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business, management and leadership

10 Predicaments Facing a New CEO

 

http://www.iedp.com/Blog/Ten-Predicaments-Facing-a-New-CEO

27 Aug 2014 Back

10 Predicaments Facing a New CEO

VIEWPOINT:  No career move is more profound than the step up to CEO. Tata Consultancy Services’ Himanushu Saxena and Tuck Executive Education at Dartmouth’s Prof Vijay Govindarajan reveal 10 key dilemmas that the new CEO needs to take account of, to hit the road running:

Finally the day arrived, when Peter was appointed as the CEO of the multinational technology giant. After months of speculation, apprehension and expectation; all came to a logical conclusion and everyone sighed with relief. Stakeholders were satisfied, the board were confident of having made the right choice, and the outgoing CEO felt that he was leaving the company in safe hands. When a week long ceremony and celebrations were over, Peter got some reflective moments to himself. That night, he could not sleep. He wondered, ‘what next’? Where does he go now, from here onward? Who to look up to, where to escalate and where does the buck stop now? Unfortunately, the buck now stops with him. Peter knew that from now onwards, everybody including customers, stakeholders, employees, the market and board will look to him for  direction; looking for those ‘Pearls of Wisdom’ that he had been craving to apply or holding on to reveal now that he had reached this stage.

This a usual scenario in most companies, where succession has happened or is likely to happen in the near future. CEOs are always in the ‘Hot Seat’, irrespective of whether their businesses are struggling due to competition, context or capability; or doing exceptionally but where the continual drive for aspirational growth continues. They have to deal with a number of predicaments that put a strain on their time, energy and decision making. Either way, here are 10 top dilemmas new CEOs will do well to know in advance and brace their organizations to deal with effectively:

  1. Finding the New Vector – Each leadership transition/succession is marked as a period of metamorphosis. New CEOs have to decide on their strategic direction: which markets to focus on, what technologies to adopt; as well as the tactical ones: where is the leadership shuffle required and what new regulation challenges to deal with; in addition to shareholder expectations. Identifying the primary source of competitive advantage also consume a significant amount of CEO’s time, stretching the decision-making to the hilt. Time and again, it has been proven that a deep sense of customer centricity combined with new capabilities give wings to the new growth vector.
  2.  Core versus White Space Capitalization – Sticking to the core or venturing away from it, in pursuit of new growth opportunities is a major dilemma CEOs often face. This requires ‘Strategic Intuition’, taking that judgment call, where all the perspectives naturally render themselves into a coherent decision. In today’s world, the core must constantly evolve by capitalizing the white spaces.
  3.  the Next Big Picture or Scaling the Existing One – One of the most obvious expectations of the board and stakeholders from the new CEO is clarity on whether the current ‘big picture’ will be manifested or a new one will be conjured. Where will the next big idea come from and whether the CEO will have the agility and resolve to bet on it?  CEOs need to structurally organize their companies where the systems and process take care of scaling the current picture and the key enterprise decision-makers spend a significant amount of time in finding the next big picture.
  4.  Dealing with a New Pecking Order – In one step, a new CEO alters the pecking order in the organization. He has probably superseded a few of his seniors and has gone ahead of his peers, leading to change in the power dynamics. How to get people to align with thebroader strategic agendas, which may or may not be at variance with others, is a major challenge CEOs have to deal with. What will come in handy here is not their knowledge or intellect but the art of building federations through influencing, iterating and interacting, in a meaningful manner. It is about giving respect at altogether different level, before seeking to earn the respect of various stakeholders.
  5.  Building Shared Agendas – In the run up to CEO’s position, especially internally, most leaders develop tremendous familiarity with their peers, direct reports and superiors. This may subconsciously lead them to take each other for granted. Although critical, this doesn’t impact the working relationship as severely, as it does post-succession where, the power dynamics has changed. As a result, thecollaboration takes the hit. Ensuring that there is adequate listening and understanding on both sides is a major challenge. Curbing personal agendas and promoting the shared agenda is what CEOs need to learn and practice.
  6.  Being the Face of Organization – Stakeholders want to know, hear and see the face with whom the buck stops now. Many CEOs, who probably have not had the exposure to face the global media, find themselves in an unfamiliar groove and often end up struggling with their messaging both internally as well as externally. From a situation, where his connects and conversations had topical implications, he has now moved into a role wherein he is always sending out a message, even when he is not. This is an unprecedented situation and often there is not enough grooming on this. Unfortunately divorcing or delegating this responsibility does not help. Effective grooming on this aspect must begin well before someone comes into the reckoning for being the next CEO.
  7.  Shifting the Growth Curve: Incremental Moves versus Bold Forays – The very growth curve of which the CEO was part of (in case of an organic succession), needs to shift now, few notches up. This is to mark the arrival of the new CEO. Shifting the growth orbit is the most natural aspiration from a new CEO. And this could put his imagination to the test, as to where to direct his ship in search of new growth horizons.
  8.  Reimagining the Interplay – Usually the resources of an organization does not change overnight. Resources of all kinds will remain constant initially. It will take some time for him to reinvent the management systems for creating new resources and capabilities. But the marshaling of resources can change from day one or soon after he has firmed in his new ‘Avataar’.  This is not easy. Seeking and searching a new interplay among already existing resources and capabilities requires reframing the outlook or altering the prism. This is about connecting and reconnecting the dots in an altogether different way.
  9.  Leading Disruption – Overtime, organizations mature in workflows – decision, process and interactions leading to stability. Long term stability leads to slack in the organization, which creates immunity for change. One of the toughest jobs of CEOs is to identify andgalvanize slack-discovery and drive disruption, before the competition or an unknown player disrupts. It is about dropping the long-standing perspectives and practices and acquiring new ones by virtue of altering the cause and effect linkages.
  10.  Create a New Legacy or Build on the Heritage – This is more pertinent for a CEO, who has come from outside to fix things in a turn-around scenario. If he disturbs the legacy too much, people are likely to blame him for showing disdain to the past and if he sticks with it, he will be questioned for being too conservative. What will serve him well is his ability strike a balance between timeless and timely.

