Generative Board Leadership—Preparing for the Critical Decisions During Transition to Health-Care Reform
September 16, 2010

With the looming phase-ins of the various provisions of the Patient Protection and Affordable Care Act, many health-care organizations will be drawn into the reactive pressure of rapidly formulating strategic, structural, operational, and financial plans. Boards, in particular, will be highly focused on the urgency of their strategic and fiduciary responsibilities. Unfortunately, many will fail to fulfill their generative responsibility and leadership role. Those who succeed will do so by asking the right questions in forming their generative thinking to shape the future path of their organization.

Generative leadership and governance is foundational and prerequisite to making well-reasoned board decisions.  Moreover, generative leadership is particularly important during the many potential “paradigm” shifts that occur in health care—and that will likely be catalyzed by health-care reform.  As defined by authors Chait, Ryan, and Taylor in their book, Governance as Leadership —Reframing the Work of Nonprofit Boards, generative thinking is the early cognitive process of forming the logical/rational frameworks and contexts for thinking about areas such as mission, strategy, and finance.1  These frameworks then form the perspectives, assumptions, and sense of “meaning” which are the starting points for other decision processes.  Ideally, the board engages in its own generative process (which requires process, time, and facilitation), and management jointly engages the board in generative thinking to consciously renew the organization’s comprehensive generative process—particularly during periods of potential significant paradigm shift.

In our experience, the process of generative thinking is often best facilitated by the free form asking of key questions relevant to the topic—the questions that are (and are not) asked form the dimensions of the generative frame.   In other words, how are you, or should you be, thinking about the challenges at hand, and is the board’s thought framework the right foundation for the critical future decisions that lie ahead?  From a governance perspective, asking the right questions is central to the board’s oversight role, and you cannot pursue the right answers unless you ask the right questions. From management’s viewpoint, engaging the board in generative thinking can sharpen and streamline the strategic decision process, leading to better decisions with a shorter cycle time.  The generative process is also central to effective enterprise risk management.

Here are some examples of board-level generative questions being asked as we transition to health-care reform.

  • Does the board have the optimal composition (competency, diversity) to fulfill its many responsibilities as we transition to health-care reform?  What additional competencies/perspectives will be necessary?
  • What are the most significant ways that health-care reform affects our mission and our role in our communities?  Does reform change our patient focus (e.g., healthy patients)?
  • How should health-care reform affect our degree of financial conservatism and risk tolerance?
  • How innovative and adaptive are we and/or should we be?
  • How will the health information revolution—including and beyond the electronic medical record—affect the way that health systems function?
  • We are already pursuing major quality, service, cost, and utilization initiatives—what is different under health-care reform?  How can we leverage our existing investments?
  • Are we going to become virtual health-care insurers?  Do we have the capabilities to manage risk?  What did we learn from the failed capitation era?
  • How many of our “partners” are also our competitors (e.g., insurers, independent clinical practitioners, and medical groups), and how will we forge productive and functional relationships with these parties?
  • What are the major regulatory conflicts we need to be considering?
  • What continue to be our principal internal conflicts that are potential barriers to achieving quality, utilization, and service goals?  For example, should a hospital refer patients to more expensive hospital-based ancillary services when there are much cheaper alternatives right across the street, or how do the plurality characteristics of our medical staffs create internal conflicts?
  • Should we be engaging more actively with the broad range of employers in our markets? How should we be doing so?
  • Should we approach our own employee health insurance program differently?

Generative board leadership has great potential to unlock additional value as we transition to health-care reform.  This capability will be particularly important at a time when strong leadership will be necessary to confront both the known and unknown challenges ahead.

Apex facilitates generative leadership exercises for boards to enhance board leadership dynamics and capabilities.  Please contact us for more information.

1 Chait, R. P., Ryan, W. P., & Taylor, B. E., Governance as Leadership—Reframing the Work of Nonprofit Boards, John Wiley & Sons, Inc., 2005.