AHA Redux:
A Matter of Leadership!

I began my remarks to the American Hospital Association last week with an outline of the situation as I saw it. I called the outline "Principal Management & Leadership (as opposed to Policy) Issues." That is, it was-is my contention that hospital leaders have a choice; they are beset with constraints (aren't we all?), but such constraints do not keep some enlightened folks from performing miracles—management and leadership miracles!

Herewith my outline, also included in the slides attached to my previous post:

1. Should we be doing what we're doing? Will it work? How do we know? [In a surprising # of cases, it's not clear whether "X" or "Y" is the most effective treatment for a particular problem—e.g., my 2005 ablation vs taking a pill. "Evidence-based medicine" and "comparative effectiveness" research, ticketed to receive major federal funding, are part of the answer. And controversy is huge; i.e., who's to judge?]

2. Are we doing what we decide to do safely? [Various studies suggest that in the U.S. there are several hundred thousand preventable hospital deaths per year—again, some of the stats are very controversial.]

3. Do we do too much—are we in the "overuse" category as determined by agreed upon standards-measures? [It is "generally agreed" that perhaps $750 billion is spent annually on unnecessary tests and treatments—a "piecework" ethos, by the procedure payment, is the major culprit.]

4. Are we doing what we're doing effectively? By local standards? By global standards (as determined by "best practices," best hard evidence, and minimal internal variation) in terms of outcome, quality, safety, and cost? Do we aim, for example, to be "top quartile" in terms of measurable outcomes, quality, safety and "bottom quartile" in terms of cost? [This ought to be a "no brainer"—it's not. A revolution is required here—and it has damn little to do with the insurance payment process, though some would disagree.]

5. Is the institution systematically organized to very consistently deliver the goods in a more or less optimal fashion (low variation in outcome)? [There are a thousand experiments in process, but true systemically organized processes with clear measures and accountability are, alas, rare.]

6. Do all the bits talk to-engage-consult "obsessively" with the other bits? Is the delivery of services truly a turnkey team effort? [Cross-functional communication is arguably enterprise issue #1; in healthcare it's about as bad as it gets—the normal problems are compounded by the hospital "class system," with docs at the tippy-top, and no one else even a close second.]

7. Are the patient and the patient's family at the epicenter of the universe? [Bizarrely, the answer is a resounding "no" in 9 cases out of 10.]

8. Is our institution acknowledged as a "best place to work"? [13 of the top 100 places to work in the U.S., per Fortune, are healthcare institutions—i.e., it is possible!!]

9. Do we acknowledge that people issues-capabilities involving the entire staff affect outcomes far more than capital-technology issues? [For lots of reasons, re-imbursement included, many hospitals are "technology crazy"—owning the latest stuff is more important than ascertaining its usefulness.]

10. Is sustained follow-up at least as much a priority as the "event" itself? [Post-op follow-up and chronic-care are both poor cousins in general in the hospital system setting. Again, the payment system is a culprit—but some manage to do it.]

11. Were we/Are we successful in terms of outcome-quality of life-patient satisfaction with the overall "experience"? [This obviously should be the primo concern—for a host of reasons it's not.]

12. Are all connected with all via an effective electronic network that extends from EMR to Social Networking? [Still not the norm!]

13. Do we acknowledge that most of the choices involved in executing items #1 through #12 are mostly within our discretion regardless of the nature of Obamacare? (And that Obamacare or its successor will almost surely eliminate piecework compensation—which drives the immediacy of much of the above.) [Of course, a health bill changes things—but, fact is, if the determination is there, and it is in some instances, a committed leadership team can move miles and miles down the road specified above.]

14. Do we acknowledge that throughout the system there are, today, enormous variations in outcome concerning every one of the above issues—which can mostly (almost entirely?) be explained in terms of institutional leadership effectiveness (vision, will, systems)? [SOME ARE DOING IT DAMN WELL UNDER TODAY'S CONSTRAINTS—AND THEY ARE IN AWFUL SETTINGS AS WELL AS BETTER OFF SETTINGS. "IT" CAN BE DONE—IT IS BEING DONE!]

