What are the Factors?

a) An issue that actively contributes to an accomplishment, result, or process.
b) A quantity by which a stated quantity is multiplied or divided, so as to indicate an increase or decrease in a measurement.

For Healthcare there isn't one factor that contributes to success rather a series of factors that are all interrelated. Many organizations put significant emphasis on the economic factors as the key measure of success. The problem with this approach is like playing tennis by watching the scoreboard. The score is not the game it is the result of the game dynamics. Business results are outcomes of hundreds of moving factors and processes. Given the state of Healthcare, strategic factors are moving targets and require a constant measurement on developments that could alter an organizations performance.

The Healthcare Industry has numerous factors that are influencing its future. These include, but are not limited to the following:

1. Economic factors
2. Market factors
3. Consumer factors
4. Enterprise Resource Planning factors
5. Enterprise Risk Management factors
6. Regulatory factors
7. Technology factors
8. Supply Chain Management factors
9. Competitive factors
10. Supplier Factors
11. Industry factors

Successful companies have a "system" to constantly monitor the "vital few factors" that influence the business. Effective feedback mechanisms and process measures insure accurate data collection and analysis that can provide keen insights into changing dynamics that impact end results. Many businesses react to change by adjusting processes, people and performance without the benefit of understanding underlying dynamics. The more changes that occur the more management tries to adjust only to find out later that the efforts did not improve results rather added resources, expense and complexity to organizational processes which perpetuates further complexity and cost. This method create a negative cycle of business performance which is usually met by layoffs, budget cuts and constant reorganization.

Many mature organizations need reinvention. If you are helping your company reinvent itself as needed, you need to go beyond merely being flexible and responsive. Reinventing a mature company often means changing its mental model, including its approach to customers, suppliers, employees, and everyday working habits. It means constant evaluation and awareness of the big picture, as well as awareness of the details of getting everyday business accomplished. It means being ahead of change instead of being behind it.

There is a great untapped potential in revitalizing mature organizations within the Healthcare Industry. If tapped, mature organizations could become more relevant and valuable to their customers, they could enjoy greater growth and profitability, and they could create more and better jobs for their staff.

The potential remains untapped:

Mature organizations tend to think that they already make the most out of their potential -- that is, they believe they are doing the right things. They behave like they are deaf when their fundamental beliefs are questioned. The more successful they are or have been, the worse their hearing becomes.

If mature organizations somehow realize that they have a problem (or an opportunity) to improve, they lack the tools to carry through the necessary change, particularly because the transformation that they need is different from what they know. Mature organizations are highly experienced in improving the way they do things, but they lack the capability to question whether they do the right things at all.

You may well be part of the problem: Are you so much a part of your organization's success that you have lost the ability to step back and look upon your organization at a distance? Managers in particular need to remind themselves constantly that their mental model must never become one of tradition -- it should be one of necessity, oriented toward the future instead of the past.

There are three factors that make mature organizations easy targets for the virus that turns success into failure. The three factors are size, age, and success . While organizations grow, they get more management layers, they establish more departments, and they introduce more and more rigid procedures. As they mature, they establish routines and traditions that tend to make business as usual the norm rather than the exception. Although they enjoy success, they become complacent, lazy, and even arrogant, eventually forgetting the needs of their customers that were the initial source of their wealth and success.

One surprising observation is that mature organizations normally don't realize the progression of their transformation from success to failure. They watch their core business become a cash cow business -- that is, a stagnating business that generates income and cash -- and they apply their surplus cash to acquire other businesses that they may consolidate into the existing business. The acquisitions add to the short-term top line and also improve short-term bottom line through downsizing and rationalization. If there are no such acquisition opportunities available, mature companies pay out larger dividends or buy back shares from the market.

Mature organizations also become increasingly blinded by their current mental models:

1. They fail to discover changing customer needs.
2. They are bound by marketing and sales channels that gradually become obsolete.
3. They stick to product/service concepts because they fit existing business models.
4. They treat employees the same way their managers were treated in their early years.
5. They use their bargaining power to put unfair pressure on suppliers and intermediaries.
6. They increasingly focus on management bonuses and other incentive programs.
7. They believe in short-term financial performance and shareholder value creation as the only genuine criteria for success.

For many organizations, this process has happened in parallel with the overall change from the industrial era to the knowledge-based society, and many of their shortcomings have become more serious because of this change in society.

Just like industrial corporations were not created top-down by government decree, the transformation of organizations toward innovative, knowledge-based, and networked partnerships will grow from below. Visionary leaders will inspire peers and other associates to break the rules of conventional business and jointly move their organizations into second cycles of innovation and growth.

Jay Deragon & Associates service starts by providing an assessment of the factors influencing your business results. From this assessment a plan for improvement can be developed that insures improved results and effective transformation.

Future publication of analysis and insight into each of the factors defined will be available in the future. To receive these publications please email JRounds@jayderagon.com and be sure to add "Healthcare factors in the subject line.