On a long walk through the woods the other day I thought back on memorable professional experiences. The most impactful ones had things in common. I’ve picked three to illustrate the point.
The CEO of a large health system convened his executive team and outside advisors to decide whether and how to respond to a request for proposal (RFP) from a competing non-profit hospital seeking to be purchased. Intelligence indicated that the RFP had also gone to several for-profit hospital chains which would be new market entrants and formidable competitors. Conventional wisdom suggested that the health system should submit a preemptive bid to buy and eliminate its competitor. Instead, the health system took competitive advantage by building a hospital half-way between its urban flagship hospital and the competitor. The new hospital was a huge success.
The most powerful third-party health insurance company in the region informed a small suburban non-profit hospital with very little negotiating leverage that it was drastically cutting its reimbursement rates when its current contract expired. While there were credible antitrust claims this and other hospitals had, none of them had ever brought suit to advance those claims, fearing protracted, expensive litigation and other reprisals. After careful planning with advisors and an honest discussion with board members, the hospital brought suit on its own. On the eve of the deposition of the insurer’s CEO, the insurer agreed to reasonable rates and the suit was withdrawn.
A new trustee of a non-profit social service agency was called into his first finance committee to review and approve a deficit budget for submission to the board soon thereafter. Sensing that management was used to getting “rubber stamp” approval, he voiced concern that management had not yet addressed the tough issues causing the budgeted deficit and told the committee he could not support the budget without a plan to address those issues. Given the tight time frame and after collaborative discussion, the committee and board voted to approve the budget with two strict provisos: the issues had to be addressed over the coming year and the following year’s budget had to be balanced. Thereafter, balancing the budget became an institutional norm.
Conventional wisdom, circumstances and/or the usual way of doing business would have suggested a different result. Instead, each organization basically said “wait a minute, let’s think this through”. A disciplined decision-making process was followed that included obtaining blended points of view after looking objectively at the relevant facts and circumstances. A long-term, strategic view was taken. Important stakeholders were consulted. Consensus was stressed. Ultimately, courage was called upon to say “no”.