Marina Gorbis's Blog, page 1515

Make Physicians Full Partners in Accountable Care Organizations

The Affordable Care Act encourages the formation of accountable care organizations (ACOs) that can accept bundled payments for hospitalization and outpatient care. Most ACOs use an organizational structure, the foundation model, which has a serious shortcoming: It limits the extent to which an ACO’s practicing physicians must commit themselves to the goals of performance improvement and cost containment.

For that reason we advocate an alternative: the partnership model, which relies on shared leadership among hospitals, insurance plans, and medical groups. This is the leadership structure needed to improve physician performance and overcome the tendency of doctors to try to maximize their individual compensation. Although the partnership model has not yet been tried for ACOs, it has allowed a variety of multi-specialty medical groups — including the Mayo Clinic, Kaiser Permanente, and the Geisinger Health System — to achieve superior quality outcomes, outstanding service, and increased affordability. We are confident it will allow ACOs to do the same.

The Foundation Model’s Flaws

The Affordable Care Act does not specify an ACO’s organizational structure but it does say that sooner or later the ACO must be able to accept financial risk. This provision requires the ACO to obtain and reserve enough capital to offset the risk. For this reason, well-capitalized hospital systems and insurance companies have taken the lead in setting up ACOs. Physicians provide medical care, lead clinical departments, and advise the organizations on clinical and, at times, administrative decisions. However, hospital or insurance executives in these hospital-based ACOs retain ultimate decision-making power.

But a hospital-led system will fail when it tries to increase physician productivity or modify individual compensation. Physicians resist change, especially when they see their physician leaders in subordinate roles.

To remedy this flaw and to accommodate states that prohibit the corporate practice of medicine, hospital systems have created nonprofit foundations that contract with health plans and hospital groups. Most foundation models define one or several medical groups to care for patients. Physicians own and operate these medical groups and hold seats on the foundation’s governing body. Physicians decide their own compensation and working conditions and have a voice in expressing the foundation’s mission. Foundations can coordinate care better than the disorganized fee-for-service practices found in many communities, but their structure insulates physicians from strategic decisions and adds a layer of administrative cost.

The Partnership Model’s Advantages

The partnership model improves physicians’ confidence and trust in their leaders. Here’s how it works:

The ACO is structured as a not-for-profit entity with a governing body that includes representatives from the hospital, health plan, medical group, and community. No single entity has a majority of directors. This board sets strategy, contracts with purchasers of health care, contracts with hospitals and the medical group for the provision of medical care for a defined patient population, and accumulates and allocates the enterprise’s capital. Although the initial funding of the ACO may come from a hospital or insurance company, the ACO repays this investment by generating an operating margin. Hospital, health plan and medical group share in the organization’s economic risks and rewards.

Making the Model Work

For the partnership model to work, the medical group, the insurance company, and the hospital must be independent entities, each with a board of directors and a unique leadership structure. The medical group must be owned and operated by its physicians. Unlike the ACO board, the majority of the medical group’s board of directors is comprised of practicing physicians and includes the medical group’s chief executive officer. The medical-group board accepts responsibility for the care-delivery system, selecting the chief executive officer and appointing practicing physicians as formal department heads accountable for recruitment, quality, patient satisfaction, work expectation, and individual salaries. To accomplish this, the board and CEO oversee leadership development and selection.

The partnership model differs from the foundation model in that the medical group works with, not for, the hospital or health plan and shares the performance risk of the enterprise’s decisions. Practicing physicians have equal representation on the enterprise’s governing body, where they can represent their interests and those of their patients. Physicians participate in decisions about pricing, cost, capital generation and expenditure, and brand management. In this way, physician leaders in the medical group share responsibility for all aspects of the enterprise; practicing physicians will embrace operational changes when they have a voice in deciding strategy and improving medical care.

The principal advantage of the partnership model of leadership in ACOs is that it aligns the goals of patients, hospitals, health plans, purchasers, and physicians. No entity can benefit at the expense of the others. Attaining this alignment produces high morale and commitment to improved performance among the ACO’s physicians.

A successful ACO must decide the correct number and mix of physician participants, a potentially disagreeable task. Similarly, physician leaders must determine the relative compensation among medical and surgical specialties. They can demand that all physicians use electronic medical records and offer patient conveniences such as secure e-mail and video visits. Without an independent medical group owned and operated by physicians, accountable for clinical outcomes and rewarded for improved performance, these changes will not happen.

