top of page
Writer's pictureBruce Cummings

What does the latest research reveal about "Healthy Organizations"?

McKinsey's report has important lessons for Hospital and Health System Leaders.


Organizations

"Organizational health is a moving target".  That's the opening line in an August 24 article, "Healthy organizations keep winning, but the rules are changing fast", in the McKinsey Quarterly.  Several revelations in this article will interest anyone working in healthcare, but especially those in or aspiring to assume leadership roles.


Since 2003, McKinsey OHI research has found that the best predictor of long-term performance by a company or organization is what McKinsey calls "organizational health".  By this McKinsey means "how well organizations align around a common vision, execute their strategy, and renew themselves over time". 

McKinsey research shows that organizations in the top quartile on "Organizational Health" score high on 9 dimensions or keystones of organizational effectiveness: 


  • Accountability

  • Direction

  • Coordination and control

  • External orientation

  • Leadership

  • Innovation and learning

  • Capabilities

  • Work environment

  • Motivation


Organizations that score high in these 9 attributes produce much higher returns and are far less likely to "show signs of financial distress or have safety incidents and are more likely to have employees who endorse their employer to friends and relatives." 

[Note to hospital leaders:  if your organization is concerned about its financial performance as well as worried about how to recruit, retain, and align staff at a time when there is tremendous downward pressure on margins and with as many as 75% of nurses and physicians saying they may exit the field by 2025, you'll want to pay close attention to what follows here!]


McKinsey regularly updates its OHI research in relation to the elements or characteristics that shape or drive those 9 keystones of organizational effectiveness.  This year their research brought to light 6 key shifts that executives in any organization, including especially those leading hospitals or health systems, should be alert to if they want to be effective in leading change and sustaining organizational excellence.


Here are those 6 new "shifts" or findings:


1) New finding added to External Orientation:  Create common purpose, showing your employees the "why" ie, it's not about broadcasting the details of one's strategic plan to staff but rather explaining why the priorities and direction of the organization matter so staff are emotionally as well as intellectually connected.  Note to healthcare leaders:  not having shared values and a sense of shared purpose or community are 2 of the drivers/predictors of burnout.)

 

2)  New finding added to Leadership:  Decisive leadership is good but authoritative leadership is obsolete (leaders need to embrace decentralized or "empowering leadership" where those closest to the work have agency and autonomy to make their own decisions in as close to "real-time" as possible.)  Note to healthcare leaders:  this is a crucial factor in reducing clinician burnout.


3)   New finding added to Innovation and Learning:  Navigate uncharted territory with facts and data, not intuition ("an unbiased approach to change makes organizations better at innovation.")  Note to healthcare leaders:  I would add be careful of avoiding the trap of "me-too-ism".  Hospital leaders are typically risk-averse -- not surprising considering the many challenges and demands placed on a hospital juxtaposed with limited financial resources.  But too often, I find hospital leaders are inclined to "go with whatever everyone else is doing" rather than charting their own course based on an objective, data-informed analysis of their unique circumstances, capabilities, and needs.


4)  Help employees be at their individual best every day. ("Organizations that create the conditions for employees to thrive are the ones that retain and attract talent.")  Note to healthcare leaders: this means maintaining safe, appropriate staffing levels and distributing tasks in such a way that clinicians can work at the top of their licenses.  It also means making sure clinicians have ready access to the supplies and support they consistently need to do their jobs [e.g., IT, pharmacy, environmental services, dietary, materials management).  Lastly, it means fostering the conditions that allow for quick decision-making and problem-solving at the front line.


5) New finding added to Innovation and Learning and to Capabilities:  Tech-enablement is important but spend on technology only when there's a strong business case.  ("Investing in tech and IT enablement is a waste of resources unless it directly boosts [clinical and/or business] performance.")  Note to healthcare leaders:  I would add, be careful about adopting every shiny new AI object.  Indeed, make sure front-line staff are directly involved in selecting and implementing any proposed AI enhancement.  Remember, too, that AI can be helpful in reducing wasted time or motion (ie, creating increased efficiency and less 'administrivia') but AI will not cure poor staffing plans, problematic or unnecessarily cumbersome policies and procedures, or outmoded management practices.


6) New finding added to External Orientation:  Act responsibly.  Note to healthcare leaders:  with rare exceptions, this injunction is generally not an issue in our non-profit, mission-driven hospitals and healthcare systems.  We consistently get this one right or at least moving in the right direction (e.g., tackling Social Determinants of Health [SODH], appreciating the Quadruple Aim, seeking to build a more diverse workforce that is broadly reflective of the communities served by the organization) -- but we have much to learn and do better in relation to the other 5.


Ready to transform your hospital or workplace?

Are you frustrated by adversarial relationships between front-line clinicians and senior leadership? Organizational Wellbeing Solutions was formed to enable senior leaders to identify the specific drivers of clinician burnout in their organization; and to support leaders in designing and executing a comprehensive plan to stop clinician burnout, increase retention, and improve operating results. A hallmark of our consultancy is correcting the all-too-frequent distrust and alienation clinicians feel toward the C-Suite generally and the CEO in particular. Let us help you help your organization and its clinicians develop a more trusting, aligned, and productive working relationship.

4 views0 comments

Comments


bottom of page