RushWeekly

Infinite Mindset

Why leaders need to shift focus to their Just Cause in 2020.

I am departing for Australia this week but wanted to leave you with some thoughts to help you plan for 2020.

Collectively we can have the biggest impact on the health of Americans by shifting our mindset and implementing policies that support all stakeholders – not just shareholders. 

Infinite Mindset

I’ve been reading a new book called the Infinite Mindset that frames the ideas that I’ve shared in earlier articles and posts about ethics, values and trust in relation to capitalism.

Infinite Mindset emphasizes the need for leaders to focus on their Just Cause [aka: vision] and to adopt the policies that promote the trust needed to support collaboration and innovation. 

The most courageous brands that you can think of attract and retain talent because they have a compelling vision for the future. Courageous brands pay employees well, offer meaningful work and training needed for continuous development and promote trust so that employees have the tenacity needed to overcome challenges.

You don’t need Apple’s profit margins to be a courageous brand. Paying your employees a living wage, reduces the cost and negative impact of turnover and enables your company to move forward. The ability to continuously improve and move forward [toward the vision] is how leading edge companies win the long game.

Ethical Fading

I’ve been using the expression “misguided understanding of capitalism” to describe the short sighted business practices that I’ve encountered over the years. Interestingly, there is term for it – Ethical Fading.

A few years ago, I was asked to interview for a CEO position of a company purchased by a Venture Capitalist [VC]. The company was running a strategy the was legal but ethically questionable. I was already familiar with the company and thought that I got the call because they needed my help in transforming the business. I couldn’t have been more wrong. 

The VC was doubling down on the strategy so that they could milk it to the very end. That’s referred to as a Finite Mindset. The meeting didn’t go well because I challenged the ethics of it all. It was so jarring that I debrief needed to debrief with another VC to get his thoughts on the strategy. He agreed with me.

The timeline often reveals the mindset. Activist Investor Starboard Value just took a position in CVS to “unlock shareholder value”. The first question is will they make CVS sell tobacco products again to recover the $2 Billion in annual sales or will they support the company’s Just Cause?

Ethical fading happens when investors and leaders are able to normalize questionable conduct because it’s not illegal. Some experts believe it’s a function of excessive pressure rather than a lapse of individual values and ethics.

Normalizing unethical practices:

Unfortunately when the law is unclear, many leaders implement practices that serve their own interests regardless of the broader impact. That’s when questionable business practices get normalized.

There are three [3] ways unethical practices get normalized:

  1. Leaders disassociate from it. They use language to mask the harmful impact.
  2. Leaders blame the system for their transgressions rather than getting out in front of the issues and working to fix the system. A recent example is the Mylan EpiPen Scandal. They inflated EpiPen prices and then blamed the system for a lack of pricing regulation.
  3. Leaders blame the consumer for not understanding the risks of their products and services. 

Just Cause

Leaders who take responsibility for the broader impact of their business practices consider the ethics of their decisions. They don’t try to hide behind the law, use confusing language or blame the customer.

Leading edge companies are in business for the long term and care more about fulfilling their Just Cause than short term financial gains. That’s the Infinite Mindset.

2020

There is a good article written about prominent economist, Mariana Mazzucato, about fixing capitalism. The article also frames the 2020 Presidential Election issues well.

On a personal note, RUSH is turning 20 next year. I’ll also be taking time to revisit my Just Cause while away. So you likely won’t see another post from me until next year. I look forward to connecting with you then.

Building Courage

Courage by definition is the willingness to do something that frightens oneself. 

In a business context it usually requires people to do the right thing rather than acting in their own financial interest. Doing the right thing is frightening for those with a lot to loose.

Ethics and compliance with regulations is comparably a low bar for businesses but still a challenging hurtle for companies focused on maximizing returns to shareholders.

Tenet Health

Tenet is a good example of a leading edge company focused on maximizing shareholder returns that has experienced compliance issues.

The company has made early investments in technologies that help them reduce operating costs, streamline revenue cycle processes and accurately report revenue related numbers.

The problem is that some operators put the financial focus ahead of the company’s purpose of providing high quality care to the patients in the communities that they serve. In some instances, patients paid a very high price. 

If you need details, google Tenet’s issues in Redding, California. Nurses at the facility eventually “blew the whistle” but given the company’s focus on financial operations, others likely new something was wrong but they didn’t have the courage to question the physician or Administrators involved.

Cases like Redding create trust issues with payers, partners, employees and healthcare consumers. The company pays a hefty price for years even when corrective actions are taken.

The question that remains to be answered, is it worth it?

