Marina Gorbis's Blog, page 1529

Coaching Physicians to Become Leaders

Two or three times a week, a physician contacts me, in search of executive coaching.

Department chairs, managing partners, medical directors, chiefs of staff—they’re all frustrated. As a practicing physician with experience in several leadership roles, I know how they feel: They don’t recall saying to their childhood friends, “I want to be Vice President of Medical Affairs when I grow up.” Rather, they longed to care for people, to earn a good living, and to make a dent in the world’s suffering. They wanted to be doctors.

However, at some point that wasn’t enough. They found they also possessed a desire to improve their organizations. They stepped forward, spoke up, and became leaders.

Now they need help getting things done. They know they are on the cusp of revolutionary change in health care—and it is they who will make it happen. But they feel underqualified to lead. In medical school, they trained to treat pneumonia. They didn’t learn how to steer employees through a corporate matrix to meet organizational goals and hit budget targets.

Here are four of the biggest challenges they face, along with some solutions that I’ve seen work for them.

Challenge #1: They feel overwhelmed by organizational noise.

Physician leaders have a cacophony of goals and demands ringing in their ears. They understand the need to transform care models and move toward value-based, patient-driven systems, but they also feel intense pressure to deliver revenue and improve cash flow. Meanwhile, their clinical responsibilities don’t let up. So they have trouble deciding where to focus their efforts.

A CMO of a large health plan felt this way. He spent his days putting out fires rather than making strategic decisions with lasting impact. His task list steadily grew. He wasn’t exercising, he’d developed high blood pressure, and he’d become irritable with his family. He considered leaving his executive post for a clinical one in a quiet urgent care facility.

Solution: Start with simple changes that make a big difference. In our initial coaching sessions, the CMO and I focused on ways he could immediately regain control of his schedule: working more effectively with his executive assistant, prioritizing his long to-do list to free him up for strategic thinking, and blocking off time for exercise and family. These efforts quickly paid off, renewing his sense of self-efficacy and instilling a new passion for his leadership role.

Challenge #2: They feel like outsiders.

Many physician executives find themselves betwixt and between: Fellow clinicians think of them as “suits” and regard them with suspicion, while other executives see them primarily as doctors. In advocating for the interests of one side, they inadvertently annoy or betray the other.

That’s what happened to a medical director of an accountable care organization. She agitated a large group of oncologists by saying they should cut back on prescriptions for an expensive medication. It was one of many edicts she had issued, and they took offense, openly discussing the difficulties of working with her versus the friendliness of a local competitor.

Solution: Ask more than tell. During coaching, through role playing and conversational recall, she realized that she had projected a voice of authority, not one of collegial intent—and that’s what rankled her colleagues. With some guidance, she used open questions (such as “How would you…?” and “In what way could we…?”) to better understand their clinical perspective. The oncologists responded collaboratively, working with her to create protocols that yielded savings and better outcomes.

Challenge #3: They feel stuck in transition.

The metamorphosis from bedside physician to leader is not easy. The traits that make doctors top-notch clinicians don’t always motivate others to do their best work. For example, the orthopedist who excels at meticulously re-assembling tiny shattered bone fragments may find herself at odds with her employees if she attempts to manage them with the same eye for detail and compulsion for control.

Solution: Build complementary teams. No leader can do it all alone. When coaching physician executives, I help them identify their strengths as leaders and build complementary teams to shore up their weaknesses.

Here’s an example: A managing partner of a large hospitalist medicine group lamented that partnership meetings had grown increasingly meandering and unproductive. A personality profile assessment at the outset of our coaching engagement gave him insight into his subjective, visionary decision-making style. In response, he assembled a small team of partners with more objective, detail-oriented styles to help him weigh options before presenting ideas to the larger group. After that, partnership meetings became much more focused.

Challenge #4: They feel trapped in a time warp.

In “clinical time,” you see a patient and either perform a procedure or prescribe treatment—and then quickly move on, usually within hours. But in “business time,” it can take months to solve a problem—to change a process, for instance. As proposals work their way up and down the organization, they’re discussed, tweaked, and discussed some more. Rarely does someone simply decide on a fix and make it happen.

Solution: Break large goals into smaller ones. In a coaching session, the chief of surgery at a large hospital talked about her struggle to change the privileging process for a cutting-edge endovascular procedure. I worked with her to reframe the larger goal as several smaller goals, around which she rallied key individuals and subcommittees over the next several months. Each incremental approval felt to her and others in the organization like a small win, setting the stage for ultimate approval by the medical executive committee.

Physician executives know they need to grow in all these areas. They attend courses on negotiation and organizational behavior, get input from members of their networks, and read voraciously. However, when they head back into the stormy sea of e-mails, meetings, and deadlines, they can lose sight of what they’ve learned.

That’s where coaching comes in. The solutions I’ve described certainly aren’t exclusive to coaching—you’ll find them in a variety of readily available sources, including blog posts like this. But coaching helps them stick. Whether it’s provided by a consultant or a colleague, it gives physician leaders a chance to practice and fine-tune their newly acquired skills and knowledge. It allows them time to explore leadership as a medical art—and that’s what it will take to make a dent in the world’s suffering, as they’ve wanted to since they were kids.