The partnership model facilitates the transition from episodic, bundled payments to a system of prepayment for all medical services. Prepayment allows the ACO to predict its revenue and divide it rationally, including the accumulation of required capital. Sharing accountability for revenue and expenses creates an incentive for physicians and hospitals to work together. Prepayment also allows the cost of different approaches to be compared. Financial success or failure becomes transparent.

Forming and operating a partnership with physicians in leadership positions is not easy. At present, few physicians have formal leadership training and are traditionally autonomous. But they chose medicine because of their commitment to health, and the partnership model can rekindle this mission-driven spirit. By making physicians fully accountable for success and failure, it will create ACOs that maximize quality, service, and affordability.

Follow the Leading Health Care Innovation insight center on Twitter @HBRhealth. E-mail us at healtheditors@hbr.org, and sign up to receive updates here.

Leading Health Care Innovation

From the Editors of Harvard Business Review and the New England Journal of Medicine




Employee Engagement Drives Health Care Quality and Financial Returns
Why Can’t U.S. Health Care Costs Be Cut in Half?
Bringing Outside Innovations into Health Care
How to Rehabilitate Medicare’s “Post-Acute” Services

That Hit Song You Love Was a Total Fluke

When Princeton sociology professor Matthew Salganik was a doctoral student at Columbia, he got interested in blockbusters –- specifically, he got curious about the role of social influence in determining the success of music, art, and books.  He and his coauthors set up an ingenious experiment: they created a website where people could listen to songs by unknown artists, then decide whether they wanted to download particular songs to their private library. Participants were randomly assigned to different virtual rooms. In some rooms, people saw only a list of songs, while in others they could see how many times a song had been downloaded. Altogether the researchers created eight rooms — parallel worlds, really — which allowed them to study not just the role of popularity, but also the role of chance, in the creation of hits.

The upshot? Not surprisingly, people downloaded songs that others had liked –- in other words, they responded to social influence. But different songs took off in different rooms. As a song’s popularity snowballed, more and more people downloaded it. Eventually the different virtual worlds had created different mega-hits.  One concrete example of this is the song “Lockdown” by the band 52 Metro.  In one world it came in first, in another world the exact same song was 40th out of 48.

It would have been impossible to predict which songs would become hits, because given that so much decision making was based on other people’s earlier decisions. To a surprising degree, Salganik concluded, blockbusters are random.

I talked with Salganik about the implications of his findings for decision-making.

(For more on the experiment, read the New York Times’ coverage. For its implications for marketing, see this HBR article from Duncan Watts, one of Salganik’s co-investigators. You can see all the coverage and the original and subsequent academic papers, and review the data here.)

Screenwriter William Goldman, of Princess Bride and Stepford Wives, once said of Hollywood, “Nobody knows anything” — which of course has pretty significant implications for decision making under uncertainty. But that’s not quite true, right?

Right. This is best illustrated by the story of when I met with the head of research of one of the big networks. I showed him a figure that pretty much encapsulated our findings. He looked at it and said, more or less, “I already knew that.” And I said, kind of surprised because I had just spent months on this project, “Great! How?” And he said, “I can predict failure, but I can’t predict success.”

The implication is that people who are experts in these domains can recognize the material that’s really bad, but have almost no chance of knowing which of the remaining good material is going to break out and become a hit. And that’s exactly what we found in the experiment: low appeal songs almost always do badly, but the high appeal songs are harder to predict. Different parts of a system have different amounts of predictability.

What does that mean?

Unpredictability is not the same for every song. Higher quality songs, as a group, will outperform the lower quality ones, but which high-quality song is going to break out is impossible to figure out beforehand. In the experiment, we rewound the world and saw the range of possible outcomes that could have happened – and they’re all over the place!

What does this mean for how we make decisions in domains like this?

If you can accept the inherent unpredictability, then you can draw better lessons from your experiences. But many decision makers don’t do this. Instead, they develop rules of thumb that often obscure the reality: never release a romantic comedy in October. Why? Because everyone knows that you don’t release a romantic comedy in October. Why? Because we tried it once and failed. That kind of reasoning leads to the development of silly just-so stories that can be counter productive.

