There is not much good that can be said about COVID-19: illness and economic disruption in the extreme, including a major stop to most business travel. The only positive I can think of is that the travel hiatus has opened up more time for quality conversations with clients and colleagues from around the country. A conversation during this period that I greatly valued was with Jim Collins.

In my opinion, Jim Collins is today’s most sophisticated thinker about business and leadership issues. I am sure that most of you are familiar with his bestselling books like Good to Great and Great by Choice. What may not be quite as obvious is that Jim never stops learning and never stops thinking. His research process is intense and rigorous.

Jim and I had a wide-ranging conversation about a variety of leadership issues, but eventually our discussion turned to COVID-19 and the leadership test that the pandemic has presented to healthcare CEOs. The primary question that arose was what would be the personal and organizational characteristics that would separate winners from losers during and after the COVID pandemic.

As we talked, four principles came to the fore that apply to healthcare leaders facing perhaps their greatest professional leadership challenge ever.

 

Principle One: Readiness

“What organizations do before the storm affects how they perform during the storm”

Organizations that spent their time building the “best house” before the hurricane are most likely to still have the “best house” once the storm passes through. The bulwark of strong healthcare organizations, such as a strong balance sheet, scale, continuous performance improvement, and clinical excellence, are all results of longstanding effort and focus. And the payoff for that longstanding effort is an overall organizational readiness. Ready organizations will weather upheaval in volume, revenue, and the general economic environment. Ready providers pivot quickly to meet new demands. And they take advantage of strategic opportunities that a crisis can bring.

 

Principle Two: Discipline

“Organizations that are undisciplined when times are good find that such discipline is critical when a crisis hits.”

When the pandemic emerged, we saw organizations with the habit of discipline put that habit to work immediately. Inundated with COVID patients, disciplined hospitals set up command-center structures through which daily, or even hourly, reports on issues such as the availability of ICU rooms, ventilators, supplies and workforce were gathered, organized, and acted on.

That same discipline allowed such organizations to multi-task in the midst of clinical chaos. The most disciplined hospitals and systems immediately recognized the need to predict fast-changing financial results, including declines in revenue, profitability, and short-term liquidity, and then to immediately address a cost structure that was no longer properly correlated to declining revenue. In some cases, all of the above was accomplished in a few short months despite the fact that the clinical demands of COVID were an all-time great managerial distraction.

 

Principle Three: Competitive Separation

“In times like these, the separation between organizations tends to be permanent, and those that are weaker tend to fall further behind.”

Strength translates into strategic flexibility. COVID-19 is very likely to change the overall healthcare competitive dynamic in profound ways. Organizations that went into the pandemic financially challenged will have limited choices coming out of the pandemic. Larger, stronger organizations will build scale and invest in capabilities that will create a better and more permanent competitive position.

As one CEO told us, “If you’re going into this strong, use this time to figure out how you advance toward strategies that you could not pursue under normal circumstances.”

 

Principle Four: Durability

“As organizations, we can orient ourselves around transactions or around relationships. Especially during a crisis, the most durable business orientation is around relationships.”

Healthcare is a highly transactional undertaking: appointments, exchanges of information, testing and results, billing and receivables—even on occasion diagnoses and treatment. Yet underneath all of these transactions are deeply personal relationships with patients; families; team members; employers; suppliers; local, state, and federal governments; payers; and communities.

During the COVID crisis we heard time and time again about the power of these relationships. Good relationships with vendors and suppliers improved access to PPE and ventilators. Good relationships with local government meant setting aside politics and finding solutions to unprecedented problems. Good relationships with staff fostered a willingness to work in new roles under sometimes harrowing conditions. And good relationships have led to trust as patients return to hospitals for needed care delayed by all things COVID.

Our era of high-tech dominance puts a huge premium on friction-free transactions in everything from grocery shopping to food ordering. And there is no denying the importance of perfectly executed transactions in satisfying consumers and running a world-class hospital.

There is no doubt, however, that COVID-19 has shown again how much high-performing healthcare organizations depend on the goodwill of longstanding relationships at every level of day-to-day operations.

My thanks to Jim Collins for pointing out the deep leadership lessons of recent months. In my opinion Jim is a hall-of-fame thinker and teacher. And he reminds us, once again, that effective leadership begins with the best thinking and teaching that we can all muster.

Meet the Author
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Kenneth Kaufman

Managing Director, Chair
Kenneth Kaufman offers deep insights on the economic, technological, and competitive forces undermining healthcare’s traditional business model.
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