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




Leading Health Care Innovation: Editor’s Welcome
A Global Online Network Lets Health Professionals Share Expertise
How to Design a Bundled Payment Around Value
Providing High-Quality Health Care to Americans Should Trump Politics

Make Yourself Safe for Sponsorship

It’s not uncommon for today’s rising stars to align themselves with high-powered individuals in order to fast-track their careers — and in fact, it’s recommended. But sometimes, it’s not so simple. According to my research, 95% of men and 93% of women say they find it easiest to give and receive guidance in a one-on-one setting. Yet 64% of senior men (vice president and above) and 50% of up-and-coming women admit they’re hesitant to initiate any sort of one-on-one with each other lest their motives be misconstrued by their colleagues and rumors start poisoning the workplace. This may come as a shock to the many men and women who thought they left this sort of gossip in high school, but unfortunately, it still exists. And it hurts ambitious women’s chances for promotion. This post will focus on what a protégé can do to protect herself; tomorrow, we’ll identify what high-powered sponsors can do as well.

Consider the example of a woman we’ll call Jana. Soon after she had been promoted to vice president at a major financial services firm, Jana became aware that her boss was holding regular meetings with the four other VPs (all men) at his home over barbecued ribs and beer. “He invited them but excluded me,” she said, “and then they’d all lie to me at work about where they’d been that weekend.” Months went by. Finally, she was issued an invitation — and immediately spotted the problem. “Here I was, a youngish woman out on the pool deck with the guys, with my boss’ wife hovering in the kitchen, peering out at us.”

Jana could see how difficult it was for her boss to include her in any informal work gathering outside the office. But by excluding her, he signaled to the rest of the management team that she was not “inner circle.” She knew full well, too, that the men had developed a special camaraderie by meeting like this and that she had lost out on the trust built up over months.

Today, Jana is a managing director, two reports away from the CEO, but she feels her rate of progression suffered because she had no sponsors. The reason for her lack of sponsorship? She could not figure out how to mitigate the risk of career-wrecking rumors for her male superiors. “There were men I reported to who wouldn’t get into a cab with me, who wouldn’t allow their admin to schedule them on the same flight,” she recalled. “Looking back, I think this is what kept me always just outside the inner circle. I had a couple of near misses with sponsorship, but in the end, my bosses just couldn’t afford to go there with me.”

Sexual tension in the workplace is a problem that’s not going to go away — ever. As long as men and women work closely together, sex lurks as a possibility. With longer hours now the norm — a survey found that two-thirds of men and women, especially senior and middle managers, are spending more time at work than three years ago — men and women are putting in even more hours away from home and family, making less time for an emotionally satisfying life outside of work and adding to the pressure to develop one at the office.

But whether a sexual relationship with a superior is real or imagined, it’s the fastest way to sabotage sponsorship — now and in the future. That presents a tough conundrum. How do you make yourself safe for sponsorship?

Always telegraph professionalism. Take notice of your appearance. Appear polished, but not provocative; 73% of leaders surveyed for the Center for Talent Innovation’s research on executive presence cite provocative clothing as the number one appearance blunder for a woman attempting to climb the career ladder. This is not to suggest that you lose your personal style in the workplace. But it’s imperative that your clothing, makeup, hairstyle, body language, and communication style don’t give the wrong impression.
Meet your sponsor in public. Bagels and coffee in the conference room, lunch on campus, or a restaurant well-trafficked by office personnel where you can take the opportunity to wave to colleagues and demonstrate that you have nothing to hide — these are safe choices. Dinner on a business trip may be unavoidable, but make sure the venue isn’t the kind of place you’d ever go on a date. Ideally, you want to make meeting with your sponsor a routine, choosing the same time and place time and time again. Regularity ensures that nothing will appear irregular about meeting your sponsor one-on-one.
Don’t hide your private life. Talk about your significant others — spouse, partner, kids — and introduce these people to your sponsor. Publicize your outside commitments to church or temple, athletic league, or community organization. Put photos on your desk or screensaver that assure others you have a network of emotional ties outside work. By doing so, you’ll telegraph the completeness of your private life and tamp down the threat of an ulterior agenda.
Silence gossip by proving that you’re special. When people complain that you’re receiving special attention, they’re insinuating that you don’t deserve it. Acting surprised or super nice only reinforces their belief that you’ve got something to hide. Squelch those rumors by wowing everyone with the quality of your work, the extra hours you’re putting in, and the special skills you contribute. In a word, own your special status and demonstrate why you deserve it.

Sponsorship is vital to fulfilling your potential, turbocharging your career, and delivering your dreams. During economic downturns and corporate restructuring, it’s often the only thing between you and the door. So strengthen your career springboard — and your safety net — by making yourself safe for sponsorship.

Stop the Fear-Mongering About Default

Stop, stop it now. Don’t ever say it again.  Do not mention U.S. government debt and the word default in the same sentence.   The correct statement is that the U.S. government will not default on its debt, not now, not in the foreseeable future, not ever.

A Congressional refusal to raise the debt ceiling is analogous to cutting up your credit cards.  It would force the U.S. government to stop additional borrowing and limit spending to the revenue it takes in. The government would be forced to live within its means, something that many states and individuals currently do.

Note, for fiscal 2013 the U.S. government will have collected approximately $2.8 trillion and spent about $3.5 trillion.  Going forward without an increase in the debt ceiling means cutting expenditures back by 20% (or somehow generating 25% more revenue).  Clearly this would be a major event.  Maturing debt could be repaid by issuing new debt in the same amount — so this would not change the total debt outstanding and not affect the debt ceiling.  Thus there should be no risk that debt won’t be paid upon maturity.

No increase in borrowing (for some short period of time until Congress does raise the debt ceiling) means the President and Congress will have to decide which entitlements and/or government services to stop funding.  It should be inconceivable that the US would decide to stop making interest payments on the U.S. government debt.   There is ample revenue to pay for interest on the debt.  If there is any question about paying interest as it comes due, Congress and the President should act now to remove this question once and for all.

