The End of Management (as We Know It Today)

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By James Sutton, CRA, FAHRA

May 2011–Corporations have served healthcare well. They have shown us methods of organizing people and given us the ability to allocate resources. But in recent years, most of the stories we’ve heard have been of managers waging war against corporations, not for them. In this age of instant communications, the present corporate structure is too cumbersome, laborious, and ineffective to make good decisions. As such, corporations have become bureaucratic and the managers bureaucrats. Healthcare has spawned increasingly larger organizations (regardless of whether they explicitly refer to themselves as corporations). The better run corporations are not immune to rapid change and spontaneity, allowing instant decisions that can influence them in a positive direction, but these are fewer and farther between. Not only do our bureaucratic healthcare organizations miss the majority of opportunities presented to them, but they increase their own cost of doing business by their inefficiencies.

Just by reading Clayton Christensen’s The Innovator’s Dilemma, one can get a flavor for the current speed and need for quick decisions necessary to ensure positive outcomes for corporations. “If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies’ problems—planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem.”1 Christensen posits that a corporation’s potential rests on two components: its processes and its values. Processes refer to the methods by which people transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value. Values are defined as criteria used by managers and employees when making prioritization decisions. However, while people are flexible and can be trained to succeed at many different things, processes and values are stringent and rigid. “Similarly, values that cause employees to prioritize projects to develop high-margin products cannot simultaneously accord priority to low margin products. The very processes and values that constitute an organization’s capabilities in one context define its disabilities in another context.”1 For example, a process that is effective at managing the design of a minicomputer would be ineffective at managing the design of a desktop personal computer.

But as a result of the slow bureaucratic nature of today’s corporations, “people networks” are growing and detaching themselves from the clutches of corporations. “Corporations come and go in people’s lives much more fleetingly—they are no longer givens, but variables. This is true for people as employees, but also as shareholders (think stock ownership turnover) and people as customers (think ubiquitous branding, private labeling and brand piracy).”2 The days of 30-year employees are now the exception, not the norm. (Ask your HR representative what the average length of stay is for employees in your department.) As recently as 20-25 years ago, there were relative few brands of major appliances, TVs, etc. Today there are many players from which to choose. There is little brand loyalty; you buy what you think is cost effective for you. “If you want to know the theme of the Consumer Electronics Show, play taps. Fly the flag at half-mast, and say a few words for the proud monolithic corporation of years past.”3

This increasing divide between the populace and corporations is beginning to have a subtle effect on the very ways in which we think about business—our framework of strategy, organization, and leadership. The challenge will be to reframe them around the new small units of business and individuals.

What will the new organization look like?  The new model will have to be more market driven, employee driven, and less management driven, with a great deal more collaboration among all employees. It is at the employee level that we can truly make the decisions necessary to provide quality care. We are now seeing the beginning of this early decision-making at the lowest levels: eg, in order to receive reimbursement and provide information pertinent to the examination being performed, the decision to proceed now is the purview of the technologist. The ordering physician may not have provided a satisfactory reason for performing that examination, thus negating the examination until a sufficient reason is provided.

Historically, healthcare has been very conservative and slow to react to new and different methods. My prediction is that the economic result of this traditional resistance to change will force healthcare organizations to change or they will cease to exist. To me this has no political affiliations; it will be all about economics. America is now struggling under a massive amount of debt. There is talk in Congress almost every day of ways to reduce the debt. No one knows what will happen with the current Healthcare Reform. It does seem apparent to me that there will be significant reductions for the healthcare industry in the near future to ensure the survival of our nation.

Like most people, I prefer the comfort of not having to change. We all like the familiar. That said, can we make the transition from manager to be more like a facilitator, in the face of this paradigm shift away from the corporation?  I believe that this will lead to a new sort of position: the “fac-man” (facilitator/manager).  There will be many new words and methods to be invented and taught. But I believe that there are enough good people in AHRA that, if we act quickly, we can face this change and anything else that comes our way.

References
1 Christenson C. The Innovator’s Dilemma. Boston, MA: Harvard Business Press; 1997.

2 Green CH. The Death of Corporations. TrustedAdvisor.com. January 2002. Available at: http://trustedadvisor.com/articles/the-death-of-corporations. Accessed July 30, 2010.

3 Richtel M. Death of the Corporation. NYTimes.com. January 8, 2008. Available at: http://bits.blogs.nytimes.com/2008/01/08/death-of-the-corporation/. Accessed July 30, 2010.


James Sutton, CRA, FAHRA lives in Longview, TX and current serves on AHRA’s Web Development Committee. He can be reached at suttonjw@cablelynx.com.

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