As the political debate about the meaning of “accountability” heats up, what healthcare leaders know is that in their sector, accountability is really about: “who is to blame?” From the Minister of Health, to the triage nurse, the entire system is driven by a culture and a set of ingrained behaviors of “blame” and “blame-avoidance”.
In systems and organizations that are blame-oriented, “blame-avoidance”, “politics” and “budget gaming” can consume up to 30% of the productive capacity of managers.
The truth is that these human dynamics in our healthcare system have created circumstances that are unfair and unsafe for everyone. In such environments, change, innovation and learning are very difficult to achieve. Retrenchment and cover-up would be the “normal” human response to these conditions.
But, is it possible for an organization to escape this pervasive healthcare culture?
The evidence says “yes”: when an organization strives to become a learning organization, and undertakes a learning journey in which they tap into their collective intelligence to transform themselves.
While leadership is key, change management scholars also tell us that a necessary condition for organizational and whole system transformation is having a common language and common framework for talking about, planning for, and implementing change.
In the healthcare sector, each of the stakeholders hold very different “mental models” of reality. Even basic assumptions on the meaning of the words that are used do not mean the same things to everyone.
A best practice Organizational Balanced Scorecard, LHIN-Level Scorecard, or Health Link Scorecard provides provincial governments, governing Boards, Health Link Partners and CEOs with a common accountability framework for coordinated strategy development and implementation. This best practice framework provides us with the four balanced perspectives of: Finance, Customer, Value-Added Processes, and Learning & Growth Enablers (see diagram at end of blog).
By adapting a best practice version of balanced scorecarding, and redefining accountability, healthcare organizations within a Health Link region would have a common methodology for managing change, improving collaboration and executing strategies that are in the public (i.e. the owners’) interest.
In our system, Governance Boards of HSPs have Performance Agreements with the LHIN. These set out high-level outcomes that need to be achieved – in return for the public funding that they receive. But the Board’s purpose is to represent the best interests of the “owners”; and, to hold management accountable for achieving outcomes that will be different in every organization – because everyone’s circumstances are different.
But, in addition to their silo-outcomes, Health Service Providers also have “system outcomes” for which they are accountable. These are contained in the Health Link Business Plan, and in their Performance Agreement with the LHIN which will incorporate each LHIN’s Integrated Health Service Plan (IHSP).
But what model will our macro healthcare system design be with the Wynne/Hoskins/Bell Team? A patient/system focus, or silo and hospital-centric focus? Will we intentionally shift from an acute care focused system to one in which primary care and the patient is in the centre? Will we end up with centralized bureaucratic control, or, with a customer-driven and community-focused model?
Best practice system and organizational design tells us that “every system is perfectly designed to produce the outcomes it produces.” We have designed a hospital-centric system for the benefit a many stakeholders — none of whom are patients.
If we want different results, we need to redesign the system. The uncertainty about “what direction” we are going in as the system is redesigned produces a turbulent, chaotic and unsafe environment for everyone.
Provincial governments have a key role in how they design the macro systems, structures and processes in our healthcare delivery system. In Reinventing Government, Gaebler and Osborne say that governments should empower citizens — by pushing control out of the bureaucracy, and into the community.
That has not been the direction of our provincial government — which has now bulked up from 5 to 16 ADMs to enable the MOHLTC to micro-manage such things as “approving local business plans” of local Health Links — which are also approved by the LHIN.
The problem with our current micro-management design: there are no cases where centralized controls and rigid bureaucratic rules have produced local innovation and customer satisfaction. Hello? Should we not be dismantling this top-heavy bureaucracy?
Gaebler and Osborne advise governments to “measure the performance of their agencies, focusing not on inputs, but on outcomes. They should be driven by their goals – their missions – not by rules and regulations. They should decentralize authority, and embrace participatory management.”
If the MOHLTC and some LHIN officials who may have adopted a “command and control” culture were to shift their thinking and behavior to facilitation and collaboration, the system would stabilize, and then focus on the most appropriate changes that will be required to transform and improve the healthcare delivery system.
Our new Premier, Minister and Deputy need to ask themselves: what are we doing differently than the former Premier/Minister/Deputy? If they are following the same assumptions, they will produce the same/old, same/old results.
Governments and policy wonks love branding and re-branding exercises, but calling a program “2.0” does not, by itself, produce different results.
In addition to poorly designed policies from Queen’s Park, Boards of healthcare organizations are also increasingly being exposed as one of the many factors that are contributing to what the public increasingly believe is “poor management” of our healthcare system. That does not necessarily mean that our governors are of poor quality. Indeed, we don’t have “bad”, or “incompetent” Boards, we mostly have governance processes that do not reflect best practices.
It is the design of the “governance system” that needs fixing – not the governors or trustees. It is the existing lack of clarity that creates uncertainty and confusion, not the competence of those who are serving their communities through their governance role.
In a true Learning Organization, one of the fundamental principles of accountability is: “you cannot be accountable for anything over which you have no control.”
If CEOs are to be accountable for achieving the results that their Board wants for their community, then they need to be backed up by managerial systems, structures and processes that are designed to ensure that they are successful. They also need to be supported by provincial policies and incentives that will enable them to succeed.