This then leaves the President with very painful decisions.  Should the government delay payments (paying the bills in the order they arrive as revenues arrive), reduce (or eliminate) specific programs, enact across-the-board cuts, or introduce higher fees for certain services.  The U.S. could also choose to sell assets (gold, oil, mineral rights) or the right to provide and charge for certain services (toll roads).

Clearly the President does not want to do any of this.  Few people want to cut back on expenditures or tell a loved one they must do so.  Handing out money is much more fun than refusing to do so.  However, this is what the budgeting process is all about.  This is what it means to be fiscally responsible.  Easy credit, greatly helped by the Fed’s quantitative easing, has allowed the U.S. government to avoid any sense of fiscal responsibility.

Capping the amount of debt someone can borrow forces a start to fiscal responsibility.  Doing so at this time in the U.S. will cause great pain and is likely to put the U.S. into another recession (which is why the debt ceiling should be raised).  But it should be made clear that it will not, under any imaginable scenario, cause the U.S. government to default on its debt.  So please Mr. President (and all others in the government and media), stop saying it might and make it very clear that the U.S. will not, under any circumstances (including a cap on the debt limit), fail to honor its debt obligations.

One last thought:  I do not understand, other than venal politics, the reason to close cash-positive government services.   For example, certain national parks like the Grand Canyon generate more cash from entrance fees and permits (at least at this time of year) than the cost to run the parks (what the government pays the park rangers).  Even worse, closing the parks causes the government to lose all the revenue (and it won’t be made up later) while the costs still accrue (they are not paying it now, but they will almost certainly pay the park rangers for the time closed once the service is restored).  This makes no sense as it hurts visitors to the parks, hurts surrounding businesses, and turns a cash-positive government service into a cost.

Leisure-Time Inventions Hit a Peak in Middle Age

Employees’ likelihood of inventing something for their jobs during leisure time – such as while talking a walk or a bath – rises to a peak at age 51, on average, according to a study led by Lee N. Davis of Copenhagen Business School in Denmark. In an analysis of thousands of European patents, the researchers theorize that by the time invention-minded employees reach middle age, they tend to be in management, and their busy schedules force them to do their creative thinking during free hours. After 51, greater detachment from inventive tasks could be the reason for declining free-time invention. 6% of the inventions in the study arose during leisure time.

How Good Management Stifles Breakthrough Innovation

We hear a lot these days about how big companies fail to innovate, but the truth is more complicated. A lot of companies excel at developing better products, yet these improvements are incremental. They’re not the breakthrough offerings that can jump-start growth and profitability. And companies’ success at cranking out these enhancements hampers them from getting better at the radical projects.

If you closely analyze unsuccessful attempts at developing breakthrough products, perhaps the most common trouble you find is not one of the usual suspects, such as lack of top-management commitment. Instead, you’ll see that efficiency-minded project managers are inadvertently discouraging the explorations – and therefore the learning – that make radical ideas practical.

There’s a history behind this problem. Frustrated by inefficient R&D, companies in the 1980s started applying standard project-management techniques such as phase-gates and key performance indicators. Textbooks on innovation advised them to allow some flexibility in the phase-gates. Yet control-minded project managers have tended to chart strongly linear paths that discourage distractions – depriving their teams of the agility and openness needed for new thinking. As development teams became more productive and their initiatives more predictable, incremental improvements soared, project managers got promoted – and radical innovation declined.

Companies soon began spending less and less time on breakthrough ideas. At BCG we’ve found that radical projects nowadays account for roughly 10% of an average company’s innovation portfolio, down from twice that in the early 1990s. (Josh Lerner cites the narrow focus of corporate R&D in his October HBR piece on corporate venturing.)

The lesson is clear. It’s not enough for executives to proclaim their commitment to innovation, develop an innovation mind-set, or even put more money into breakthroughs. Companies also need to make changes at the ground level.

They can start by treating radical projects differently, but it isn’t enough to just let these teams loose. Without some discipline, initiatives will become money pits, or nervous project managers will fall back on their conventional habits of control.

The solution is for project managers to devote less effort to predicting and directing innovation, and more effort to managing the inevitable uncertainties. They should worry less about the schedule and more about ways to reduce risk – by partnering with outside companies, say, or getting advance commitments from customers. Or they can invest in multiple options for the marketplace, rather than rushing through a single big bet.

They should certainly expand the key performance indicators to include vital insights on technology or customers, so that a worthwhile project can keep going even if it is far from a serviceable prototype. But like venture firms, they need to terminate projects that exceed a predetermined “affordable loss.” (For more on the framework BCG has developed, see this paper.)

Take, for example, a photo-technology company my colleagues and I worked with. Digital printing promised to greatly expand the designs of ceramics, furniture, and other nonpaper products, and the company hoped to pioneer the sale of industrial printers in these sectors. Its first printer was a dud, so the company rethought its efforts, creating a new development team that included marketing people as well as engineers. With this broadened perspective – and the time to explore how customers would actually use this new technology – the team realized that usage would vary greatly across industries. The project manager recognized the insight and secured funding to develop multiple kinds of printheads and other functionality. Those steps improved the likelihood of marketplace acceptance, and the resulting printer quickly won over buyers.

The combination of flexible techniques and a manager who tolerates uncertainty created something that’s increasingly rare and valuable these days: a radically new product that creates a whole new market space.

Executing on Innovation

An HBR Insight Center




Capturing the Innovation Mind-Set at Bally Technologies
Good News, Bad News: An HBR Management Puzzle on Innovation Execution
Why Conformists Are a Key to Successful Innovation
Implementing Innovation: Segment Your Non-Customers

Understanding the Game Being Played in Washington

Some portray it as a Manichean struggle between good and evil. Warren Buffett says it’s “extreme idiocy.” I’d like to recommend another way of looking at the government shutdown and the looming battle over the debt ceiling in Washington. It’s a game, played by flawed-but-not-crazy human beings under confusing circumstances. In other words, it’s an interaction among “agents” who “base their decisions on limited information about actions of other agents in the recent past, and they do not always optimize.”