Health Forum/American Hospital Association

On Thursday I had the great privilege of being a keynote at the Health Forum/AHA conference in my beloved San Francisco—putting "feet on the ground" there always sends my spirits soaring. While the health bill, or the likelihood of something, was on every mind, my job was to talk about leadership, regardless of the shape of any legislation. In fact I obsessed on the idea of "your choice"—the idea that incredible amounts of progress were possible in any case. Proof more or less positive is the variance that exists in the system we have today, in spite of existing ass-backwards incentives that reward "piece work" (pay-per-procedure) rather than outcomes and quality-safety. Organizations like Geisinger in Danville PA, Mayo in Rochester MN, Dartmouth-Hitchcock in Hanover NH, and Griffin in Derby CT do wonders already in terms of quality, safety, minimization of unnecessary tests and procedures, and putting the patient and patient's family first.

My main thrust was "controlling what you can control" and creating an "experimentation machine"-"innovation machine" (and a "culture" that supports it) devoted to "letting 1,000 flowers bloom" as the way forward in creating and designing systems that promote 100% employee involvement, patient-patient family engagement, safety, quality, elimination of variation in outcome, and the like. I avoided my usual hectoring (the nature of the likes of quality-safety is now more or less accepted), and urged "getting on with it" ASAP.

I have rarely felt so engaged and have rarely so enjoyed myself—as to impact, the proof will be in the doing. (Glenn Steele, CEO of Geisinger, was immeasurably helpful—he joins my "hero entrepreneurs" shortlist, next to the likes of Teach For America's Wendy Kopp!)

Attached you'll find my PowerPoint presentation; it's less helpful than usual, since so much of the tone was beyond the slides.

PPT is attached.

Change for Good, or Maybe Not???

The Ernst & Young ITEM Club report, published on 20th July, continues the gloomy economic tone. They forecast that the coming recovery is going to be slow, and painful. It seems we all have several more years of "porridge" ahead of us. What has been playing on my mind is what the legacy of this period will be? I am wondering whether any of the traumas we are going through will result in lasting changes in behaviour?

Consumers are tightening their belts in lots of ways: shopping more scrupulously, cooking more at home, taking up knitting, growing their own vegetables, being more careful of their energy usage, vacationing closer to home ... etc., etc. ... you fill in the gaps. All good eco-friendly stuff, some would say. Speaking personally, I have put off replacing my car for another year, and I'm planning a low-cost holiday in Barcelona this year by renting a small apartment and flying with a budget airline (NOT Ryanair)!

Employers, too, seem to be approaching this recession a bit differently. Many appear to have more of an eye to the impact their actions will have on employee morale than they have in previous recessions. We are seeing innovative ways to reduce employee costs without laying off as many workers as they might have in previous recessions, for example, by offering career breaks on reduced pay, or asking staff to work reduced hours to preserve jobs.

Many of these recession-driven strategies could be seen as positive ways to live our ongoing work and home lives. But, as anyone trying to lose weight or give up smoking will tell you, it's not the initial effort that matters, but whether you can make adaptations to your lifestyle so that you sustain a change for good—what engineers call "permanent set."

Is it too much to hope that some of the better new habits we are forming as consumers and employers will survive the recession? Which recession-driven habits do you hope will stay with us for good, and which will you be glad to leave behind?

The Post-Customer-Service Age

We have entered the post-customer-service age.

This doesn't mean that customer service isn't important. Of course it is. But customer service, like product quality, has become a basic, expected deliverable. Without it, you fail. With it, you are only at parity. Customer service is nothing more than basic business hygiene—the "brushing your teeth" of running a company.

If you try to differentiate your company through customer service, you will, at best, be a "me-too" company. Sure, you might have competitors that provide bad service, but your goal is not to be better than the worst. It is to be unique among the best.

Good customer service can help differentiate you only if it is a gateway to building relationships with customers. Customer relationships differentiate you from the competition in a way that customer service (or products) never can.

Aim high ... beyond customer service.

A.W.L.

That is, Absent With Leave. I'm finishing up a book, due two weeks ago. It's based on, but more than, the Success Tips. Title: The Little Big Things: 179 Ways to Be Excellent, from HarperStudio, due out more or less January 2010. Fact is, writing for me allows ABSOLUTELY NO DISTRACTIONS. (Except for a speech in SF on Thursday.) "Absolutely" means exactly that. I have only so much writing energy—it is the most intense thing I do. If I post, it not only absorbs time, but I get engaged—normally a good thing, in this case, an AWFUL thing. Sorry about that—see you in mid-August, maybe a little before! (And on top of all that, it's summer in VERMONT, the shortest, sweetest, loveliest of times. No excuses needed for being a "summer slacker" in VT!!) (And Susan just broke her leg and will be on crutches for about 6 weeks—you'd know that if you were reading my Tweets; I can occasionally manage 140 characters.)

