Nielsen: Building Operating Dexterity

For the past two weeks, this column has examined a recent IBM study entitled Capitalizing on Complexity.  The study, conclusions and recommendation are based on face-to-face conversations with more than 1,500 CEOs worldwide.

Another of the major findings is that CEOs of ‘standout organizations’ are capitalizing on complexity by “Building Operating Dexterity.” 

“To create a profile of dexterous organizations, we grouped those CEOs who recognized the value of fast decisions, an iterative approach to strategy and the ability to execute with speed. These are the basic organizational constructs for quick, effective action in a changing and complex environment.

Notably, we discovered that this dexterous group was 19 percent more likely to view creativity as a top leadership quality. They have other objectives in common. They are more likely to avoid fixed costs wherever possible. Three-fourths of CEOs who are keenly focused on operational dexterity plan to change their operations to increase cost variability.”

The study found that ‘standout organizations’ are 30 percent more likely than others to be focused on simplification.

“The CEOs we spoke with expressed a need for simplification that extends beyond lean processes and easier-to-use products to more useful and streamlined interactions with their customers, employees and partners. CEOs weren’t advocating stripping their operating structure or product lines of all complexity. Rather, they were focused on optimizing their operating models for specific objectives. For many, the primary purpose is the speed and flexibility to go after new revenue sources. For others, it is to get closer to customers by creating better customer experiences.”

Given the current evolution (some would argue revolution) and continuing complexity of healthcare in America, the IBM study and its recommendations are highly relevant and applicable to healthcare leaders across America and around the world.  

“Organizations that can flex, recalibrate and optimize their organizations to pursue specific objectives are best situated to go after any opportunity or respond to any event that comes their way.”

The study recommends the following questions for CEOs and leaders who want to build and improve operating dexterity:

  • “In what ways can you simplify processes and develop the agility required to execute rapidly?
  • How can your organization benefit from taking on more complexity on behalf of customers or citizens?
  • How will you integrate and analyze timely information to gain insight, make quick decisions and enable dynamic course correction?
  • Have you implemented asset and cost flexibility, and defined partnering strategies to compete in your chosen markets?”

 

These are great questions for a leadership meeting or retreat!  They are also important questions that should be frequently addressed throughout your healthcare organization, not just during formal planning cycles, but through the year.  

The IBM study is available at no cost at http://ibm.com/ceostudy7.   

Copyright © 2011 by Dan Nielsen, dnielsen@nihcl.com

Founder, National Institute for Healthcare Leadership   www.nihcl.com

Cell 214-695-1292

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