiguity
In 2011, Jeanne Bateman (Warbird PC) was on a client engagement project with a billing problem. The Billing Department was several months behind due to staff turnover and essentially no one was able to tell what the client had or hadn’t paid for. There was no structure in place that easily enabled Jeanne to follow the cash. She had to think creatively on how to piece the puzzle together by cross-referencing and only counting things once in the process. To reach the end-goal, Jeanne had to work with four different groups of people within the company. She gathered lots of data and made it into a structured product that their field personnel found extremely helpful. Beyond this end-product, another report was created from IT for A/R to use for collections and Jeanne also outlined a financial audit work plan that other Warbird PCs were able to use on this same client engagement project. Ambiguity played a huge factor in Jeanne’s work but she was able to find creative ways to get around it, and ultimately she impressed the client.
Overall outlook for Healthcare changed from stable to negative; 2014 will be at a “tipping point”
- Negative Pressures are accelerating:
- Ability to contract for revenue increases and the ability to make major cost deductions is becoming harder
- We are dealing with physician cost and capital cost pressures.
- State Medicaid is growing as a percentage of the payer mix: unknown whether the ACA subsidies will really help the hospitals
- If the Balance Sheet is weak now, it may be too late to improve it to a sufficient degree.
- However, on the positive side, many hospitals are showing good strength in cash position built over the last few years.
- Equal number of upgrades as downgrades in 2013. Likely to shift to more downgrades than upgrades in 2014. Nearly 400 rating affirmations in 2013.
- Will CFOs be able to discern real P&L benefits from the massive IT investments being made? Theoretically yes in the longer term, but really unknown.
What are your thoughts on CFOs discerning real P&L benefits from IT investments?
“Change cannot be installed and engineered, and so it always takes longer and is more difficult than we ever imagined.” – Peter Block
When implementing a new program or process on a client engagement it’s easy to just follow the blueprint and install it manually. Instead of just installing the work at a client space, there needs to be an enhancement to the strategies and that’s where engagement comes in during implementation. Becoming more engaged, on both sides, leads to better results in the long-run.
Two Aspects of Implementation for Consultants
- The technical work using the expertise you have spent developing over years of real-life experience
- How to build support for the business or technical change you are planning
- Real changes require real commitment, and part of your role is to help fire that spark.
Key Takeaways
- Too many consulting projects result in cosmetic change: the thinking and rhetoric about the change are perfect, but the experience of people does not match the promise.
- No single person runs a business, no one person makes or delivers a product, and no one general ever fought a war.
Today, virtually all health care CFOs appreciate the need for their organization to demonstrate value. It’s no longer as simple as chanting the mantra “volume is everything”, like many of us have for so many years. Not only are we in a delivery cost crisis, we are in an insurance crisis. Now is the time for hospitals and physicians to integrate economically and clinically and focus on the efficacy of care. Now is the time to align economic incentives among the providers. Now is the time to figure out the economics of the transformation we are in. We aren’t quite ready to kiss employer sponsored health care goodbye. But most of us know we can’t ignore insurance exchanges, co-ops and consumer transparency. The good news is we have some time to pilot innovation – but it is not unlimited. The bad news is we must get started now as the transformation from volume to value and related cost-management takes time and effort.
Following is a quick quiz to see how your organization is progressing toward the value-based payment and care world ahead:
- Have you defined the size and scope of your primary care network and laid out the plan to develop it?
- Can you and your physicians demonstrate with practical, real life examples how your organization is helping to bend the cost curve and why this is good economically for them and the hospital?
- How does Wall Street view your strategy to accept “payment risk” – is it a credit strength or negative outlook in your credit report?
- Do we engage our members/patients with outreach and medical management programs that help mitigate population based payment risk?
Warbird Consulting Partners has partnered with Valence Health of Chicago, a leader in value-based care analytics and payment model innovation, to help address these strategic financial and operational challenges. Lower fees for service payments and deteriorating volume is accelerating around the country. We think now is the time for carefully experimenting with new payment arrangements, risk arrangements, “bundling” and forecasting the potential impacts on your P&L. Take a look at population health and risk through a financial lens and plan your forward thinking strategies accordingly.
David Kirshner, Healthcare Director and Sr. CFO Consultant, Warbird Consulting Partners
“Resistance is a predictable, natural reaction against the process of being helped and against the process of having to face up to difficult organizational problems.” – Peter Block
During client engagement or interacting in the business world, you will one day be faced with resistance from the opposite end. Understanding this resistance will be key to your success when helping to solve a problem. Resistance comes in multiple forms that may sometimes be easy to detect while other times it may be very difficult to identify.
For example, if the client keeps reminding you that this is the “real world and we have real world problems”, then you may be up against an emotional issue that may lead you to go forward with a more practical approach.
Skills for dealing with resistance:
- Be able to identify when resistance is taking place
- View resistance as a natural process and a sign that you are on target
- Support the client in expressing the resistance directly
- Not take the expression of the resistance personally or as an attack on your or your competence
What types of resistance have you dealt with and what skills did you use to deal with it?
Information System costs have increased significantly as the industry has expanded its primary focus beyond the acute aspects of healthcare into the physician, outpatient and risk arenas. Costs have also been significantly impacted by the number of applications. The computer has become an integral part of business and clinical processes rather than primarily financial applications limited to a small number of users.
Although the size of an organization can result in some economies of scale the basic number of applications does not increase proportionately with organizational size. In addition, the more integrated solutions can be more cost effective than a “best of breed” approach.
The biggest factor impacting IT costs is the number of “bolt-ons” and the degree of customization made to the solutions provided by the vendors. Organizations need to periodically assess the functionality of their applications to determine if the functionality of a core application has matured to a point where the bolt-ons may no longer be needed and determine when a core application is functionally good enough. Avoiding idealism and thoughts of “the system needs to do it the way we have always done it” are key to optimizing the cost effectiveness of IT solutions. Workflow should be reviewed in the light of the approach designed into the application.
To sort these questions and arrive at a cost effective IT solution requires a mature IT governance and oversight processes. The governance process should reflect the overall strategy and culture of the health system, provide value, manage risk and result in measurable performance. Guiding this process should be a senior IT governance committee that has clear oversight of the capital and operating budget with authority to allocate funds to the various projects and initiatives within parameters set by the board and/or executive team. Major projects over a certain dollar amount should be specifically authorized by the board and/or the senior executive team and reported back on a regular basis to those forums. This oversight committee should be chaired by a key executive such as the COO and have a membership representing the customer base. Finally, process should also incorporate PMO best practices and reporting.
This all comes together via an IT strategy that has a 5-year, 3-year and 12-18 month perspective. The alignment with the organization’s strategic plan should be robust enough to be directionally correct so as to not have significant changes in IT priorities in a 12-18 month period.
An in depth understanding of the IT costs, optimizing each application, focusing on integrated solutions and avoiding idealism are key factors in optimizing a cost effective IT solution. This requires a mature IT governance process led by a dedicated leader with membership representing the customers of information systems to guide the Chief Information Officer and his/her team.
Jim Gravell, Director & Sr. CFO Consultant