Finding business coherence amidst the randomness of internal and external events is a perpetual dilemma for the CEOs.  A lot will depend upon, how he marshals his resources in new and innovative ways to discover that elusive growth orbit for which he has been appointed as the CEO. Discovering new ways of value creation and building conviction around them will help him deal with above predicaments, effectively. Each and every dilemma must be dealt with a filter of Staying Relevant – Proactive Disruption and Building case for Strategic Change. Finally, not everyone will understand the path undertaken by CEO but as long as these paths enable him and the company ‘Stay Relevant’ to its customers, they must be pursued with conviction.

Illustration: King Arthur. Fresco (detail) in the Corridor, Trinci Palace, Foligno, Italy

Further Information

Himanshu Saxena is a thinker, writer and speaker on concepts such as Big Picture, Reimagination, Strategy & Innovation and Leadership@Top Level. He is currently enabling TCS BPS in aligning strategy, coaching and developing leaders of tomorrow.

Vijay Govindarajan is the Coxe Distinguished Professor at the Tuck School at Dartmouth and the author of NYT and WSJ Best Seller, Reverse Innovation.

Tuck Executive Education at Dartmouth
healthy habits, policy, politics

Economist: eat steak and cream

http://www.economist.com/news/books-and-arts/21602984-why-everything-you-heard-about-fat-wrong-case-eating-steak-and-cream?fsrc=scn/fb/te/pe/ed/steakandcream

Healthy eating

The case for eating steak and cream

Why everything you heard about fat is wrong

The Big Fat Surprise: Why Butter, Meat and Cheese Belong in a Healthy Diet. By Nina Teicholz. Simon & Schuster; 479 pages; $27.99. Buy from Amazon.com, Amazon.co.uk

“EATING foods that contain saturated fats raises the level of cholesterol in your blood,” according to the American Heart Association (AHA). “High levels of blood cholesterol increase your risk of heart disease and stroke.” So goes the warning from the AHA, the supposed authority on the subject. Governments and doctors wag their fingers to this tune the world over. Gobble too much bacon and butter and you may well die young. But what if that were wrong?

The case against fat would seem simple. Fat contains more calories, per gram, than do carbohydrates. Eating saturated fat raises cholesterol levels, which in turn is thought to bring on cardiovascular problems. Ms Teicholz dissects this argument slowly. Her book, which includes well over 100 pages of notes and citations, covers decades of nutrition research, including careful explorations of academics’ methodology. This is not an obvious page-turner. But it is.