That quote is from economist H. Peyton Young’s “The Evolution of Conventions,” one of several works of game theory I plowed my way through this week in an attempt to find a way to think about the government shutdown and looming debt ceiling fight that didn’t make me want to bang my head against a wall. My reading made the dynamics at work in Congress and at the White House a bit clearer — and thus slightly less maddening, if not less ominous.

The debt-limit game

There are lots of different games being played in Washington at the moment, but the main one I have in mind pits the Democratic White House and Senate against the Republican House of Representatives over the federal budget. The deadlocked players have already landed us in a partial government shutdown, but it’s the 18th since 1976 and thus really not that big a deal. The far bigger stakes involve the federal borrowing limit that is due to be breached in a couple of weeks if Congress doesn’t approve an increase. Without further borrowing, much higher taxes, or draconian spending cuts — none of which may be possible or even legal on short notice — the government might not be able to service its existing debts, leading to a default. Congress has never allowed this to happen, so the consequences are unknowable, but they could be really bad.

Threatening to cause something really bad to happen in order to get your way is a negotiation tactic known as brinkmanship. Here’s a description from game theorist Thomas Schelling, in his 1960 classic The Strategy of Conflict:

If I say “Row, or I’ll tip the boat over and drown us both,” you’ll say you don’t believe me. But if I rock the boat so that it may tip over, you’ll be more impressed.

Not all brinkmanship is seen as acceptable. If a member of Congress showed up in the Capitol with a bomb and threatened to blow the place up unless his colleagues agreed to name a post office after him, he’d surely end up dead or in jail. The debt limit, originally written into law during World War I and raised many, many times since, has often played a role in budget negotiations, and been the subject of much political posturing through the years. But no majority party in the House or Senate appears to have seriously threatened not to increase the ceiling when needed before 2011. That year, a new GOP majority in the House used the threat of a debt ceiling breach to force a number of concessions on government spending, and since then debt-limit brinkmanship has been a recurring feature of the Washington scene.

Democrats and commentators of varying political leanings have argued that by putting the debt ceiling in play the GOP is effectively breaking the rules of the game. They’re right that such behavior hasn’t been the norm. But the don’t-push-it-too-far-with-the-debt-ceiling convention is, like most political norms, subject to revision. With a few Constitutionally determined exceptions (and even those are of course subject to repeated reinterpretation), the rules of political conduct in the U.S. change over time, not in a smooth progression but along a path of punctuated equilibrium. That notion was imported from evolutionary biology (where it’s not entirely uncontroversial) into political science in 1993 by Frank Baumgartner and Bryan D. Jones, with the book Agendas and Instability in American Politics. In this account, politics is usually in equilibrium, with the rules clear and the opportunities for change few. But things can change, and when they do it usually happens quickly.

Trial and error

In game theory, which had long been dominated by the idea that games tended toward a single, rational equilibrium result (a “Nash equilibrium,” for you Beautiful Mind fans), similar notions began bubbling up in the 1990s. If the players in today’s Washington were all perfectly rational and oozing with foresight — or, better yet, could repeat the debt-ceiling game a few hundred times, switching positions from time to time and experiencing the consequences — they would probably settle into a long-run equilibrium that didn’t involve brinkmanship. But real people aren’t perfectly rational, and they usually don’t get to keep playing games until they’ve got them down pat. Instead, they proceed by “trial-and-error … without having any clear understanding of the strategic realities of the game they are playing,” game theorists John Gale, Kenneth Binmore, and Larry Samuelson wrote in 1995. “They simply learn that certain stimulus-response behaviors are effective.”

This paper, and other work by Binmore and Gale in the 1990s, was an attempt to explain the results of the Ultimatum Game, a bargaining experiment first conducted in the early 1980s by economists Werner Güth, Rolf Schmittberger, and Bernd Schwarze that bears some similarities to the current debt-ceiling quandary. In the Ultimatum Game, the proposer decides how to divide a sum (in the original experiment it varied between four and 10 German marks) between himself and a respondent. If the respondent accepts the share he is offered, both get to keep the money; if the respondent rejects the offer, neither player receives anything.

Economists had argued that the equilibrium result of this game is one in which the proposer offers the respondent a penny (or a Pfennig), and the respondent accepts (because a penny is better than nothing). When people played the game in experimental economics labs, though, things didn’t work out that way. As Richard Thaler described in his “Anomalies” column in the Journal of Economic Perspectives in 1988 (highly recommended: the 1994 compilation of these columns titled The Winner’s Curse), proposers offer 50-50 splits more often than any other allocation, and offers below about a quarter of the total tend to be rejected.

One interpretation of this is that real people care a lot more about fairness than the self-interested “economic man” of the textbooks does. Another, explored by Gale, Binmore, Samuelson, and others, is that we are self-interested but not all-knowing. Humans seldom make optimal choices, but we do learn, from playing the game and from similar experiences in life, what we can get away with. It’s an evolutionary process — one that, if repeated enough times under exactly the same circumstances might lead to an optimal result but under more realistic conditions is more likely to oscillate between different norms/conventions/equilibria.  “If … the players sometimes experiment or make mistakes,” wrote H. Peyton Young, whom I cited at the beginning of this piece, “then society occasionally switches from one convention to another.” I don’t get the sense that anyone has figured how to build this realization into a reliable predictive model — no game theorist is going to be able to tell you with great confidence how the budget standoff will play out. But the very exercise of looking at the current showdown as a game in which the players have limited knowledge but are able to learn illuminates a lot.