CVS

Did you know that CVS stopped selling tobacco products in all of the company’s pharmacies in 2014? Despite the loss of $2 Billion in annual sales, executives decided it was the right thing to do. 

The company couldn’t be an authentic partner to healthcare providers when they were selling a product known to create significant health issues. They put their mission ahead of their financial gain.

Reportedly, the company didn’t suffer because they were able to replace the revenue stream with new and enhanced services that better aligned with their core mission. Apparently, people in communities with a CVS have changed their tobacco consumption habits as a result – not their purchasing habits.

Other pharmacy companies have continued selling tobacco and claiming they are complying with all laws and regulations. Those companies continue to profit from the sale of tobacco and people continue to smoke.

Is compliance enough when we already know the negative impact to the consumer?

Values

Your answers will reflect your belief and values. For companies, the answers need to reflect how they operate in order to operate authentically and to attract the employees, partners and others that align with their beliefs and values.

Default to truth

Why do we default to truth when someone is lying? Most people default to truth until their doubt and the facts tell them otherwise. 

My default belief has been set using the 80/20 rule. 80% of people tell the truth and do the right thing. Based on Talking with Strangers by Malcolm Gladwell, it’s a reasonable starting point.

However, I was in a meeting with healthcare executives when the physician founder challenged my belief. He believed only 20% of people do the right thing and that most will act in their own self interest. 

Work vs. Life

So which is it? It’s something that I’ve been rumbling with since that meeting. Let me start this discussion by sharing some additional input from colleagues that will help you understand why.

The Director of Health and Safety for a large employer organization believes 60% of physicians fudge the facts to turn medical claims into worker’s comp claims to get higher reimbursement [aka: payment].

A Finance Executive in private equity shared that he believes everyone seeking financing from them is lying. The only way they get to the truth is doing careful due diligence even if the company has been audited. They don’t put much faith in auditors either.

What I learned is that context matters. These people don’t believe everyone is lying all the time but in a professional context [and more specifically when money is involved] their default level of trust is lower. Whether it’s experience that has raised their level of doubt or use of data, they have learned to verify the facts rather than trust what people say.

Life

In the broader context of life, we don’t always have data readily available to tell us whether or not someone is lying or telling the truth. 

No one is good at spotting a liar. Looking someone in the eyes, reading their body language or talking to them doesn’t make you a good judge of truth. In fact, these attempts to discern truth blur whatever facts are available and consequently, rarely result in the right answer.

We have to believe people are generally good even if they tell a lie or two. Society wouldn’t function if we didn’t.

However, when we have doubt, we need to look to the data and trust the facts so that our feelings and biases don’t blur our judgement.

As with any Malcom Gladwell book, Talking with Strangers is brimming with great stories – and yes facts. 

#metoo

Talking with Strangers includes several stories about rape and why it’s hard for people to discern the facts in legal cases. The stories clarify the laws in each case, highlight the added issues if someone is intoxicated and discusses what constitutes consent.

Post #metoo everyone should have a clear understanding of these cases to help guide their behavior and to judge the facts. It’s worth your time to read the book.

Engineering vs. Design

What’s the difference? 

Both engineering and design start with a problem but the approach to solving the problem is different. 

Engineering is about distilling data and allowing the data to dictate the solution. The problem with an engineering only approach is that there is usually more than one way to solve the problem. Hence the need for design and design thinking.

Design thinking uses brainstorming to surface all the different ideas, rapid prototyping to test the more viable ideas and iteration to apply the lessons from the prototypes.

Design often gets stifled in the healthcare industry. From my experience there are two reasons:

1/ The situation has become dire and something needs to be done quickly.

2/ The executive team is committed to one management philosophy that leaves little room for creativity.

Getting painted into a corner is never good place to start. So how do you get out of it?

Data

Everyone needs quality data to make sounds decisions whether in a clinical or business role. When the data is bad, we end up wasting resources solving problems that don’t exist and overlooking the real issues.

Did you know that only 30% of the analytic results in healthcare organizations are accurate? 

It was one of the stats that I learned from Health Catalyst recently and based on my own experience seems about right.

Part of the issue is the old adage “Garbage In/Garbage Out” and the other part is a lack of consistency in defining and extracting the data elements. 

Good design makes data capture as painless as possible and helps to standardize the dataset to make the data meaningful, actionable and readily accessible to all users. 

Start with why

Lean is good but can be limiting without design thinking. There isn’t much difference between Just In Time inventory and Kanban. Yet when one fails, we try the other without giving enough thought to why.

Just in time inventory in healthcare has never worked all that well because it’s too complex for the endusers to maintain. Implementing Kanban with a client made me realize that the system wasn’t going to work much better if at all for the same reasons.