Instead, you can reframe the decision. Asking, “Is there a possibility that this could take off?” is much easier to answer, and so it’s more useful.

This suggests that judging decisions on outcomes is wrong.

To the extent that the process is predictable, you should be judging on outcome. But if you could imagine lots of disparate outcomes, then there is a fundamental limitation to what a decision maker — even one with perfect information — can do.

As a decision maker I find this depressing.

You shouldn’t! It’s really about accepting your limitations, and not trying not to learn too much from any outcome that has a large random component.

Think about it like this: independent decisions give you more information than interdependent decisions. You can look at the success of Gangnam Style, and it seems like people are making a decision to watch the video. But those decisions aren’t independent – they’re interdependent. People are watching because other people are watching, not because it’s necessarily a great song (although it may be).

Within an organization, that means that individuals should be assessing the quality of an idea or product independently -– at least initially. After that, a team can come to a consensus. If you all sit in a room together initially, though, you’re going to lose information because of the effects of social influence.

But if the consumers are interdependent, you’re still limited in what you can do to affect them. Should companies try to influence them, to alter the signal?

It’s a challenging problem. In the first set of experiments, we saw that success led to more success, which led to inherent unpredictability. So in a subsequent experiment, we tried to create false success to influence behavior: we inverted the results in the experiment, making the popular songs lower than the unpopular songs, and then let it evolve naturally. We found that, for some songs, this change in popularity became self-sustaining. But for other songs that didn’t happen. The volunteers would listen to the low-quality, highly ranked songs more often but wouldn’t download them. Differences in quality create real limits to self-fulfilling prophecies.

It’s also worth noting that in this world where we distorted the popularity of the songs, the total downloads decreased 25 percent – the market contracted. People left earlier, and they were less likely to download the songs they had listened to. So while it may be in the interest of each producer to manipulate the signal, it has pernicious effects on the whole system.

High Stakes Decision Making An HBR Insight Center




When Making a Big Decision, Think: “Eddie Would Go.”
How Anxiety Can Lead Your Decisions Astray
The Big Lesson from Twelve Good Decisions
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The Recession Made U.S. Teenagers Less Materialistic

The Great Recession partially reversed a decades-long trend among U.S. adolescents toward greater materialism and less concern for others, according to a study led by Heejung Park of UCLA that analyzed surveys from thousands of high-school seniors. For example, results from the 2008–2010 downturn, in comparison with the 2004–2006 period, showed a decline in the importance of owning expensive items such as new cars; meanwhile, the average view of the importance of having “a job that is worthwhile to society” rose from 3.15 to 3.21 on a 1-to-4 scale, and agreement with ‘‘I would be willing to eat less meat and more grains and vegetables, if it would help provide food for starving people’’ rose from 3.51 to 3.59 on a 1-to-5 scale. Past research has shown that a decline in economic wealth promotes collectivism.

Are Apple’s New Features Convincing Customers to Buy?

Barely has the hype from the launch of the iPhone 5s and 5c subsided that chatter about the iPhone 6 has begun. A larger screen size is rumored. Apple’s product innovation strategy places it on a punishing treadmill. If the company does not deliver new products or new features to the market’s expectations and calendar, investors get jittery and the stock price sags; competitors attempt to steal the lead, and to set a faster pace of innovation. Apple’s brand and customers’ loyalty to it may cushion the dips between new product introductions and help it to fend off the attacks of competitors and the demands of aggressive shareholders, but management is still held to a relentless pace of innovation. It must deliver or move over.

But both management and investors should recognize that the introduction of new products and features is only one element in the competitive game in which Apple is engaged. More important than the development and introduction of new and differentiating features is whether they catch on with customers: are they used as criteria in customers’ choice of a smartphone?

When Apple introduced the iPhone 3G in June 2008, it wasn’t the first smartphone to have the faster networking standard. But because the iPhone had already captured buyers’ attention and imagination, its features quickly became the standard by which all other smartphones were judged. The touchscreen, multi-touch, and dedicated apps were now seared into customer expectations. The inclusion of the “3G” feature in the second generation iPhone’s name made it a special criterion, and one that customers quickly adopted, and that many even identified uniquely (if erroneously) with the iPhone.