Let’s consider what House Republicans have learned from their two years of debt-limit brinkmanship. They have learned, first of all, that it works. They got the White House to agree to a bunch of automatic spending cuts (the sequester) in 2011, and then in early 2013 they were able, from what seemed to be an exceptionally weak bargaining position after President Obama’s reelection, to keep most of the Bush-era tax cuts from expiring and to force yet another debt-ceiling battle only a few months later. More broadly, Republican office-holders and activists have learned over the past couple of decades that making what at first sound like unreasonable demands (no new taxes, no gun control) and repeating them for years on end can actually shift the terms of the debate to the point where the demands seem normal. It has been a successful strategy.

There have been downsides to the GOP’s debt-ceiling brinkmanship. It was a drag on economic growth, for one thing, but that’s pretty distant and diffuse and hard to prove. More tangibly, it also probably played a role in the Republicans losing six seats in the House and failing to unseat President Obama in the 2012 election.

From the perspective of the 30-odd hardline members of the House GOP that for the sake of convenience I’ll call the Tea Party, though, this wasn’t actually bad news. Their districts tend to be pretty safely Republican, so their jobs aren’t at risk. A smaller Republican majority in the House increases their leverage within the caucus. And in part because Republicans controlled the redistricting process in most states after the 2010 census (a byproduct of the anti-Democrat backlash in the 2010 elections), they don’t have to worry much about the GOP losing its House majority soon. As for Obama’s victory over a Republican nominee the Tea Party never fully embraced, that wasn’t the worst thing in the world either — it certainly helps with fundraising and energizing the base. So while it has become popular to label the Congressional Tea Partiers, and their seemingly increased zeal after a lost election, as “crazy,” most of their behavior can be pretty readily explained by self-interest and learning from recent experience.

For Speaker John Boehner and most of the rest of the House GOP, the loss of seats and failure to unseat Obama was bad news. But Boehner is now playing such a complex game, with the White House, the Senate, and a big chunk of his own delegation his adversaries at least some of time, that the 2014 election must seem awfully far off. All he’s trying to do is survive to fight another day.

Finally, for President Obama and Senate Majority Leader Harry Reid, the lesson from the last two years is that negotiating over the debt ceiling is a loser’s game. Every time they accede to House Republican demands, the GOP comes back a few months later demanding more — even after a clear election loss. So it shouldn’t be surprising that Obama and Reid might be willing to risk economic calamity in order not to have to submit to such blackmail again.

Put all this together, and it looks like we have the makings of a train wreck. It also looks like it’s probably up to Boehner to avert it, which he appears to acknowledge. But that’s not as reassuring as it might sound when you consider how unstable the tactical ground is upon which he stands. So, that’s depressing.

Room for negotiation

But looking at the short-term interests of the different players, as opposed to their stated goals, does open up opportunities for negotiation and cooperation. When you focus on others’ interests, rather than their passions, you’re far likelier to be able to predict their behavior and to come to some sort of accommodation with them. I got that idea from the 17th and 18th century thinkers quoted in Albert O. Hirschman’s The Passions and the Interests, but I think it’s a major theme of the negotiation bible Getting to Yes as well. I definitely know that, as somebody who has on occasion been driven to indignation by the statements of the Tea Partiers, the simple act of writing the last few paragraphs has significantly lowered my outrage level and increased my empathy with them (if not necessarily sympathy for them).

Determining just what the opportunities for negotiation and cooperation might be isn’t so easy, of course. The most obvious commonalities of interest involve President Obama and the Tea Party — the Tea Party owes its very existence to Obama’s presidency, while he owes the current unity of the Democratic Party and possibly his 2012 reelection to the Tea Party. But it’s hard to see how to translate this into deals. Would fire-breathing Georgia Republican Paul Broun trade a vote to raise the debt limit for an Obama promise to come to his district and loudly condemn him on the day before the next Republican primary? Probably not.

Still there must be room for horse trading somewhere. And it’s much more likely to be discovered if the different players actually talk to each other. I’ve been dubious of the frequent calls for more face-to-face contact between the two sides in Washington (more “schmoozing,” as Jack and Suzy Welch argued the other day). But the lesson from game theory is that yeah, schmoozing can help.

The reason is that if the players in a game don’t or can’t talk to each other about what they’re doing, they have to fall back on trial-and-error and the prejudices and misconceptions they held going into the game. To go back to Schelling, whose work in the 1960s and 1970s prefigured much of modern economic thinking about games: “Excessively polarized behavior may be the unhappy result of dependence on tacit coordination and maneuver.”

You Can Win Without Differentiation

For decades, strategy gurus have been telling firms to differentiate. From Michael Porter to Costas Markides and through the Blue Oceans of Kim and Mauborgne, strategy scholars have been urging executives to distinguish their firm’s offerings and carve out a unique market position. Because if you just do the same thing as your competitors, they claim, there will be nothing left for you than to engage in fierce price competition, which brings everyone’s margins to zero – if not below.

Yet, at the same time, we see many industries in which firms do more or less the same thing. And among those firms offering more or less the same thing, we often see very different levels of success and profitability. How come? What explains the apparent discrepancy?

To understand this, you have to realise that the field of Strategy arose from Economics. The strategy thinkers who first entered the scene in the 1980s and 90s based their recommendations on economic theory, which would indeed suggest that, as a competitor, you have to somehow be different to make money. Over the last decade or two, however, we have been seeing more and more research in Strategy that builds on insights from Sociology, which complements the earlier economics-based theories, yet may be better equipped to understand this particular issue.