The user’s needs were never really considered in how the system was implemented and once the implementation was started there was no iteration to refine it. Sound familiar? 

Just in Time inventory and Kanban are good frameworks but there is no one size fits all solution. Design thinking is about considering all the issues underlying the problem, the stakeholders and the patients served to solve the problem.

Evolution vs. Revolution

We’re getting more insight into as to where political and business leaders are looking for ideas to help lower the cost of healthcare in the US. 

LA Care came up this week because it’s a public option currently available on the California exchange that competes for members with insurers offering plans in the same service areas. It is operating similarly to how a Medicare public option would be expected to operate. 

Many leaders see LA Care as evolutionary because since inception the plan has been slowly improving the health and welfare of their members and reducing the cost of healthcare. The biggest issue that remains is healthcare reimbursement.

LA Care utilizes county resources as well as physicians and other healthcare providers contracted with commercial payers. Consequently, the plan hasn’t been able to lower their contracted rates and cost of healthcare enough to make their model truly transformative.

The Medicare public option could be revolutionary but it is unlikely to get industry support given that many of the largest healthcare companies are publicly traded and have a financial responsibility to their shareholders.

Change is going to happen whether you want it or not.

~Ed Catmull, Co-Founder of Pixar

A Radical Challenge

If you subscribe to the Weekly Rush then you know, I have been reading Creativity Inc lately. One of the stories that the author Ed Catmull shares in the book is about giving his creatives at Pixar a radical challenge to lower the cost of their production. No easy task given the talent and complexity of the processes involved.

Ed was surprised by the positive response to the challenge. Reportedly, his creatives took it on and took the challenge to a whole new level once they understood how they fit into the bigger picture.

60% of Americans don’t necessarily want a single payer system but they want to pay less for their healthcare. Rather than fighting against the use of Medicare rates, as an industry we should embrace it as our radical challenge to lower the cost of healthcare.

The opportunity to address a problem is often missed because we don’t get to the root cause and understand all the implications to fix it. Instead we often layer on more solutions and consequently, more cost.

Vendors don’t help matters because they don’t want to address staff reductions as a benefit of their solution. It’s a sensitive issue and often a roadblock to closing a sale.

To embrace the challenge, we need to need to look at everything we do with a fresh lens and question:

  • Does the task still need to be done?
  • Does the process/system work well? If not, what’s the problem?
  • What needs to change or what could be changed to fix the problem or streamline the process to make the task even easier?
  • Could a vendor change the user interface or packaging to make the process easier?
  • If you eliminate the task or make a process easier, how do existing resources get redeployed?
  • What is the impact on total cost and revenue?

If you’re saying there is no way to reduce cost and make money if you only receive Medicare rates. Ask yourself why not? Make a list of all your reasons and challenge every single one.

It’s not about just improving what we do now. Constraints challenge people to think about what they are doing and to create better ways to do it.

Stand Up?

Should you take a stand on important issues?

It’s something many leaders are rubbling with right now.  Eric Topol MD wrote an article for the New Yorker recently about the potential for a new doctors’ organization that would enable physicians to take a stand on important issues affecting the health and wellbeing of Americans. Issues such as vaccines, drug pricing, climate change, stem cell clinics and false health claims spread by celebrities involved in lifestyle medicine businesses. 

In the article, he noted several female physician leaders who took on the NRA and claimed the lack of adequate gun control regulations not only as their lane but as their highway. What gave them the courage to stand up to the NRA?

Dr. Topol hypothesized that their courage was attributable to dealing with long-standing gender inequities in medicine. Possibly but it likely has more to do with their values and their frustration with the lack of change. 

Organizing to take a stand on important issues is commendable but also challenging. The values and interests of the group need to align for the group to have a powerful voice.

Whether physicians organize or not, they should be encouraged to bring their whole self to work as employees in leading edge companies do and to speak out on issues affecting the health and wellbeing of Americans. Otherwise, how can doctors be held accountable for the cost of healthcare if they can’t speak out on the biggest drivers of cost?

Daring leaders who live into their values are never silent about hard things.~ Brené Brown

Valeant

There is a good documentary called the Drug Short that tells the story of Valeant to explain the problem with drug pricing in the US.

Valeant reportedly operated more like a hedge fund than a pharmaceutical company. The model was pretty simple:

1/ Buy companies that have a drug with a monopoly.

2/ Strip out the R+D so that the typical 18% spent on R+D goes to the bottom line.

3/ Raise prices on existing drugs.

The problem is that many of the drugs were life sustaining drugs for people in middle America who couldn’t afford to pay for them.