With the launch of the latest generation of iPhones, Apple has introduced a new set of features: Touch-ID, a 64-bit processor, and a better camera.  The question for Apple management as well as investors is: which of these features will become key criteria of purchase? Will customers choose the iPhone 5s over competitors because it has Touch ID? Will 64-bit become the new standard for smartphones? Is the better camera a deciding factor? And if some of these do become criteria of purchase, will they be sustainable? Will they continue to be unique to the iPhone, or will they be quickly replicated or rendered obsolete by competitors?

These questions go to the heart of innovation strategy. The “3G” criterion, for example, eventually proved not to be very hard to beat, with the introduction of 4G models by competitors. The criterion that remains strongest, most difficult to replicate, and, therefore, longest lasting is the brand: loyal customers demand the latest iPhone. That is their primary criterion of purchase, almost regardless of the product’s features.

The lesson for Apple is that its innovation strategy should strive to build long-lasting and unique customer criteria of purchase, not just better products or features. By innovating on eventually replicable features, it is placing itself on a competitive treadmill rather than building a sustainable competitive advantage.

Entrepreneurially-Minded Politicians Should Put Their Money Where Their Mouths Are

Entrepreneurship. It’s a buzz word that pols and policymakers love to use in speeches, proposals, and memos. Startups and small businesses, they say, are the key to growth and job creation. And they aren’t lying. But if they really mean what they say, they should put their money where their mouths are. Entrepreneurs need help — especially if they’re trying to make bread outside of Silicon Valley, New York, or Boston — and encouragement isn’t going to cut it. Incentives, fellowships, residencies, healthcare, gap funds, tax breaks, you name it — any (or all) of these things would go a long way toward increasing a local entrepreneur’s odds of success.

Feeling Conflicted? Get Out of Your Own Way

Erica Ariel Fox, who teaches negotiation at Harvard Law School, discusses how to resolve inner conflict to lead wisely and live well. For more, read her book, Winning from Within.

Download this podcast

Be a Minimally Invasive Manager

So much of what we call management consists in making it difficult for people to work. —Peter Drucker

One of the hardest things for entrepreneurs to learn is that most of the time, the best thing they can do is get out of the way of the people actually doing the work. That’s the core tenant of what I call “Minimally Invasive Management.”

The idea reflects the struggles of tech-centered start-ups to rethink the role of professional managers. These companies tend to be run by engineers and creatives, not MBAs. At least in Silicon Valley, management is becoming just another operating function, like payroll and finance and sales, all serving to facilitate the work of the technically and creatively skilled who do the heavy lifting.

Be aware, there’s a risk here that the pendulum swings too far, and companies end up under-managed. Skilled managers still matter – Minimally Invasive Management is not the same as no management at all.

You’ve heard of software as a service? This is management as a service. Managers serve the people doing the work. And nobody is more important in an organization than the people doing the work.

In this brave new world, management’s role should be to remove the impediments in front of the people doing the work so that they can do it well – and so they can be satisfied, rewarded and motivated in their work.

When you start your company, with a half-dozen people in a room, every job is important. Everyone is involved in every decision. Everybody is empowered. Everybody feels like a stakeholder. But then you add another half dozen people …. and another half dozen … and another half dozen…

And then you start to see chinks in the armor. You start with a bunch of doers, but fall into dysfunction. Priorities aren’t being set. Conflicts aren’t being resolved. Communications aren’t clear. People don’t know what decisions are being made or why they’re being made. Morale starts to fade – and things slow down. That’s bad: in the world we all operate in, speed is everything.

So those are the signs that you need management. Not because people need a boss, but because people need someone to resolve the issues that are stopping them from doing their work. Managers aren’t ball carriers. They’re running interference for the ball carriers.

In the world of minimally invasive management, managers have three primary jobs: they need to hire; they need to develop and serve their people; and they need to fire.

Hiring the best people is the easiest way to build a high functioning, competitive organization. If you hire badly, you’ll spend most of your time as a manager dealing with personnel issues and you will find that 75% of your time is dealing with problems. If you hire well, you can invest more time on issues like strategy, innovation, and goal-setting. Management can spend the bulk of its time taking a C+ player and turning him into a B- player, or they can take an A- player and make them into an A player. Where would you want them to spend their time? The answer is obvious.

