For instance, says Bauer, "we can look not more than a decade ahead and see a far more cost effective way to provide healthcare one-third less expensively. That leads us to consider alternative ways to provide it."
Ambiguity exists, so effective executives need ways to assign probabilities. That way, executives can seek out strategies to increase the probabilities they desire and decrease the ones they don't.
Fine, so leaders should think differently about how they gauge strategic initiatives in order to better predict how they will affect the organization, or indeed, whether to do them at all. But how does this philosophy translate into the real world of deciding where to invest your precious capital and labor?
Bauer says that in conversations with health system CEOs following his speeches, they do recognize the need to evaluate the future better. They want to target initiatives that will likely be successful under a new payment and quality dynamic in healthcare, but they aren't sure how to begin to evaluate things differently because their lieutenants are used to predictive modeling.
Courage to Change
Few CEOs have the courage to change for a variety of reasons, he says. There are rigidities in practices that are tough to break, there's an unwillingness to take on the medical staff, there's a familiarity to doing battle with insurance companies rather seeing those negotiations as an opportunity to do business, and a substantial percentage of top leaders are "just cruising toward retirement," he says.
But breaking down those walls is exactly where the opportunity exists, Bauer argues.