Why Executives Suck at Start-Ups

“It seems obvious that healthcare value is created in addressing medical conditions for individuals patients over the cycle of care, and that health care competition should be centered at this level.  So why, despite so much effort by so many well-intentioned people, has competition gravitated to zero-sum competition at the hospital, health plan, and provider group level?  Why is care delivery so fractured by procedure and intervention?” (Redefining Healthcare, Porter & Teisberg

 

Startup-ImageWhy do we keep trying to create reform using strategies that promote competition on unproductive ground?  Redefining Healthcare, points out that zero-sum strategies such as: cost shifting, increasing bargaining power, restricting the choices of captured patients, and restricting services are doomed to fail. They add zero value to the patient. For the type of competition that reinvigorates industries to occur, our strategic focus needs to shift to adding true value to patients.  That fact foretells tricky times ahead, because the new strategic thinking that will save our industry is hard to promote within the current infrastructures of our current healthcare systems. My prediction is that we will see an increasing amount of healthcare executives and clinicians leave their well-established positions to start-up a venture of their own that seeks to create the better value for our patients. I believe this is a necessary trend in order to generate the innovation required to move our industry forward. The tricky part is…being an executive is 180 degrees different than developing a start-up.  To fully appreciate why, I revisited the Udacity definition of what a start-up is, “…a temporary organization designed to search for a repeatable and scalable business model.” (To watch video)

 

No wonder the skill-set for being an executive is very different from being a successful start-up founder.  Here are five fundamental ways they differ:

    1. Successful executives are skilled at executing and refining existing business models. It is uncomfortable to be on the search for a business model that doesn’t exist yet.
    2. Communication during start-ups is to glean search information. Testing product/service viability is the focus of the start-up owner.  Executives spend a lot of time with the public engaged in communication to execute specific messaging.
    3. Start-ups by definition are TEMPORARY. To executives, organizational sustainability is a big part of the job.  It is hard for executives to not want to jump to the scaling without first finding the right repeatable model.
    4. Start-ups are lean. Executives have proven track records as managers.  Being a brilliant manager and being a one-person shop are two different worlds.  Only adaptable executives are able to thrive in both worlds.
    5. Start-ups exist in a high-degree of ambiguity. Executives likely rose to the heights of their organizations because they created order out of chaos.  For some the constant state of the ambiguous proves too much to handle.

 

Entrepreneurs are my heroes!  At the cross-road our healthcare industry is at, we need executives and clinicians ready to engage in the solution through entrepreneurship.  Not all executives will suck at growing their start-ups.  Many will succeed, if their eyes are open to the new skill sets that will need to be developed.

Shawna Beese-Bjurstrom, RN, MBA is a Healthcare Executive and Business Developer.  She lives in Spokane, WA with her family.

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