If governance boards exist to represent the interests of the “owners” of their organization, they will note that the “owners” they represent, are also the “owners” of each of the other healthcare provider organizations in their community. In other words, the “owners” hold a “system approach”. They own the whole system — and they need it to function collaboratively. So, to represent their interest, is to take a “system perspective” — while being in stewardship to their own individual organization.
That’s what a best practice BSC process provides to CEOs, their Boards and government officials: a methodology for successfully managing complex strategic change. Governing Boards can play a key role in shifting the system — if they are prepared to model change themselves.
In his introduction to Board Work: Governing Healthcare Organizations, Stephen Shortell points out that “incremental improvement in Board structure, composition, skills or processes will not do the job. What is needed is a total rethinking of the governance concept and the implications that this holds for healthcare governance work.”
In the healthcare sector, combining the Collaborative and Generative Governance Models with Balanced Scorecarding and best practice Accountability Agreements — would allow such a “total rethink” to happen. However, some very practical advice: if an organization is to have a fair chance of succeeding, Boards must give their CEOs the time and space to develop their proposed Organizational Balanced Scorecard with their senior and middle managers – before locking into what the Carver and Pointer/Orlikoff Models call the Board’s “ends policies”.
While MOHLTC and some LHINs may represent a “threatening force”, rather than an “enabler”, helper or supporter; governance boards can choose to be coaches/mentors to their CEOs and intentionally create an environment in which innovation can flourish — as a direct counter-veiling force to the external threats.
Given that poor alignment between the Board and management often results in organizational dysfunctionality, it is very much in the interests of the Board — and the CEO — to commit to creating both an Organizational BSC, and a Balanced Governance Scorecard that outlines how the Board will “add value” to the achievement of the organization’s strategic outcomes.
Given the recent Minister Of Health Mandate Letter, it is clear that the Wynne/Hoskins/Bell Team does not intend to maintain the status quo. Change is going to happen at many levels of healthcare services delivery system. Since the system is fully inter-connected, policy-makers must look for the “unintended consequences” of their policy shifts.
Boards and CEOs also need to be prepared to invest the time and effort required to design what may be a very different relationship with each other to manage through the major changes ahead. They need to determine just how they will change their relationship and governing practices as we go through system and organizational transformation.
Accelerated and sustainable change is possible in organizations where the Board and CEO are engaged in a partnership to achieve the outcomes (“ends”) set by the Board. A partnership is a relationship of equality. However, in this model it is clearly understood that the Board is the “managing partner”. In effect, it can be thought of as a relationship in which the Board holds 51%, and the CEO holds 49%.
While it is clear who the boss is in this model, and it is understood that the Board has a duty to hold the CEO “accountable for outcomes”, the best results are achieved when Boards and their CEOs behave as though they have a 50/50 responsibility to achieve the outcomes that they set out in their Organizational BSC.
In addition to their Organizational Balanced Scorecard outcomes, CEOs also need to be held accountable for their “system” outcomes contained in their Health Link Agreement, and in their Performance Agreement with the LHIN.
Where Boards have also embraced concepts like Peter Block’s “stewardship” and Ron Heifetz’s “adaptive leadership” as core principles for governance, the focus of the Board is on: how they can contribute to ensuring that their CEO is successful.
After all, when the CEO is successful… everybody is a winner!
Today, we have a remarkably compliant system that provides high rewards for a sub-group of stakeholders and produces terrible results for patients and taxpayers. How can this be fixed?
In Carverguide: The CEO’s Role Under Policy Governance, John Carver points out that “an effective board relationship with the CEO is one that recognizes that job products of the Board and executive are separate.” He says: “effectiveness calls for two strong, totally different responsibilities. Either party trying to do the other’s job is interfering with effective operation. It is not the Board’s job to save the CEO from the responsibilities of their job, nor is it the CEO’s job to save the Board from their responsibilities of governance.”
While Organizational Balanced Scorecards and Balanced Governance Scorecards provide managers and Boards with frameworks and methodologies for achieving greater clarity on their distinctive roles, the real key to success is a commodity that is often in short supply in the healthcare system: trust.
In Trustworthy Government, David Carnevale describes trust as “an expression of faith and confidence that a person or an institution will be fair, reliable, ethical, competent, and non threatening”. All too often, however, work organizations destroy their employees’ trust. This is certainly the case in our healthcare system today.
If the Board does not trust the CEO, none of this can work. The flip side of this same issue is: whether or not the CEO can actually trust their Board. As Carver says, “CEOs have long been accustomed to Boards checking performance against unstated and unclear criteria. They are used to Boards that sometimes undermine the CEO’s authority by intruding into sub-CEO levels of the organization and even by directly countering the CEO’s instructions. CEOs are also accustomed to Boards failing to protect them and their staff from renegade, intrusive individual Board members.”
Below is a best practice Balanced Scorecard setting out the top two quadrants for the Customer and Financial “strategic outcomes”. The bottom two quadrants are the “enablers” of Learning and Growth and Value-Added Processes. The fuel tank is, of course the Learning & Growth quadrant.
NEXT WEEK MY BLOG WILL BE ON “REDEFINING ACCOUNTABILITY IN THE HEALTHCARE SECTOR IS AN URGENT PRIORITY FOR THE WYNNE/HOSKINS/BELL TEAM”.