The company took extraordinary measures to bilk insurance companies for payment. To keep patients quiet about the issue, they provided just enough financial support to them through their advocacy efforts. 

Hillary Clinton started tweeting and talking about the issue during her campaign. Investors and board members could have looked into it and taken action, but they didn’t. They were reportedly paid large sums to look the other way. The company’s stock eventually tanked.

The returns on biotech companies now are largely due to price increases. The company’s can’t afford to lower their prices and profits. So nothing has changed yet.

Change in 2020 is likely because even though the pricing strategy is not illegal, many leaders feel that it is morally wrong.

Focus on Why

Do you know why your company exists?

If you answer is something like to provide high quality medical services or to provide a specific type of solution to the healthcare industry, you’re telling me about your company’s what – not the why. 

The why is the reason the company was founded and continues to exists. The why embodies the company’s beliefs about those that it serves and reflects the values that guide how the company operates. 

One Medical

I reviewed an investor report on One Medical recently that had this really wordy description of why the company exists. It made me wonder whether the company is loosing touch with their why [a common problem as companies grow] or if the why was just lost in translation.

However, most people are familiar with the company so it seemed like a good example to explain the differences between why – what – how and the value of focusing on why.

Early success:

1/ Why: The founder, Tom Lee MD believed waiting 29 days [the average wait time in the US] to see a primary care physician was unacceptable. So the company’s core belief is timely service is most important to their customers and members.

2/ What: One Medical found customers willing to pay a premium for on demand access to care. Employers and those without an established relationship with a primary care physician were willing to pay the premium. 

3/ How: The company solved the wait problem by incorporating nurse practitioners and technology into their service so that most if not all of their members are seen within 24-48 hours of scheduling an appointment. They also increased the length of the appointment to minimize the risk of wait times on the date of service.

Growth + Profitability:

The why has defined the company and is the reason existing customers and members value the company. As the company enters new markets and partnerships, the management needs to consider:

1/ Do other populations value timely access to care as much and are they willing to pay a premium for it? 

2/ Are they able to modify the how without sacrificing the why to achieve long term growth and profitability?

It will be interesting to see how the next chapter turns out.

Living your Values

If you’re thinking which values are you referring to – personal or company values? I’m actually referring to both because there should alignment in your personal and professional life.

If you need to google your company values or call human resources, chances are your company’s values have not been operationalized. Only 10% of companies have a short list of memorable values that they’ve associated with behaviors to reinforce their values.

Salesforce has done a good job of honing the values list to four [4] values and associating behaviors with each value. It’s how they are able to walk their talk in everything they do despite being a very large company.

Whittling down the values list from 100+ takes some time and careful thought. Most companies have a list of 10-15 values but within that shortlist there are usually 2-4 that encompass the company’s core beliefs. 

Operationalizing values is a process of linking values to behaviors so that people understand what’s an acceptable behavior as well as what’s not an acceptable behavior. Providing three [3] examples of each type of behavior is usually enough.

Once the values are operationalized, the company culture will develop to support and enforce those values.

If you’re questioning whether or not it’s worth your time, think about how much easier it will be for everyone in your organization to:

1/ Hire the right people 

2/ Manage customer relationships 

3/ Work collaboratively with people throughout the organization

4/ Make good decisions for the company

Defining and operationalizing your values is not something you want to put off until you’re the size of Salesforce. There are a lot of steps in the journey to realize that level of success. That’s why I think of it as one of those “the sooner the better” activities.

“Daring leaders who live into their values are never silent about hard things.” ~ Brené Brown

Our Values

I’ve been working on refining the values for Rush360 too.

Innovation is the heart of what we do. There are 4 steps in our process [Learn, Engage, Design and Transform].

So I started with the steps and thought about the values we need to have in order to do those things well and support the people on our team.

These are the four values that resonated the most with what we do and why:

1/ Courage: It takes a lot of courage to step into a new environment and to get up to speed quickly especially when people see you as a change agent.

2/ Open: It takes an open mindset to be constantly working with new people, new process, new system and in new environments.

3/ Creativity: We get the benefit of having a fresh perspective on the problem but it takes a lot of creative energy to work with all the stakeholders and to design a solution that works for them now and in the future.

4/ Innovation: It takes someone who loves to innovate because the stakes are high and the risk of failure is real. Failure on any scale is disappointing and tough on the ego.

That leads me to balance. I think everything in life – from our bodies to our businesses – needs balance. In Dare to Lead, Brene talks about daring leaders having a strong back and a soft front. It seemed like a good framework to test the balance of our values… it takes a strong back [courage and love for innovation] and a soft front [open and creative mindset].