Consider, for example, the case of McKinsey. Clearly, McKinsey is a highly successful professional services firm, making rather healthy margins. But is their offering really so different from others, like BCG, or Bain? They all offer more or less the same thing: a bunch of clever, reasonably well-trained analytical people wearing pin-striped suits and using a problem-solving approach to make recommendations about general management problems. McKinsey’s competitive advantage apparently does not come from how it differentiates its offering.

The trick is that when there is uncertainty about the quality of a product or service, firms do not have to rely on differentiation in order to obtain a competitive advantage. Whether you’re a law firm or a hairdresser, people will find it difficult – at least beforehand – to assess how good you really are. But customers, nonetheless, have to pick one.  McKinsey, of course, offers the most uncertain product of all: Strategy advice. When you hire them – or any other consulting firm – you cannot foretell the quality of what they are going to do and deliver. In fact, even when you have the advice in your hands (in the form of a report or, more likely, a powerpoint “deck”), you can still not quite assess its quality. Worse, even years after you might have implemented it, you cannot really say if it was any good, because lots of factors influence firm performance, and whether the advice helped or hampered will forever remain opaque.

Research in Organizational Sociology shows that when there is such uncertainty, buyers rely on other signals to decide whether to purchase, such as the seller’s status, its social network ties, and prior relationships. And that is what McKinsey does so well. They carefully foster their status by claiming to always hire the brightest people and work for the best companies. They also actively nurture their immense network by making sure former employees become “alumni” who then not infrequently end up hiring McKinsey. And they make sure to carefully manage their existing client relationships, so that no less than 85 percent of their business now comes from existing customers.

Status, social networks, and prior relationships are the forgotten drivers of firm performance. Underestimate them at your peril. How you manage them should be as much part of your strategizing as analyses of differentiation, value propositions, and customer segments.

Multitasking Makes Managers Less Thoughtful

Managerial Omelet Anyone? How Interactive Media Can Scramble Your Brain Strategy + Business

You’re sitting at a meeting checking your e-mail on your iPad or your texts on your phone. Or, if you’re like the average college student, your attention is divided at least three ways, among the lecturer, your laptop, and your text messages. You think you’re keeping up with it all, but new research from Stanford says you’re not. Studies from Clifford Nass's Communication Between Humans and Interactive Media Lab clearly indicate that those who engage in media multitasking are unable to ignore irrelevant information and have difficulty identifying which information is important. Even watching that stream of type crawl across your television screen during the evening news makes you less likely to retain information from either the program or the crawl. Media multitasking makes managers less thoughtful and more inclined to exercise poor judgment, Nass says. And companies that encourage people to respond instantly to e-mail make the problem worse. At the very least, managers should insist that employees bring no electronic devices to meetings. —Andrea Ovans

Getting the VaporsKodak Moment The Economist

With the European Parliament set to vote next week on whether electronic cigarettes should be regulated as medical products, this is a good time to reflect on the inroads this disruptive technology is making in the slow-moving, not-very-innovative tobacco industry. While smoking is declining in most developed countries, "vaping" is on the rise (in e-cigarettes, a nicotine solution is vaporized — thus the verb). An estimated 7 million people use e-cigs in Europe alone, and sales in the States may triple this year. One analyst says they could outsell cigarettes within a decade. Which some think would be a good thing, from a health standpoint. But will regulators in Europe and the U.S. (the FDA is expected to propose restrictions soon) allow this juggernaut to keep rolling? UK e-cig advocate Clive Bates hopes so: "The market is producing, at no cost to the taxpayer, an emerging triumph of public health." —Andy O’Connell

Because No One's Telling Them They Should Be There Why Are There Still So Few Women in Science?New York Times

Before starting her career as a creative writer, Eileen Pollack was one of the first women to earn a BA in physics at Yale, graduating summa cum laude in 1978. So why didn't she further her education in the subject? Using her own story as an example, Pollack explores the many reasons women still aren't widely represented in the top echelons of science, an issue that becomes even more pressing as STEM becomes shorthand for the future of economic success worldwide. In short, particularly in the United States, it comes down to culture: From high school on, girls and women are receiving signals that science and math aren't cool or viable options. Stories abound about it being a tough life, an assertion Yale astronomer Meg Urry responds to with a succinct "Oh, come on." Pollack says we need to stop losing girls “to their lack of self-esteem, their misperceptions as to who does or doesn’t go into science, and their inaccurate assessments of their talents." 

Let Innovators InnovateMedical Innovation: When Do the Costs Outweigh the Benefits? Knowledge@Wharton

Ugh. Health-care costs. One reason your premiums are so high is that your insurance company had to pay top dollar for the scary-looking piece of robotware that removed that thing from that embarrassing part of your body. Should the insurance company refuse to pay for such things and insist that your doctor go back to doing it by hand with a sharp knife? No, says Guy David, a Wharton professor of health-care management. Any initiative to limit payments for innovative technologies would have unintended consequences — such as effectively killing the development of the truly high-value inventions that shorten procedures, save lives, cut costs, and reduce errors. "If you curtail anything, you’re never going to get to the high-value innovation,” he says. —Andy O'Connell 

Take Your Pick Challenging the Bing-It-On ChallengeFreakonomics

Oh, the perils of using questionable data in your major ad campaign. In this fascinating takedown (which I first discovered on Slate), economist and Yale Law School professor Ian Ayres takes Bing's assertion that people prefer Bing "nearly 2:1" — a claim he initially thought was implausible – and tries to prove his hunch. Ayres and his students found two elements of Microsoft's research problematic: The company surveyed only 1,000 participants, and it refuses to release the results of its online "Bing-It-On" challenge, which more than 5 million people have taken. So Ayres and co. set up a survey similar in size to Microsoft’s and found that "53 percent of subjects preferred Google and 41 percent Bing (6 percent of the results were 'ties')."