Job two is staff development. A good manager doesn’t make people cogs in a wheel, but instead gets all the wheels spinning together. That starts with giving people clear priorities and communicating well what’s going on in the organization – what decisions are being made and why they are being made. It’s about taking individuals and making them 10% or 20% or 50% better than they ever thought they could be.

That said, you can hire as well as you can, and you can develop your people strongly, but ultimately you are going to be wrong sometimes. Jobs change. People don’t step up to new roles. Organizations change. You need to understand who can improve and who is simply incompetent.

Managers need to know the difference. There are high costs to getting rid of a B player if they have the competence to be a B+ or even an A player. But if they don’t, you need to resolve that quickly. Organizations regress to the mean. If you have a bunch of B players that are not advancing, your organization will start to regress to their level.

Adding managers to an entrepreneurial organization is always difficult. Those first half dozen people you brought in felt like stakeholders. They were involved in every decision. You’re now asking them to pull back, focus more on their work and not be involved in every decision. This involves trust. A great manager has to create that trust with their organization. They have to do it through communication, and predictable and reliable behavior. There won’t always be unanimous agreement, but management must be fair and honest – and work hard for the benefit of the team. And ultimately you need managers who know that, most of the time, they need to get out of the way and let people do their work.

Four Steps to Resolving Conflicts in Health Care

Conflict in health care has dominated the news in the United States lately with the political showdown over the Affordable Care Act followed by the shaky launch of the federal health insurance exchange. Conflict, however, is not new to the health care system; it is a fragmented landscape with many players with sometimes conflicting interests and objectives. Yet the nuances of negotiation and conflict resolution are too rarely taught in medical or business schools.

We have been engaged in health care negotiation and conflict resolution for two decades. We have worked on conflicts as mundane as work assignments and as complex as hospital mergers. We use and teach a simple four-step structured process that works in cases ranging from simple one-on-one interactions to extended multi-party discussions.

After assembling representatives of all stakeholders in a conflict, the first step is to have each stakeholder articulate their “self-interests” so that they are heard by the others. What does each need to get from this exchange? The second step is to look at where the overlap among these self-interests reveals agreement, what we call the “enlarged interests.” In our experience, these agreements always outnumber the disagreements.  The third step is to collaborate to develop solutions to the remaining disagreements, or “enlightened interests.” This is the time for creative problem solving. The fourth step is to certify what has now become a larger set of agreements, or “aligned interests.” Any outstanding disagreements are held to the side for future negotiations. We’ve taught people in as little as 30 minutes how to use this approach. (See our book Renegotiating Health Care for more detail on the process.)

We call this process the Walk in the Woods after a play that dramatized a well-known negotiation over nuclear arms reduction. The delegations from the United States and the Soviet Union were at loggerheads. During a break, the two lead negotiators went for a walk during which they unearthed their personal as well as each nation’s deeper, shared interests in peace and security. This understanding enabled them to break the deadlock and move forward.

The same negotiation principles that can reduce nuclear stockpiles can be effectively applied even at the front lines in health care. For example, there is often pressure to change who does what when new technologies are deployed or initiatives are undertaken to lower costs. Consider the situation in a traditional orthopedic practice where a physician sees every patient who comes through the door. Is this really best for the patient, the practice, and the larger system?

Most patients who arrive at an orthopedic office suffer from straightforward conditions such as a simple, non-displaced fracture or a sprain. These can be adequately treated by a properly trained physician’s assistant (PA), and patients can typically be seen much more quickly by a PA than by a specialist. If outcome quality and patient satisfaction can be maintained and costs lowered, this should be an easy move to make. Such shifts in responsibility, however, are often resisted and the resulting conflict can be acrimonious. Why?

Both physicians and patients have come to expect to interact with each other. Doctors prize their clinical autonomy and their relationships with those they treat, and the fee-for-service model rewards them for taking care of patients themselves. Patients, meanwhile, want to be treated by an “M.D.” and often a board-certified specialist rather than their primary care physician (PCP). The PCPs value their relationships with the specialists in the network and focus on their gatekeeper role rather than stretching the scope of care they provide. Insurers want to control costs, of course, and they and others exert pressure to divert simple cases from high-cost specialists to less expensive physician’s assistants or other non-specialist care-givers. No one is happy with the resulting conflict: Orthopods fear losing their patients; patients are anxious about getting lesser care; PCPs worry that their relationships with specialists will erode; and insurers and administrators find the resistance by all parties frustrating, time-consuming, and expensive.