Ms Teicholz describes the early academics who demonised fat and those who have kept up the crusade. Top among them was Ancel Keys, a professor at the University of Minnesota, whose work landed him on the cover of Time magazine in 1961. He provided an answer to why middle-aged men were dropping dead from heart attacks, as well as a solution: eat less fat. Work by Keys and others propelled the American government’s first set of dietary guidelines, in 1980. Cut back on red meat, whole milk and other sources of saturated fat. The few sceptics of this theory were, for decades, marginalised.

But the vilification of fat, argues Ms Teicholz, does not stand up to closer examination. She pokes holes in famous pieces of research—the Framingham heart study, the Seven Countries study, the Los Angeles Veterans Trial, to name a few—describing methodological problems or overlooked results, until the foundations of this nutritional advice look increasingly shaky.

The opinions of academics and governments, as presented, led to real change. Food companies were happy to replace animal fats with less expensive vegetable oils. They have now begun abolishing trans fats from their food products and replacing them with polyunsaturated vegetable oils that, when heated, may be as harmful. Advice for keeping to a low-fat diet also played directly into food companies’ sweet spot of biscuits, cereals and confectionery; when people eat less fat, they are hungry for something else. Indeed, as recently as 1995 the AHA itself recommended snacks of “low-fat cookies, low-fat crackers…hard candy, gum drops, sugar, syrup, honey” and other carbohydrate-laden foods. Americans consumed nearly 25% more carbohydrates in 2000 than they had in 1971.

In the past decade a growing number of studies have questioned the anti-fat orthodoxy. Ms Teicholz’s book follows the work of Gary Taubes, a science journalist who has cast doubts on the link between saturated fat and health for well over a decade—and been much disparaged for his pains. There is increasing evidence that a bigger culprit is most likely insulin, a hormone; insulin levels rise when one eats carbohydrates. Yet even now, with more attention devoted to the dangers posed by sugar, saturated fat remains maligned. “It seems now that what sustains it,” argues Ms Teicholz, “is not so much science as generations of bias and habit.”

From the print edition: Books and arts

data saving lives, EF, entrepreneurship, healthy habits, nutrition, policy, quantified self, rapid learning health systems

Bloomberg: Omada Health Pitch

  • Digital Therapeutics — “Prevent”
  • Digitally-mediated behavioural change
  • Business Model: Charge on success
  • Enterprise Customers

http://www.bloomberg.com/video/take-face-to-face-medicine-to-digital-omada-health-ceo-luSxUqctQcqbjUMc6Wf41g.html

Transcript:

Thanks for joining us on “bottom line.” tell me what your company does.

What is digital therapeutics?

Digital therapeutics is the idea that medicine in the past was conducted in a face-to-face setting.

On the web and social and mobile on the way we can create digital expenses is allowing us to be done digitally.

We take proven lifestyle and behavioral medicine interventions from face-to-face to digital.

That is what we do.

This could help me — well, i don’t smoke, but if i did, it could help me quit and eat healthier, which i don’t do.

Is that the idea — lose weight, quit smoking?

Matt, we can help you with that, and if you want a free pass to our program, let me know . our program helps people with high risk of type two diabetes lose weight and make lifestyle changes over the course of 16 weeks and it is conducted entirely digitally.

I use my iphone or ipad and this will actually work?

Is that the case?

That is the idea.

It can help people proven at risk for type two.

If you help them in a high-tech fashion, our program is digital, a small group environment, where you are paired with others like you and you see how others are doing and we get android and iphone apps and we have a whole bunch of things to make you successful.

Every time i want a delicious cherry coke at lunch, you suggest something that won’t give me diabetes?

The idea is that that moment you want that delicious cherry coke, you think of your health coach and your groups going on with you and maybe you will get a water instead of something better for you.

Very smart man , mark andreessen, is a big backer of you guys.

What is the future of this company?

What does he see there as far as growth is concerned?

You know, i think the interesting bit is what is happening from the company landscape is that you get folks like me with tech and health care backgrounds will bring companies.

I studied neuroscience and i worked at google for a well and went to harvard medical school.