Ayres cheekily suggests that Google might have a legal case against Microsoft. Bing's behavioral scientist, for his part, issued a response and rebuttal. Matt Wallaert explains why the company stopped using the "nearly 2:1" phrase in its marketing material and defends the company's research methods. 

BONUS BITSThose Other Things That Happened This Week

The FBI and the Legitimation of the Bitcoinverse (Reuters)
How to Quit in Front of An Audience of 11 Million (Quartz)
Obamacare: The User Experience (Businessweek)

The Cure for Self-Inflicted Complexity

The collective belief that complexity is on the rise is largely an illusion. We’ve inflicted it on ourselves by our primary method of dealing with the complexity that has always been an inherent part of our world. As I’ve argued previously, we attack dynamic complexity by minimizing detail complexity, and thus divide the world into numerous deep knowledge domains – which in turn generates a disquieting level of inter-domain complexity.

This of course begs the question: is this self-inflicted inter-domain complexity a problem? Should we be worried about it?

Because we are notably bad at dealing productively with the inter-domain complexity that we have created, I think it is indeed a problem. Ironically, we are crummy at dealing with it because of the predominance of narrow knowledge siloes – which are of course the self-same knowledge siloes that created the inter-domain complexity in the first place. Kafka would be impressed!

Inter-domain complexity challenges us whenever a hospital patient has co-morbidities (heart and liver problems for example), or a business problem spans marketing and finance, or a political problem bridges foreign relations and domestic economics. The specialists who focus on heart, liver, marketing, finance, foreign relations, and domestic economy frame the problems using their tools, models, and language systems because that is what they know and that is where their confidence lies. It is hard for them to un-frame what they have framed or un-see what they see.

It is not impossible. It is just hard. Typically, every bit of their formal and informal education has taught them to sacrifice detail complexity – to narrow problems to facilitate analyzing them. They don’t actually know how to take two opposing frames, models, and diagnoses, and do something useful with them. In fact, the more expert they are, the less likely they are to ever have done so – even once in their life. So they stick assiduously to something at which they are terrifically good: being narrow, and confidently so.

Furthermore, they tend not to suffer any personal downside from taking a narrow perspective. The heart surgeon doesn’t get blamed if the patient’s liver failed due to the stress of surgery. The marketing executive doesn’t get blamed if the finance executive failed to come up with the capital necessary to fulfill the marketing executive’s grand plans.

Net, there is little training and few rewards for dealing productively with inter-domain complexity.

Were there no heart, liver, marketing, finance, foreign relations, or domestic economy experts, we wouldn’t face inter-domain complexity or the associated problems. However, we would face lots of detail and dynamic complexity. The world is not entirely crazy. There is a reason to specialize in order to try to cut into dynamic complexity, to try to tease out cause and effect relationships and advance our knowledge in various domains.

The key, as with so many things in life, is to get beyond either/or. To move our understanding of the world forward, we need to tackle both detail complexity and dynamic complexity. We don’t want to operate with one gigantic knowledge domain in which our ability to advance knowledge is ponderously slow. But by the same token, we don’t want innumerable knowledge domains that slice and dice our world into such little and incompatible pieces that we advance knowledge that isn’t really powerful for our lives.

I believe that the solution to the self-inflicted problem of inter-domain complexity is the development of a meta-domain: the domain of knowledge about how to integrate across knowledge domains. While this might seem on its face to be an esoteric or even unapproachable knowledge domain, it really isn’t either. There are techniques for tackling fully clashing models from different knowledge domains.

More importantly, these techniques can be taught, though masters of individual knowledge domains tend to fight against the notion that anybody not steeped in their frames, models, and tools can deal with their domain in any useful way.

Perhaps most excitingly, these techniques for dealing productively with inter-domain complexity can be taught to children. In our I-Think initiative at the Rotman School, we’re teaching even elementary school children how to wade confidently into and resolve inter-domain conflicts.

These young people have a blessed characteristic not shared by their adult counterparts: they don’t think what they are doing is strange; they think it is just plain sensible. If we train enough of them, I think we’ll see many positive changes in the years to come. Among them will be a common sense that complexity is dropping, not rising.

This post is part of a series of perspectives leading up to the fifth annual Global Drucker Forum in November 2013 in Vienna, Austria. For more on the theme of the event, Managing Complexity, and information on how to attend, see the Forum’s website.

A Global Online Network Lets Health Professionals Share Expertise

Dr. Junior Bazile, a Haitian physician, scrolled through his handheld device while walking through the wards of a district hospital in rural Malawi. He had recently commented on a discussion on GHDonline.org regarding critical gaps in the diagnosis and treatment of drug resistant tuberculosis. Hours later, he was reading detailed replies from a tuberculosis advisor in Azerbaijan and a medical officer at the World Health Organization. They shared recent publications and discussed the best strategies for how to ensure that patients are treated swiftly and their families and communities protected.

Five years earlier, providers like Dr. Bazile across the globe had a plethora of “how” questions: How do you diagnose recurrent tuberculosis? How do you design team-based care? How can community health workers extend care into the home? How do you design a hospital? But there was no means to obtain answers.