[Note from Cathy: But the success tips are written already, you say? Not so. Tom wants to look at them again, add, delete, rearrange, edit, emend, clarify, and otherwise put them through a wringer before he'll allow them to be published as a book under his name. And, publishing dates are unpredictable, depending, as they do, on authors. So, we apologize for not announcing sooner why Tom is not blogging much these days. We hope you understand why we held back from saying, "Expect a book from Tom soon."]

Watson's Reminder to Baby Boomers

As a general rule, I try to stay away from using sports stories in my speeches and classroom work. And you won't see a lot of sports talk on this blog. However, I found Tom Watson's performance at the British Open an inspiring example of excellence and ... a reminder to us baby boomers that we can still compete at the highest levels.

Tom isn't as long off the tee as his young opponents. The fescue roughs were probably a bit more troublesome for his 59-year-old body than for the 20-somethings he played along with. His experience, will, and unflappable persistence kept him in front until the very last putt of the scheduled seventy-two holes. Although he lost the playoff to Stewart Cink, Tom's performance was indeed inspiring.

As a member of that demographic, I think about baby boomers in business quite a bit these days. While many of us may have thought about retiring in the near future, it seems to me there is a bit of work to do before we pass the baton. Just like Tom Watson and golf, the game of business has changed for us baby boomers. We came to leadership positions when making things and selling things was the name of the game. Increasingly, we don't make things here in the USA anymore. Knowledge work and exotic financial instruments seem to be the product these days. Our parents left us a fairly robust economy with employment opportunities for everyone who applied themselves. As I write this, my state, Michigan, has a 15.2%(!) unemployment rate. The taxpayers own our largest manufacturer, GM. Self-interest, some would call it greed, still seems to get in the way of the collective effort we need to get out of this mess.

I really hope Tom Watson inspired other baby boomers as well. This is the time we must use our experience, our will, and some unflappable persistence to turn this thing around and get one more win before the end of our careers. Our experience should help us remember it was hard work, real labor, that sustained the economy. Our will should be strengthened by a determination to leave a better economy for our children. And our persistence should help us remember we win this thing shot by shot, never wavering, playing the conditions dealt us, and knowing that we can still win this thing. Tom Watson didn't show up in Scotland to be a ceremonial icon ... he went to win! Thanks Tom! And damn it, I really wished that putt had fallen!

Remembering Walter Cronkite

I remember growing up with Walter Cronkite. My family used to sit and listen attentively to what Mr Cronkite had to say. He was considered the voice of authority in our home. Of all the news reporters that have come and gone over the years, Walter Cronkite's voice is the one I can still hear in my head. I think about Cronkite's brand, and I realize that it was consistent throughout the years. He was known to be honest, straightforward, factual, fair, and credible. I recall him covering President Kennedy's death, Martin Luther King's death, the space shuttle mission, and many other events. You knew that when Cronkite delivered the news, you would get the truth in an unbiased way.

Walter Cronkite's brand was consistent through the years; that's why he became known as "the most trusted man" in America. Cronkite's brand created a loyal following of viewers who will always remember him and his grace under pressure.

And that's the way it is.

All A-Twitter

Tom's made the bold leap into Twitter at last. I think he was waiting for just the right occasion for his first tweet, and he certainly found it. To find out what he's celebrating today, and see what else he finds tweet-worthy, follow him here: @tom_peters.

Cool Friend #140: John Kador

This new Cool Friend interview with John Kador will have you re-examining every apology you’ve ever made or heard. Author of Effective Apology: Mending Fences, Building Bridges, and Restoring Trust, Kador explains the most effective ways to apologize as well as some surprising financial implications. When Tom read the book he was getting the apology message from several quarters, and he declared apologizing to be a core competence for everyone who would be effective at business, so fundamental that he included it in the Success Tips as #155. You can read John Kador's Cool Friends interview, or learn more about apologies at his blog, personal website (www.jkador.com), and book website, (www.EffectiveApology.com). John can also be found on Twitter at Twitter.com/jkador.

You Pay Your Money and You Make Your Choice!

European low fares/no frills airline Ryanair flew 5.8 million passengers in June, up a cool 13% on their June 2008 figures. A stunning performance in what we all hope is the bottom of this miserable recession! Meanwhile "the world's favourite airline" British Airways has struggled to attract 2.9 million passengers in June, down 5% over the same period.

