The healthcare CEO gets a new job. by Michael Main, Jonathan Weiss and Stacy Blanchard
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1 The healthcare CEO gets a new job by Michael Main, Jonathan Weiss and Stacy Blanchard
2 We want 100 percent of what we do to be 100 percent different five years from today. Healthcare CEO study participant Fifty major US health system CEOs recently described for Accenture Strategy their vision for the future of healthcare and how their systems are changing because of it. 1 Notes one executive, In the future, there will be no such thing as payer or provider but rather a hybrid of the two. Healthcare business models are being reorganized around risk-based reimbursement, as well as clinical and technological innovation, with the consumer at the epicenter. Regulation, technology, demographics and underlying economics are fueling a contemporary industrial revolution. In a healthcare industry undergoing foundational transformation, CEOs and leadership teams are challenged like no other time in their careers. Eighty-two percent of healthcare executives agree that their organizations are being increasingly pressed to reinvent themselves before they are disrupted. 2 Boards will evaluate CEO performance on the basis of membership, market share, share of wallet and consumer lifetime value. CEO and leadership responsibilities, competencies, challenges and opportunities will be different from today s norm as a result. Welcome to your new job. 2 The healthcare CEO gets a new job
3 You say you want a revolution? My board and I agree, it is too much to ask for a CEO to lead both the system and transformation. Healthcare CEO study participant Fundamental to the CEO s successful leadership will be the creation of an organizational- and communitybased ecosystem in which healthcare transformation can occur. CEOs, with their leadership teams, will set the organizational purpose and North Star guiding and driving change. CEOs alone, however, will not be capable of fully shaping the dramatic industry reconstruction at their doorstep. They must redefine their jobs and enable others as engaged collaborators. Inaction is not an option. Day-to-day operational leadership must shift to the leaders running daily operations so the CEO can focus on facilitating change. He or she needs to build traditional and nontraditional partnerships with other healthcare systems, other players/participants across the full continuum of care, as well as public health agencies, schools, business leaders and payers. 3 The healthcare CEO gets a new job 3
4 The CEO will need new talent along a broader span of control. Chief Experience Officers, Technology Officers, Transformation Officers and Population Health Officers will be added as CEO direct reports. Creating forwardlooking organizational competencies while reshaping culture, relationships and governance models will be central to leadership s shift in focus. Change is hard. Organizational inertia is a powerful force, reinforced by bureaucracy, organizational silos and other impediments to change. For true organizational reinvention, change must radiate from the center with the CEO acting as catalyst for well-informed and well-equipped business unit leaders. 3 It is the CEO s job, with leadership, to break down barriers and remain true to their North Star. Transformation is also expensive and funding it can challenge the most efficiently run organizations. Ironically, the most financially sound health systems are best positioned to transform, yet that organizational and financial discipline can be transformation s Achilles heel. Success built on yesterday s model can lead to risk aversion. Great leadership teams need to find the next operating paradigm. 4 The healthcare CEO gets a new job
5 Be a transformational yogi My number one concern is managing the pace of migration from fee-for-service to fee-for-value while investing heavily in our transformational future. Healthcare CEO study participant Enabling rapid innovation and agile execution while keeping day-to-day operations running smoothly can stretch even the most resilient leader. But, the market makers show us it can be done. These transformational yogis have a following that shares the organization s passion and mission. A true yogi replaces traditional processes with more agile approaches, embraces big data, champions new outside in thinking and challenges the status quo. They invest in venture funds, create trials for proof of concept and scale successes to build organizational muscle for future change. 5 The healthcare CEO gets a new job 5
6 In addition to expanding their ecosystems with digital consumer engagement and companies bringing innovative technologies (see sidebar), leading hospitals are embracing nontraditional aspects of the care continuum such as partnerships with public health agencies, social workers and school nurses. Insightful leaders know that their acute care influence is limited and managing this population s health requires significant new thought. The new breed of healthcare emphasizes families and social networks to help keep consumers healthy and manage chronic conditions. Behavioral economists can help leaders understand complex dynamics around personal change. As ecosystem partners help leaders achieve the organizational mission, they also add complexity because processes and communication now extend beyond traditional partnerships. To counteract complexity and provide the agility necessary in an extended network, health CEOs are embracing real-time information to support faster decision making and enable immediate course corrections. Shared data, electronic medical records and decision support tools are critical to managing toward successful outcomes. Together, enabled by digital technologies and next generation management tools, the ecosystem s constituents are positioned to reinvent healthcare in their markets. Healthcare systems and venture capital-backed startups find their symbiotic relationship Health system executives know that starting new ventures can be cumbersome, particularly those involving breakthrough innovations. Rather than investing in their own offshoots, they now invest in external startups, with healthcare technology companies at the epicenter. Health system funds take investment positions in startups, providing expertise and advice to help bring them to market. The venture capitalists get the proof of concept they need to drive scale and legitimacy. The health systems get diversified investment income and create additional seeds for change within their own systems. 6 The healthcare CEO gets a new job 6