Now, imagine that the physicians in our orthopedic practice host an open house Walk in the Woods discussion that includes referring PCPs, patients, and representatives from insurers. Engaging in the four-step process, the parties would find that high outcome quality, patient satisfaction, and keeping care affordable are on everyone’s list of self-interests. Through the process, the orthopedists could educate both the PCPs and patients on when a specialist’s expertise is truly needed. Patients could articulate how they weigh the trade-off between waiting time and the provider they would see. The insurers could explain some of the cost implications of different options. One can envision the idea of physician’s assistants treating routine injuries emerging from the process as each party identifies the benefits that meet their combined and self-interests:  The orthopods may be freed up to see a greater number of more complex and interesting cases; the PAs are able to work to the level of their ability; the PCPs expand their relationships with more members of the orthopedic practice; the insurer reimburses less for uncomplicated treatments; and patients would get appropriate care, save time, and help keep premiums down.

The two aspects of this approach that can be extrapolated to myriad other conflicts are the use of a structured process and inclusion of all key decision-making stakeholders. The structured process minimizes the ego battles and tangential scuffles by keeping all parties focused on productively resolving the central issues. Depending on the number of parties and complexity of the negotiation a Walk can take from 10 minutes to 10 days or more.

The inclusion of all stakeholders is essential because people only truly embrace solutions that they help create. Anytime that one party tries to impose something on another, the natural inclination of the imposed upon party is to resist. A little time spent upfront engaging in joint problem solving saves many hours — and headaches — that come with a mandate.

Follow the Leading Health Care Innovation insight center on Twitter @HBRhealth. E-mail us at healtheditors@hbr.org, and sign up to receive updates here.

Leading Health Care Innovation

From the Editors of Harvard Business Review and the New England Journal of Medicine




Employee Engagement Drives Health Care Quality and Financial Returns
Why Can’t U.S. Health Care Costs Be Cut in Half?
Bringing Outside Innovations into Health Care
How to Rehabilitate Medicare’s “Post-Acute” Services

On Your Next Business Trip, Break Out of the Bubble

We arrived at the woman’s home in the early afternoon. Getting to it involved walking down narrow alleys rich with the aroma of food being cooked on an open grill mixed with the stench of sewage and refuse. Young men who clearly had nothing better to do on a Tuesday afternoon eyed us suspiciously. Children raced up to get a glimpse of the unusual site of Caucasian visitors. We passed by roosters in cages that were gearing up for the afternoon cock fight.

We were in a depressed area of the province of Rizal, part of the sprawling city of Manila in the Philippines, conducting field research with a local company looking for new growth opportunities. The customer we were interviewing was so-called “class E,” with a household income of less than $2 a day. She was an important member of the community, though, as she helped the township of about 400 families (some of whom were legal occupants, others who simply squatted) obtain basic utilities and deal with common problems.

Not surprisingly, the woman’s small residence lacked many modern conveniences. But on the wall we saw a picture of one of her sons dressed up for a school picture. We asked what she did to support his education. She proudly began to talk about how she had a prepaid wireless broadband card that allowed him to access education via the family mobile phone. We then asked her what else she did with the phone. She told us how she was on Facebook and had about two dozen friends.

The famous Maslow’s hierarchy of needs teaches us that people at these income tiers ought to be concerned primarily with physiological needs (food, water, sleep). Those concerns exist, of course, but the explosion of technology in all corners of the globe means you see behavior that might surprise you. Another class E customer we visited had a 36-inch flat-screen TV and a karaoke machine.

There’s an important lesson in this for innovators seeking to create new growth among customer segments that don’t constitute the core of today’s markets: If you don’t go, you can’t know. It’s easy to make incorrect assumptions about customers you don’t really understand. Reading about these people certainly helps, but until you sit across from them and watch them go about their lives, you have very limited insight.

If a particular geographic market or customer segment is important to you, make sure you’ve spent the time to understand the fabric of the market. This is even more important for senior leaders. I remember one memorable project review between a client team and a top executive in a global health care company. As one might expect, China was supposed to be a huge growth market for the company. We were describing some of the findings of our recent field work, noting in particular the explosion of entrepreneurialism the team had observed in Shanghai. “Wait a second,” a senior executive said. “China is a Communist country. How can there be entrepreneurs there?”

