As in many things, the line between success and failure can be fairly narrow. As I read the article about the healthcare system, I started wondering how this particular organization, like so many others, can go through so many iterations of a turnaround effort that ends unsuccessfully. In this brief article, I want to highlight why some organizations may be successful in their financial turnaround efforts, and others seem doomed from the beginning.
First, let’s look at what the leadership that gets it right does. The first thing they do is “own the situation.” Acknowledging that the ultimate accountability for the organization’s situation rest with them. Next, they have discussions, many times difficult discussions, with key stakeholders within, and eventually outside, of the organization, on the state of the organization and the path forward. Then they use accountability and sense urgency as the mantra for leading the team and moving the organization through the transition and transformation process. And last, in this abbreviated layout, leaders develop an achievable Financial Turnaround Framework and Plan that includes:
– A clear understanding of the current situation;
– The commitment and support of as many key stakeholders as possible;
– The creation of a burning platform (hence, sense of urgency);
– Mutually agreed-upon financial and nonfinancial targets; and
– Mutually agreed-upon expectations, goals, objectives, key performance indicators, and
key result areas.
Now, let’s take a look at the de-railers. It can be argued, counterintuitively, that all the de-railed organizations have to do is do what the successful ones do. While this may be true. It’s easier said than done.
Leaders and organizations that are unsuccessful in executing turnarounds tend to demonstrate personal or organizational qualities that, from the beginning, make it difficult to succeed. These qualities are called de-railers. De-railers are events or attitudes that can cause individuals or organizations to go off track. De-railers can exist at the individual level and organizational level. Even the organizational de-railers are often a result of some individual’s shortcomings that have permeated the organization’s culture.
The following are some common personal and organizational de-railers I have encountered over the years working with financially distressed organizations. They are not listed in any order of priority.
An individual can de-rail a turnaround by demonstrating any of the following attitudes and behaviors:
– Bad attitude or arrogance
– Lack of knowledge or talent
– Fear of job loss
– Inability to make the case (buy-in) and rally the troops
– Lack of credibility
– Inability to move outside of one’s comfort zone
– Lack of willingness to make difficult decisions
A turnaround can also be de-railed at the organizational level in the following ways:
– Poorly conceived turnaround plan
– Poor execution of the turnaround plan
– No sense of urgency
– Denial of or resistance to change
– Nonalignment of leadership
– Lack of knowledge and talent on multiple levels
– Failure to overcome deep-seated politics
– Long-standing yet counterproductive relationships
– Lack of credible and useful information and data.
In summary, being honest with yourself, about your self, and about the situation at hand is a great first step at avoiding de-railers in a turnaround situation.
(I speak at later date on “The Leader’s Mindset in a Financial Turnaround.”)
Tony Jones is President & CEO of Alliance Health Partners, a hospital management company specializing in the development and creation of well-run institutions. He has 30 years of hospital and healthcare management experience spanning multiple organizations, including in the CEO and COO role. Tony has successfully led numerous financial turnarounds of hospitals in financial distress, including most recently in California and New York. Author of bestseller, “Leading a Successful Hospital: A Practical Guide, ” he conducts a national seminar on “Leading Successful Hospital Turnarounds.”
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