In response, our team at the Global Health Delivery Project at Harvard launched an online platform to generate and disseminate knowledge in health care delivery. With guidance from Paul English, chief technology officer of Kayak, we borrowed a common tool from business — professional virtual communities (PVCs) — and adapted it to leverage the wisdom of the crowds.  In business, PVCs are used for knowledge management and exchange across multiple organizations, industries, and geographies. In health care, we thought, they could be a rapid, practical means for diverse professionals to share insights and tactics. As GHDonline’s rapid growth and success have demonstrated, they can indeed be a valuable tool for improving the efficiency, quality, and the ultimate value of health care delivery.

The Launch

Creating a professional virtual network that would be high quality, participatory, and trusted required some trial and error both in terms of the content and technology. What features would make the site inviting, accessible, and useful? How could members establish trust? What would it take to involve professionals from differing time zones in different languages?

The team launched GHDonline in June 2008 with public communities in tuberculosis-infection control, drug-resistant tuberculosis, adherence and retention, and health information technology. Bowing to the reality of the sporadic electricity service and limited internet bandwidth available in many countries, we built a lightweight platform, meaning that the site minimized the use of images and only had features deemed essential.

As access to high-speed internet and handheld devices increased, new features were gradually added to include photos and video data. To foster reliability and engagement, the team decided that activity on the site would be transparent (i.e., there would be no anonymous postings) and moderators would lead the communities. They would stimulate and ensure quality discussions in the communities by reviewing GHDonline’s content daily for precision and accuracy. (We recruited over 30 experts to serve in that role.) The public could read the discussions and posts but only those who signed up could contribute to discussions. Members would sign up at no cost and would create a profile with their name, professional background, and optional photo.

Soon after the launch, a researcher in South Africa asked the tuberculosis community about the protocol for sputum induction — a procedure for diagnosing TB — in outdoor settings. In less than a week, over 20 experts from four continents shared their insights. The researcher followed the suggestions in building her facility’s new outdoor structure for sputum induction.

Even with early successes in terms of membership growth and daily postings to communities, user feedback and analytics directed the team to simplify the user navigation and experience. Longer, more nuanced, in-depth conversations in the communities were turned into “discussion briefs” — two-page, moderator-reviewed summaries of the conversations. The GHDonline team integrated Google Translate to accommodate the growing number of non-native English speakers. New public communities were launched for nursing, surgery, and HIV and malaria treatment and prevention. You can view all of the features of GHDOnline here (PDF).

Growing Participation

These improvements helped attract more participants: As of July 2013, GHDonline hosted 10,000 expert members — engineers, researchers, architects, policymakers, advocates, pharmacists, community health workers, physicians, managers, midwives, program officers, nurses, and social workers — across 170 countries and 10 public communities.

In addition to public communities, GHDonline launched private communities to accommodate global health groups with select membership, including time-limited working groups. As of July 2013, there were 50 private communities.

One, Clinical Exchange, which was launched in 2009 to link Rwandan physicians to Boston-based specialists, has proven incredibly valuable for improving health care delivery. A physician in Rwanda can log onto the GHDonline.org clinical exchange community via the web or send an e-mail to clinical@ghdonline.org to respond to or post a new case in the community. The physician can upload or attach photos of rashes, x-rays, CT scans, or videos.

All members subscribe to instant notifications of activity in the community or to daily or weekly digests. Community moderators select the instant notifications so they can ensure a specialist responds to clinicians in a timely fashion. All members agree to de-identify patients and follow HIPPA guidelines. Images are reviewed by the appropriate subspecialist. Radiologists post readings and formulate curriculum for general practitioners on common radiological findings. Each question that is asked and answered is archived in the community, thus generating an information and image library for training.

A member of the Clinical Exchange community posted a thorough patient history, physical-exam findings, and lab results for second opinions on a 56-year-old male presenting with a history of urinary retention, weight loss, and impotence. Within 20 hours, five clinicians from various specialties had responded. All the Boston and Rwandan doctors agreed on a diagnosis of multiple myeloma and recommended steroid palliation, a drug regimen, and steps for stabilization. As the patient’s condition improved, the doctor who started the discussion in the community submitted updates for members of the community and received further guidance.

Members and moderators have discussed hundreds of clinical cases and have shared over 400 resources, impacting clinical decision making in Haiti, Rwanda, and Malawi. Participating physicians in Boston have grappled with cases of leprosy and neglected tropical diseases and the complexities of end-of-life care.

Adapting to Demands

Unlike a static web page, the GHDonline platform can iterate on content, add discussions, and bridge expertise to respond to the changing landscape of health delivery. For example, after the earthquake in Haiti on January 12, 2010, GHDonline opened a new community to link organizations involved in the emergency response and local organizations in Haiti. In April 2010, the GHDonline team organized a virtual panel in the Health IT community and invited experts to discuss the data and technology needed to rebuild health systems in Haiti.

The success of this panel led to a series of “expert panels” — virtual, asynchronous, one-week conferences convening professionals across specialties to discuss pressing issues in health care delivery — and attracted panelists such as Rwanda’s minister of health and the director of the largest HIV clinic in the United States. (Here’s a list of panels). The increasing access to high speed Internet and mobile devices and applications has also facilitated the success of GHDonline.

Professional Development

As GHDonline.org has improved care for patients, it has also increased professional development and leadership opportunities for members who otherwise might be working in isolation. For example, Dr. Bazile began reading GHDonline daily in 2010. Since then, he progressed from a frequent consumer of community discussions to an active GHDonline user and educator across communities. (Here’s a biography of Dr. Junior Bazile and a graphic of his development as a GHDonline member).

GHDonline’s virtual communities have led to the creation of a broad knowledge base and a professional network. As its progress has demonstrated, virtual networks are ideal mechanisms to create and disseminate the next generation of tools and tactics to generate value for patients and populations.

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

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