7 Starting lineup gets supersized Talent management and having the right skills in the C-suite are among my top concerns. Healthcare CEO survey participant When an industry changes this drastically, leadership rosters must change. One CEO noted: Succession has fundamentally changed here at my system. I no longer look to the thirty-year hospital administrator as my most likely successor. Rather, I am looking outside of provider and possibly the industry for the healthcare CEO of the future. Ninety-four percent of healthcare provider CEOs agree that the future of healthcare will require new talent strategies. 4 Consumerism, risk, digital technologies, wholly new demographic characteristics and new operating models demand new talent. Providers now must expand their teams with skills not historically found in healthcare organizations. Nearly three-quarters of the CEOs interviewed indicate they have talent gaps. 5 While traditional roles are needed to continue to operate existing business lines, leadership teams are exploring new roles. 7 The healthcare CEO gets a new job 7
8 New roles for the leadership team Chief Experience Officer (or Chief Consumer Officer) Fundamentally flips the business model to focus on the consumer, not the physician or hospital. Generally filled with outside talent from consumer-centric industries such as retail and financial services. Chief Innovation Officer Drives areas such as clinical innovation and venture capital strategies. Background in a test-and-learn culture, particularly in the start-up arena, can be advantageous. This individual helps separate science from science fiction, helping teams to see the art of the possible. Chief Digital Officer Navigates the tsunami of technology to implement new systems that allow better consumer connections and innovative care. Transformation Officer Architect and drives the change agenda, marrying strategy and agility for new results. Usually comes from an organization change management background. Look for an individual who has focused on business and/or culture transformation at a company known for constant reinvention (e.g., entertainment or consumer product companies). Population Health Officer Oversees an organization s payer/risk strategies with a growth agenda in mind and is capable of understanding if, where and how payer disintermediation might occur. 8 The healthcare CEO gets a new job 8
9 Success depends on blending these new sets of skills together with the old to drive better decisionmaking, execution and innovation. What might feel like a team of rivals will need to celebrate their differences and remain ruthlessly focused on their North Star to achieve any hope of successful transformation. 9 The healthcare CEO gets a new job
10 Accelerating the transformation We are on the right path, but at the end of the day, we are not doing nearly enough or moving at the pace that we need to. Healthcare CEO study participant Whether you are a new healthcare CEO or a seasoned industry executive who is reinventing your role, your job is to create the ecosystem for change. Organizational metamorphosis happens while running two business models simultaneously until a tipping point, at which time there will be no turning back. There is an urgent need to move quickly, as the journey is a demanding one. Many health system CEOs in our study, who were in the thick of it during an active transformation, stressed that slow adopters will regret not being more assertive and progressive in their actions. Their belief is supported by Accenture Strategy research that finds high performing organizations experience percent more change, and at a faster rate, than low performers The healthcare CEO gets a new job
11 The revolution begins with you. Test your readiness for change with these simple questions: Creating fitness for change Is the organization s vision and purpose clear? Has true executive alignment been achieved? Is the leadership agenda well defined and is accountability articulated throughout the organization? Has culture been reset to enable the change? Evolving the ecosystem As the CEO, have you created the bandwidth and skill to help the ecosystem change? Are you comprehensively operating across the ecosystem to create the right health system engagement? Who are your non-traditional partners? Has leadership aligned around near- and longer-term metrics as indicators of success? Building agility muscle Have processes been adequately adapted to exploit digital potential? Are investments in technologies to speed experimentation and decision-making sufficient? What steps has the organization taken to put the consumer at the center? Are investments properly aligned and prioritized to maximize ROI, taking into account all contingencies? Reformulating the skills agenda Have leadership team skills been rebalanced and cascaded through the organization? Has the organization developed, hired or partnered for mission-critical capabilities with key competencies as called for by leading systems across the country? How has the use of big data been deployed in decision-making? In what way has governance morphed to keep pace? 11 The healthcare CEO gets a new job
12 Join Contact the authors Michael Main Jonathan Weiss Stacy Blanchard Notes 1 The 2015 Accenture Strategy transformational provider CEO study comprised interviews with the CEOs of 50 major US health systems. These executives spent time with Accenture Strategy describing their vision for the future of healthcare and how their systems are responding. 2 Accenture Technology Vision study, Memo to the C-suite: You are not the main driver of change, Accenture Strategy, About Accenture Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 375,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at About Accenture Strategy Accenture Strategy operates at the intersection of business and technology. We bring together our capabilities in business, technology, operations and function strategy to help our clients envision and execute industry-specific strategies that support enterprise wide transformation. Our focus on issues related to digital disruption, competitiveness, global operating models, talent and leadership help drive both efficiencies and growth. For more information, or visit 4 Accenture, Transformational Provider CEO Study, Ibid 6 Turning change upside down: How new insights are changing old assumptions, Accenture Strategy, Copyright 2016 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks
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