We didn’t know quite what to say. While this executive had been to Shanghai, clearly the trip involved landing in Pudong airport and going in a chauffeured car to the Marriott, or some such equivalent. You simply can’t get a feel for a market by remaining only in the narrow corridor between the business-class lounge and the five-star hotel in the central business district.

The world is full of surprises. Get out of your conference room and find out firsthand to ensure you have the right information to inform important decisions about innovation.

Goldman Sachs Decides Restructuring Work Is Possible, After All

Now they tell us. After years of hearing that it was impossible to restructure jobs to make them more doable, guess what? According to The Wall Street Journal, when Goldman Sachs discovered it couldn’t attract and retain the most promising recruits with pay and  perks alone, it woke up to the idea that you can actually restructure the way work is done. Earlier this year, Goldman formed a task force made up of senior staff to improve quality of life for junior employees.  The group is trying to find ways to help young employees adhere to a five-day workweek without all-nighters and ruined weekends.

By spreading tasks out among a broader group of younger analysts (they hired 14% more new analysts for 2014 than they did for 2013), and asking managers to take the time to explain more clearly upfront what they really need them to do, Goldman says it can create a saner and more efficient workplace.  Turns out you may not need people pulling all-nighters to crank out that 100 page presentation when two pages of talking points will do. This isn’t the “softer side of Goldman”, or the “right thing to do”:  it’s good business.

The most talented Millennials, as Goldman has learned, aren’t willing to sacrifice their lives to their careers. Neither are plenty of other exceptional people—men and women—who currently opt out from the grind of traditional corporate life and investment banking in particular. Restructuring the nature of corporate work makes employers more efficient and productive since they no longer have to buy people’s entire lives or pay for work they don’t need.  But that kind of change takes a lot of time and thought, and Wall Street in particular has been able to coast along mindlessly, ignoring the problem because it’s easier to just pay young grunts – and older grunts for that matter – to work around the clock to get the work done.

It should come as no surprise that economic forces (e.g., companies that can’t hire and retain great people) rather than human forces (e.g., why would you only want to hire people willing to sacrifice everything) are driving this change on Wall Street. And Goldman – long the poster child for how success is defined on Wall Street – should be applauded for taking the first step. However, at first blush, it seems that their changes don’t go nearly far — or high up — enough. Lloyd Blankfein, who admitted to a group of interns that his fellow execs “could also relax a little bit, too,” should start leading by example.  If Goldman’s leaders organize their work more intelligently, the entire C-Suite could show it’s possible to kick back a little and still deliver for shareholders.

For too long, managerial laziness has driven the way our top corporations have thought about work.  Better to find a “superstar” who can drive a team ruthlessly until everyone burns out, the thinking goes, than to develop a work plan that can get the same result with more creative and flexible management strategies. Time in the office is an “old think” factor that still shows up in too many HR department performance ranking grids.  Instead, work can be broken up into discrete projects that allow for varying time commitments.  And, people who are performing at the highest levels — even if they choose to work fewer hours —  should be treated as stars, not slackers. Goldman and other high-pressure, high-powered firms should retire the notion that important and quality work can only be done by people who boast of their 24/7/365 commitment to their jobs.  Why does someone need to work 12 hours a day to be considered a high performing player?

But despite the challenges with driving this kind of organizational change, I have hope for Goldman. Before this focus on junior employees, Goldman invested a lot in trying to crack the code on attracting and retaining another elusive group: women. The Goldman Sachs Returnship Program recruits people – largely women – “who are seeking to restart their careers after an extended, voluntary absence from the workforce.”  The program touts that “a returnship provides individuals with an opportunity to sharpen their skills in a work environment that may have changed since their last experience with a full-time job.“  (Emphasis added.) Nothing would help Goldman’s returnship program more than actually changing their work environment by decoupling time and performance. And their willingness to be creative with women returning to the workforce makes me think they’ll be able to structure work more appropriately for other employees, too. Maybe they’ll even figure out a few things other organizations could try, too.

Then Goldman Sachs really would be doing “God’s work.”