Forget Predictive Modeling, Try Leadership Forecasting
'Don't Give Me Numbers'
Boiled down to its basics, Bauer's focus on forecasting over prediction means that CEOs should "quit assuming numbers will tell you anything," Bauer says.
Operationally, they should ask their other chiefs for the probabilities of success given several directions the organization could go to better achieve vertical integration. They should assign a likelihood of success to each of those options, and try to think of solutions to reduce the undesirable probabilities and increase the desirable ones.
Leaders need to develop scenarios to get the organization where it wants to be broadly. Defining that is the CEOs job. It's also the CEO's job to order his or her lieutenants to quit spending so much time analyzing numbers that are misleading.
"Don't give me numbers and spreadsheets," Bauer says, describing what he would like CEOs to tell their deputies. "I want thought, focus on the realm of possibilities, and how we can work with partners to come up with different and better outcomes. You won't get that through extrapolation of old data."
While adhering strictly to his reliance on forecasting versus predicting as a better tool for hospital and health system leaders, pressed for a prediction of his own should they not embrace the principles of forecasting, Bauer relents, a little.
"My current prediction for the future of healthcare is pretty dismal," he says. "I predict 35% of the organizations in healthcare today will not be in business two to five years from now because they want to hold on to a totally irrelevant 20th century health system."
Philip Betbeze is senior leadership editor with HealthLeaders Media.
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