Somebody’s gonna get the shaft

I just finished T. R. Reid’s excellent book on health care systems around the world, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care (review to come shortly). And while there were a lot of things that struck me as important in it for understanding the health care challenges we face today, there were two key lessons I found applicable to leadership in general.

One was the idea of issues that fall through the cracks and so go unaddressed, which I wrote about last week. The second, which I’d like to address here, is the idea that some problems can’t be solved in a way that benefits everyone equally–and in fact may require a solution that is bad for one or more groups of stakeholders. It seems to me that a successful leader needs to be able to step up in these kinds of situations and find a way to motivate people to do what needs to be done even when some of them will be on the losing end of the bargain.

In terms of health care, it became clear from Reid’s journey that there isn’t a solution anywhere that’s a win-win for all parties involved, that is, there’s always difficult tradeoffs between providers, payers, and patients, and so health care systems are win-lose propositions overall.

In some countries, providers are on the losing end: administrative costs are kept low by enforcing a ceiling on the fees paid for services; in others, payers are: the absence of a market dynamic means they can’t turn profits like they would otherwise…or perhaps there are no payers since the government directly pays for all services; and in yet others, patients are the losers: whether because of high costs, the uncertainty of coverage, or limited access to services. And of course, in some systems, there are losing propositions for all parties involved.

Anyone who’s been involved on a software development project will recognize this as a variation of the so-called project triangle: any change to cost, scope, schedule, or quality has an effect on all the others. So you can’t increase scope, for example, without spending more money and taking more time to do the work…unless you spend a lot more money to keep to the original schedule; you can’t reduce the schedule without trimming out scope or quality…unless you spend a lot more money to keep scope and quality up. And so on.

One way Reid feels that countries have navigated these difficult choices was to first decide whether access to health care is a right or a privilege and then to design a system that supports the decision. All of the win-lose decisions that building the system requires will be driven (at least in part) by the answer to this fundamental issue, and hopefully the resulting design will have more to do with the nation’s stance on the issue than on special interests, favoritism, or plain caprice.

This isn’t the place to answer this question or debate the merits of one system over another, so I’ll leave that to another time and place. But what I do find compelling is the idea that to lead effectively in a win-lose situation, you need to determine your guiding principle first and then make your decisions in light of it.

It’s something I hear from leaders a lot (see part one of my interview with David DeLuna for an example of this) and it’s something I find myself having to do often in my consulting work with clients, whether on a small scale–should we use SharePoint or shared drives to manage our documents–or a large one–who loses if we spend money on an enterprise approach to managing content versus if we don’t. And it seems to me that as the scale gets larger, the ability to (i) find the right guiding principle to use, (ii) pick a stance on it, and (iii) lead in accordance with it gets exponentially more difficult.

As usual, no answers here. But would love to hear what folks think about this issue of leading through win-lose situations: have you had to do it? Lived through one under a successful (or unsuccessful) leader? Thoughts on how you begin to develop the ability to lead in this way? Let’s get the conversation started…

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