Unprecedented changes are hammering hospitals. Seemingly endless challenges push and pull from every direction: how services are paid for (or not), what’s now paid for (and isn’t), who’s controlling payments, and which bigger fish have their eyes on your organization as a delectable meal.
While the dangers of each element are debatable, the cumulative effect is not. Financial statements bleed red ink, growth is stunted or negative, and many institutions with proud histories reluctantly turn to the last resort of raising the white flags of consolidation, merger or worse. Bob Dylan’s famous lyrics ring true: “Then you better start swimmin’/Or you’ll sink like a stone/For the times they are a-changin’.”
Doom and gloom? Not necessarily. Many organizations will thrive. They will be the ones hitting on all cylinders with top-notch governance, management, clinical staffs, reputations and constituent support.
But none will succeed without a high-performing board. It is impossible to be a great health care organization over time without a great board. Other factors may win battles, but never wars. Governance needs to be on top of its game.
Board leadership, standards, sense of urgency and degree of engagement are trickle-down pacesetters and fulcrums for the whole organization. Sadly, too many boards have neither the mindsets nor systems to be that nimble. They may think that they do, but the evidence doesn’t support them. They are running in place. Lack of innovation and flexibility can make governance an Achilles heel.
Is your board like this? How much time and energy are devoted to passive reviews and other routine matters thought to be mandates, but that will prove strategically insignificant in hindsight?
Six Stepping Stones
The problem isn’t governance incompetence. It’s complacency.
Boards can be bound by tradition. Old policies and procedures aren’t questioned because they were learned decades ago on other boards at a time when the only things tweeting were birds. The familiar ways are comfortable. They’re established. And they can make good trustees into the boardroom equivalent of bobblehead dolls.
The sin isn’t sticking with longtime routines. It’s in not asking if the old ways still work in new times. Could alternatives be more effective? Have other organizations found better ways?
An energetic and focused board is essential to survive the storms of change buffeting hospitals. It’s also common sense. Trustees demand introspection and performance improvement from CEOs and from every corner of their hospitals. Why not hold themselves to the same standard?
There is no one-size-fits-all quick fix that will move a board to higher performance. In medicine, prescription before diagnosis is malpractice; so, too, in governance. No one can know what’s right for your board without a thorough diagnostic workup. And no one can flip a switch or provide a checklist that magically changes board culture.
Use these suggestions to get started. Each is a stepping stone to the board’s thinking and talking about how to respond to major changes.
1 Listen to data. A great starting point is a governance self-evaluation survey. Every board has pluses and minuses, and nothing will speak louder to trustees than their own opinions. Results shouldn’t be sugarcoated.
If a survey is already a regular practice, consider revisiting the results or switching to another survey as an attention-getting change of pace. The survey instrument should explore trustee opinion about every facet of governance and, ideally, compare results with those of other health care boards. Several strong survey tools can be found easily along with models to create your own as a starter.
2 Start at the top. Survey results will pinpoint areas for improvement. They should be a good starting point for a “Could the board be even better?” review. The board chair and CEO should agree that it’s time to consider best practices. Even skeptics will have trouble disagreeing that responsible stewardship calls for at least a reality check. Involving both the elected and informal board leaders will further pave the way.
3 Identify best practices. Exposing board leaders to governance best practices will get the ball rolling. A wealth of resources are available. The most reputable will cite case studies or other results. Beware of cookie-cutter recitations of so-called trends absent backup evidence.
Don’t be surprised to hear reactions at both ends of the scale, even from the best leaders. Most will express positive surprise that such ideas exist. They will want to know more. A few skeptics may need to be led to the evidence.
A road trip can help. Consider bringing core board leaders to a conference about governance best practices. Eyes will open hearing from and getting acquainted with peers who have benefited from new ways. Time away also will present opportunities for informal discussions about changing outmoded governance processes.
4 Take a break. The biggest step is to get all board members involved. The same steps used with board leaders may work here, but another effective strategy is to take a miniretreat dedicated exclusively to trustees’ exploring governance best practices. This session should not be part of a strategic or other retreat, despite the temptation to wander into other priorities.
Most boards are too busy governing to consider how they’re governing. Minds can be opened by exploring best practices. But discussion shouldn’t be casual. It should be structured and aimed at making changes that will strengthen the board’s ability to govern more effectively and efficiently.
The agenda will depend on survey results and the board’s readiness to innovate. A deep dive into survey results might be a good first agenda item. Another method is to have the board rate itself against best practices from national resources. An independent retreat facilitator or featured speaker can help with objectivity and focus.
One result is guaranteed: Even just a half day away from the usual routine will foster greater cohesion regardless of other outcomes.
5 Make it real. The best outcome is linked to the less famous line from the Dylan song: “Then you better start swimmin’.” The retreat should be more than educational. Decisions should be made around the question, “Will the old ways still work in new times?”
What needs to improve and when? One board that was successful at governance culture change concluded its retreat by agreeing on priorities and categories of change. The outline formed an action plan. Then, trustees divided into small work groups to recommend changes to priorities assigned to them. The rules were that unlimited innovations could be proposed. But they had strict deadlines. Every group did its job and, remarkably, every recommendation was accepted.
Implementation was spread over three years. But a new way of life in governance started right away. An already good board became even better. Its high performance in subsequent years proved to be a strategic asset to an organization now widely acknowledged as the pre-eminent medical center in a highly competitive region.
6 Consider an outsider. Resistance to change, internal politics, personalities, passive aggressiveness, a vocal minority or you name it can lead to analysis paralysis on any topic. And it can happen during any of the preceding five points. An unbiased external consultant may be the answer. His or her objectivity may help to overcome resistance. Confidential interviews by a consultant also may uncover the reasons for roadblocks that trustees may be uncomfortable or reluctant to share with others.
The Big Picture
Goals and outcomes will be as different from one board to another as their organizations are from each other. Those who want to assure that their board has systems and practices that match the challenges their organization is facing should focus on three long-range targets:
• reality-testing the way the board performs compared with the challenges faced by the organization
• helping each trustee focus on what really matters by freeing them from plodding through routine red tape
• re-energizing trustees in how they protect the charity and how they advance strategy
Will it be worth the effort? The answer, unequivocally, is yes.
Is your board prepared for the future? Find out by taking a short quiz.
Paul J. Taylor (email@example.com) is an author, consultant and former senior vice president of South Shore Hospital, Weymouth, Mass. He lives in Hingham, Mass.