The performance difference between these two benchmark airlines could not be clearer, and yet their media treatment belies this. Ryanair gets regularly pilloried for its relentless efforts to cut its operating costs, simplify its processes, and find novel ways to charge passengers for "extras"—like using the toilet in flight! BA, on the other hand, continues to get a largely sympathetic press as it tries to persuade its staff to take less pay, in one form or another, to offset their declining numbers and mounting losses.

So, which airline is setting the better example of contemporary business excellence? Which is doing the best overall job for its customers? Which of them gives the best indication of the way forward when it comes to leading businesses out of the current economic mire?

For those of you who haven't come across Ryanair yet, live wire CEO Michael O'Leary is certainly no Herb Kelleher and whilst they have copied much of Southwest's original business architecture, the airline has none of Southwest's personality and style and most people agree that their customer experience sucks.

Personally, I hate flying Ryanair. But there are no prizes for guessing with which airline my wife and I have chosen to fly when we go to Spain for our summer holiday in three weeks' time.

Turning the Corner to Where?

Lately I have been hearing a more positive message from executives in their communications to their employees, the business press, and business analysts. Whether the message is the familiar "we've turned the corner" or the milder "the worst is behind us," the intent is to signal that a better tomorrow looms. But does it? And what does it look like?

The question I have been asking my clients now is whether the strategies they put in place to deal with the economic downturn have made their organizations more capable of producing excellence as they move forward? Most respond that the emphasis on lean structure and cost control were necessary adjustments that made their companies "more fit" for the future. Certainly the cost reductions have had a positive impact on margins, but I wonder how long this can be sustained? I suggest that there are a number of areas ripe for scrutiny to determine if they will, in fact, lead the business to a better place once that corner has been turned.

First, the increased scrutiny on spending may have some unintended, and unmeasured, consequences. I wonder about the speed of execution when new checkpoints are added into a process. New layers of managerial waste and delays may eat up the apparent savings in cost reduction in time to market. Also, it may be sending a message to the management that executive leadership has little confidence in their business savvy, undermining their potential contributions. It may be time to loosen up the controls a bit.

Second, I have seen some pretty good talent leave organizations because the new, leaner management structure doesn't seem to have the upward mobility they want. A more fluid project approach to work might be the ticket here. Top talent demands work that matters!

Third, oddly enough, executives may have to prove their competence to the workforce—who paid some prices in the downturn. Many executives have been using the "economy" as the reason for poor performance, but my coffee chats with their employees lead me to believe that the rank and file aren't totally buying that. It is important that the road forward is seen as doable by the employees in an organization, and that these workers believe that the current executive team can lead them to success.

And last, I might suggest that it is a good time to focus a little less energy on Wall Street analysts, and a little more on employees and customers. I continue to marvel at how much executive time is focused on pleasing the analysts. Yes, they need attention paid to them, but long-term success is more dependent upon employee and customer satisfaction. And that means switching the focus to them.

On the Wings of Butterflies

After recently attending a college reunion I have a renewed appreciation for what's known in chaos theory as "Sensitive Dependence on Initial Conditions" (SDIC)—aka, the "Butterfly Effect." Simply put, tiny variations of an initial condition in a dynamic system can produce huge variations in the system's later behavior. By this theory a butterfly flapping its wings in China can produce—through a lengthy cause-and-effect chain—alterations in weather patterns in North America. Leaving aside the arcane science and calculus involved (or the validity of the butterfly example itself), SDIC, when applied to human events, lets us play an interesting game of "What if?" For instance, whose flapping wings triggered the world-wide recession? (Many answers, of course.)

But it can be more fun to apply SDIC to personal events in our own lives, as we did at my reunion. For example, what if we had a different teacher in school who didn't inspire us to dive into mechanical engineering or information technology or political science, which we may still be engaged in ten—or forty—years later? What if we didn't sell ads for our student newspaper, leading us into a career in sales or advertising or publishing? What if we didn't attend that Saturday night mixer (are they still called "mixers"?) and didn't meet our future life partner?

In my case, the simple act of oversleeping what would have been my induction into the U.S. Army as an undergraduate member of the Reserve Officers Training Corps (not to mention my joining a campus rock & roll band that blasted me into the music business) clearly contributed—according to my relatives anyway—to my eventual moral decline. (My becoming a management consultant years later, of course, represents rock bottom.) So ... was there a seemingly insignificant event in your life—perhaps in your school years if you're out of school now—that has since changed EVERYTHING?

