Can I Have a Do Over?
Knox says Bellin Health has five strategies that align with its mission and vision, and all five compete for the same resource pool. Even though the organization focuses some energy in each of the five categories, how much it allocates relies on a very high-level discussion. "We make some strategic decision about where we are as an organization, how we want to position ourselves, and where we need to focus energy," he says. "It is a very deliberate prioritization and allocation process."
Based on its findings, the McKinsey report offered three best practices organizations can use to improve their decision making.
- Define the risk. Organizations should examine decisions through a detailed financial model that compares those risks to the risks of other projects in the organization's portfolio. Looking back and learning from past situations that are comparable is also advised.
- Discussion is key. The report found that decisions initiated and approved by the same person generated the worst financial results. There was also a strong correlation linking financial success with clarity about who is responsible for the project and the involvement of that individual in the decision-making process. Other participants in the discussion should be included based on skills and experience, and that decision criteria should be transparent. Lastly, the decision should be discussed in relation to other strategic initiatives.
- The organization should come first. Organizational goals should be placed above the business goals of individual units. Leaders should spend time building consensus among the different units of the organization.
There are many external factors that healthcare CEOs can't control, like government reimbursement, the new administration's policies, and the speed of the economy's recovery. But CEOs can ensure that all decisions have the proper analysis, resource allocation, management oversight, and strategic alignment with the organization as a whole.
Having those tools in place can help CEOs avoid the fallout of a poor decision—and the sting of regret.
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at firstname.lastname@example.org.
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