My passion has always been tech plus health care.

I think andreessen horowitz saw a consumer grade, rich product and experience, but to an enterprise customer set with a unique business well behind it that got them excited and that is what led them to pull the trigger on the deal.

$23 million?

What’s next?

Next for us is working with customers.

We have an innovative business model and that we only charge our employer and health plan customers if we are successful with members . because of that model, we have had a lot of demand coming in and it is just scale, scale, scale.

You sold me with harvard med school and you are a neuroscientist with an nba paper you have competition out there — but you’d have competition out there.

What are the barriers?

We do have competition.

The biggest barrier is for entrepreneurs and companies like myself is figuring out health care.

It is incredibly complex.

But so far, so good.

We want competition.

This is a space where there is a lot of people at me.

One third of the adult population has prediabetes, the latest stats from the cdc.

Let’s have a lot of people take a bite.

I wonder about results.

How can you prove that your programs give people the results they want in order to pay money up front and center for your courses — sign up for your courses?

The first is in the world of behavioral medicine.

There are a lot of published studies that show you what you need to achieve from the results standpoint, and then because of the element in our program like the digital scale, the cell phone chip, we can determine if people are successful and show the results in a very transparent and authentic way to our enterprise partners.

Diabetes is obviously a huge and growing problem.

I am certainly at risk for it.

But the weight loss thing is where i guess you will make the big money.

Type 2 diabetes is correlated to being overweight but it is not the only thing good genetics comes into play as well.

As a country, if we are to avoid the stats the cdc put out, 40% of adults of finding out at some point in their life that they are thank you, there needs to be weight loss and lifestyle intervention programs.

I’m just saying that if your marketing materials show that i lost 10 pounds in weeks with this outcome everyone will sign up.

It’s fascinating, what happens when we work with a self-interested employer is that employees who go through a program and become successful rave about it and tell their colleagues and they get colleagues to sign up.

Thanks very much.

EF, health market quality, healthcare, policy, rapid learning health systems

HBR: What the Insurance Industry Can Do to Fix Health Care

PHI driven implementation of value based health care…

https://hbr.org/2014/12/what-the-health-insurance-industry-can-do-to-fix-health-care

What the Insurance Industry Can Do to Fix Health Care

DECEMBER 23, 2014

Health insurance companies are uniquely positioned to save the day in our ailing health system. Yes, you heard me correctly: health insurers.

Health insurers — or “payers” — are reviled nearly universally. Confused by “explanation of benefits” forms and denials of coverage and frustrated by rising deductibles, co-pays, and costs of care, consumers rank their experiences with health insurers below those with cable companies and internet service providers. Physicians and other care providers — who are constantly negotiating price of services and filling out piles of paperwork — don’t like payers much either.

All this makes insurers unlikely heroes. But we need someone to cut through the complexity of the current system, demand true value from providers, and create better options for consumers. Insurers increasingly look like the folks who can do the job and reinvent their business at the same time.

How? They can use their market power (they direct the bulk of health care dollars) and understanding of different consumer segments to create innovative products, services, and partnerships that address consumers’ needs. In the process, they can help move us all toward a low-cost, value-based health care system. Here are some specific ideas on what payers could do:

Act as true partners to value-based providers. Most payers today are piloting new economic models that pay providers not for the services they provide but for the value they create. Most, however, are neglecting a key opportunity: helping providers change their operating model. To succeed in value-based care, providers need data, analytics, smart clinical-care teams, and managerial support. Insurers are well-positioned to provide all this. They can also help providers become more efficient and assist them in navigating the tricky financial transition from fee-for-service to fee-for-value economics. Most important, insurers can help the very best provider organizations succeed by using them as the core of attractive, competitively priced insurance products.

Offer options for low-cost, convenient care. One area of waste in health care is the use of physician offices and hospital emergency departments to treat minor conditions such as sore throats, urinary infections, and allergies. Payers can make it easy for their members to get care 24/7 in more appropriate settings by partnering with retail, urgent care clinics, and telehealth providers. They can also offer the data connectivity needed to keep the consumer’s primary care provider in the loop. Oscar, the New York health insurance company launched last year, received fanfare in the press over its sleek offering, which includes unlimited phone and video calls with physicians and a “doctor on call” service that provides prescriptions by phone or e-visits. A number of retail pharmacy chains are also actively pursuing retail health and wellness clinics in stores to boost growth.  Walmart has been piloting low-cost care clinics offering a $40 office visit that could dramatically reset the cost bar if scaled broadly.