233 And [Steadfastly] Counting

At 6 a.m. on 3 July, on NPR, I listened to about 10 people take turns reading a paragraph of the complete Declaration of Independence, 233 years old 18 hours thence. (I teared up, which surprised me—and then it didn't. What's not to tear up about the document and what it stood and stands for?) On 20 January I had also teared up, less for what Mr. Obama's taking the oath meant than for the spectacle of a peaceful transference of power ... AGAIN ... in what has become the most powerful and wealthy nation in history.

As Iran and then Honduras have demonstrated in just the last few weeks, representative democracy is a fragile creature—which makes July 4th and what it portended all the more miraculous.

To top it off there comes the fact that the Declaration of Independence was an utterly absurd idea. Britain, though distracted, was the most powerful nation on earth itself, as of the summer of 1776. And through it flowed much of the Colonies' lifeblood. Washington may well have looked the part of a Commander in Chief, resplendent on one of his grand white horses from the Mount Vernon stables, but he was, in fact, inexperienced (an earlier, botched military foray of his had ignited the French & Indian War), and his army was poorly manned and poorly equipped.

Yet the long odds came in, with many a nod to our beloved ally—France. (God bless!) And hence the first large-scale experiment in citizen sovereignty began. The journey included the burning of Washington by the very same Brits, a ghastly war among brothers, and on through the trenches of World War I, Iwo Jima and D-Day, and the 40-year cold war, when the potential nuclear cloud hung perpetually low in the sky.

The journey was never easy. And so it remains today. Iran and North Korea and Afghanistan and Pakistan are volatile beyond measure. Capitalism's nasty side effects have also caught up with us with a vengeance, as they occasionally do.

And yet on we go. We have many democratic mates today, from massive India to the massive European Union to Japan and Southeast Asia and Oceania and almost all of Latin America. We have an economy that continues to produce and fund entrepreneurs at an undiminished rate—Americans by and large see the impossible as a shot all but in the net—from Bentonville, Arkansas, to Houston to Palo Alto to Portland to Bethesda to Las Vegas to San Diego to Cambridge MA.

There is much work to be done, many potholes to fill, but also an incredible amount worth smiling about and taking pride in. It's been another tough year. And, yes, another great and amazing year in the 233-year journey from Independence Hall.

While it is customary to thank in particular our troops abroad at such a holiday, and so I wholeheartedly do, this year I want to single out the American worker—in particular the small business owners, by the millions, who have redoubled their already Herculean efforts to stay afloat and serve their communities and their employees; and the many, many workers who have taken pay cuts in preference to watching their peers laid off; the involuntarily unemployed who each day get out of bed and pursue the possibility of another job; and the entrepreneurs in tomorrow's industries who continue their 24/7 efforts to build an energetic, and exotic future. Due to so many of these folks it's actually been, in its own way, a grand year—so many have dug deep within and discovered and exhibited astonishing resilience. After all, it's the tough times that, in fact, define us—always has been the case, always will be the case.

Here's to year 234!
Welcome!

(And thank you, dear old Philadelphia!)

Above, R.K. Miles, our home and hardware store in Manchester Center VT—competes successfully with a nearby Home Depot. Below, my local country store, Mach's, in nearby Pawlet VT.

Link Roundup #3

There are big changes adrift in the publishing industry and there's a lot of experimentation happening. One WOW! project is happening in Tom's neighborhood. At his favorite local bookstore, Northshire Bookstore, you can now find print on demand books. We're not sure how the experiment will turn out, but everyone at tompeters.com adores this cozy independent bookstore. If you're ever in Manchester Center, Vermont, stop by.

Have you been tuned into the debate? Malcolm Gladwell reviewed Chris Anderson's book, Free: The Future of a Radical Price. Chris Anderson responded, in part. And Seth Godin chimed in as well. Let us know what you think about the future of Free in the comments.

Cool Friend Rod Beckstrom has recently been appointed the impressive position of CEO of ICANN (Internet Corporation for Assigned Names and Numbers).

Tom loves talking about design, and never shies away from a debate about gender differences. Cool Friend Andrea Learned has a recent post involving both that we think you might enjoy.

If you're not a texting fiend, you might find this acronym decoder site helpful. HTH! (Hope this helps!)