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Service Line Management: Three Principles That Separate the Winners from the Losers

Keith T. Pryor, for HealthLeaders News, November 21, 2008

If you were in business school during the 1970s, you were likely a disciple of one of the hottest management trends of that era—product line marketing. Proctor & Gamble and General Electric led the way, sharing the wisdom of thinking from the customer's perspective and organizing the business accordingly. Graduates of leading MBA programs soon began to covet assistant brand manager jobs, hoping they would lead to executive positions where they would orchestrate the work of sales, manufacturing, and other functional areas to meet the needs of their clients. Brand leadership soon reigned supreme within our most respected corporations.

If you studied healthcare management a bit later, say the early to mid-1980s, you were likely captivated by the notion of service line management, healthcare's counterpart to product line thinking. It hardly seemed like a big leap. By then, product line thinking was no longer unique; it was ubiquitous. It worked. The logic behind healthcare service lines was similar and compelling.

That was 25 years ago, and healthcare still struggles with service lines. A few hospitals and health systems have made the conversion with aplomb and it is evident to many of their consumers that these hospitals think differently. Yet, some healthcare leaders still wonder if it is a good idea. Most are somewhere in the middle—tried it and failed or are still trying it.

Are we that different from other sectors? Is service line thinking such a complicated idea? In some ways yes, but probably not to the degree we often like to think. And as with most practices that don't work out over a long period of time but remain compelling, what separates the winners from the losers is less a matter of sophistication and smarts, and more often a matter of commitment to key principles.

In the case of service lines, those key principles are skillful leadership, clear goals and accountability, and results measurement. These are the areas where we get stuck.

Skillful leadership

It isn't difficult to imagine that when a company undergoes a transformation from being functionally led (i.e., manufacturing or sales) to being product line led, strong leadership would be required to overcome years, if not decades, of a hidebound leadership model that is threatened by the new direction.

So, let's imagine that this has happened in a hypothetical consumer products company, where the leading soap powder is called Brand X. We would be surprised if Brand X's new product line leadership was, in effect, a committee with representatives from manufacturing, sales, and other disciplines leading the charge and working in a way that seemed more like a task force than an executive team.

Alternatively, we would also be surprised if a single executive—right out of graduate school—asked to take on this demanding product line role, facing down veterans in manufacturing and "sharp as a tack" sales representatives.

But somehow, in healthcare, that has all too often been our approach—triumvirates of physicians, nurses, and administrators, or freshly minted MBA/MHA types. And in a few cases, largely due to CEO backing and/or a supportive culture, these have worked (at least the triumvirate model).

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