Cover new wellness- and prevention-oriented treatments. Such options can serve as effective adjuncts to traditional benefits and encourage the trend toward more self-care. Aetna, for example, has offered mindfulness and yoga training to 6,000 of its employees. Its research shows that lower employee stress improved productivity by 69 minutes per week and gave an 11:1 return on investment. Similarly, articles in The New York Times, TIME, Scientific American, JAMA, and The Huffington Post cite growing evidence of the efficacy of meditation programs.

Explode the PPO model. Today the gold standard for health insurance is a preferred provider organization, a huge collection of doctors assembled to provide something for everyone but no special benefit to anyone. Insurers can do a better job for consumers and create real value by developing hassle-free mass customization. In this new model, consumers can choose from lifestyle-based curated options that offer trade-offs across risk level, health-savings options, primary-care models, alternative networks, network breadth, coaching and navigation programs, rewards programs, contract length, and incentive structures. Transparency tools and crowd-sourced reviews will spotlight value and multi-modal coordinated care delivery (think care teams that seamlessly work with telehealth providers, health coaches, and retail clinics) will help cut costs considerably. Consumers will be able to trade their own health engagement into benefit dollars and rewards that they can use seamlessly. While true à la carte insurance customization is not yet a reality, private exchange platforms are starting to provide a stepping stone to get there. For example, Maxwell Health, a new private exchange platform, presents a beautiful interface with lifestyle-focused packages that make product selection simple and tailored for you.

Sell convenience and personalized service. Most health care could hardly be less convenient. Now that consumers have unprecedented purchasing power (rise of public and private exchanges) and bear unprecedented costs (mounting high deductibles and premiums), they expect iPhone-like service. There is tremendous opportunity for payers to make the health care experience simpler and more supportive with online appointment scheduling, clear data and reviews, personalized suggestions, navigation apps with predictive decision support, reward programs, peer-to-peer support, and many other tools. Making the consumer experience better is smart for payers too. They can build stickier consumer relationships and generate new opportunities to address consumers’ growing health and lifestyle needs.

Power healthy behavior change. Some 50% of the determinants of health are driven by lifestyle and personal behaviors. Changing people’s behavior is a tall order but is necessary to improve health care. There are already examples of innovators that are succeeding, such as Omada Health with weight loss for pre-diabetics and Zipongo with healthy eating. We’ve only begun to deploy behavioral science, advanced wearable/monitoring technologies, and machine learning to understand the behaviors and motivations of different groups to predict and prevent acute events and connect people with the solutions that work best for them.

Serve as the bridge between new tools and consumers. In the first half of 2014,venture capital investment in digital health grew by 176%, spawning new consumer-centric companies with interesting approaches to consumer health. But there’s a chasm between these unscaled point solutions and the consumers who could use them. Payers can bridge the gap, using Amazon-style analytics and personalization to better understand consumer types and then connect them at the right place and time to the best-suited offerings. Better yet, payers don’t need to build the bridge themselves: A growing set of powerful consumer-engagement platforms (e.g., WellTok and Optum’s Rally) are moving along this path.

Payers have economic incentives to do everything I’ve described. The Affordable Care Act puts limits on the margins they can earn from their traditional business (Oliver Wyman estimates payer margins may shrink by a third), and an evolving marketplace means that they will face significantly more competition — from each other, health care providers, and new entrants that see an opportunity to capture growth in a $3 trillion market. The options I’ve described would let payers move into non-regulated markets and potentially generate revenue from discretionary consumer spending — a growing pot of money they have not accessed much.

Can they win consumers over? One advantage of being in an industry people don’t like is that there are many opportunities to pleasantly surprise the consumer. The good news is that the things that will make consumers happy — more convenience, customization, support for doctors, coordination of care — can all contribute to attractive new business opportunities while making the health care system more efficient, effective, humane, and sustainable.

Sukanya Soderland is a partner in Oliver Wyman’s Health and Life Sciences practice and a leader in the firm’s Health Innovation Center.