radical decision making

Radical Decision Making for Hospital and System Boards


Boards need a more aggressive process to respond to unusual competitors

By Michael W. Peregrine and Kenneth Kaufman

The seismic forces currently roiling health care present boards with a new set of profoundly consequential strategic options. These often involve significant risk, major mission shifts, and challengingly short windows of opportunity. The depth and breadth of these forces require fiduciary introspection: As currently structured, does our decision-making process position us, as a board, to prudently respond? Can we move fast enough, give sufficient consideration of the issues, adequately digest advice from advisors and management, and acquire a sufficient understanding of the stakes in play?

Trustee Talking Points

  • A disruptive health care environment presents boards with a new set of consequential strategic options.
  • But the traditional approach to decision making may be overly time consuming and ponderous.
  • Colossal environmental shifts are accelerating the end of the useful life of the traditional approach.
  • Health care leaders need a different, and perhaps more radical, approach to decision making.

In this environment, the board’s traditional approach to major decisions increasingly falls short. A more aggressive process, somewhat radical in design but still grounded in duty of care principles, merits serious consideration.

From 'Now' to 'Near' to 'Far'

Jim Hackett, CEO of Ford Motor Company, provides health care leaders with a powerful framework for understanding the decision-making demands of a disruptive environment. The framework organizes strategic objectives into three dimensions that executives and boards must address simultaneously:

  • Now: Be successful in the current health care delivery and economic model while also making the critical pivot to the future model.
  • Near: Place bets on the future and pivot resources to support those bets.
  • Far: Envision a future state and future role, knowing that any prediction is uncertain and subject to change.

Each dimension requires a very different set of strategies, capabilities and cultures. For the boards of health care organizations, a critical question is whether the decision-making process that has been successful in the “now” — an inpatient-oriented, incrementally changing environment — is the same process that will be successful in the “near” and “far ” — a rapidly changing outpatient and digitally oriented environment with large, aggressive new competitors.

Very likely, the answer is no, leaving boards and executives to determine how they will make a major transition from the long-standing structure, process and culture of decision making.

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