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  • The Power of Company Purpose

    Mission statements and declarations of corporate values are great things. They look nice in an annual report or hanging on the break room wall. But, when a company purpose is committed, when it “walks the talk,” as we sometimes say, it can find power in those statements of purpose, too. Real, results-oriented power.

    Here’s an example. At Insigniam, one of our clients is a large, regional healthcare provider with almost 9,000 employees. About a year and a half ago, the company hired us because its leaders had committed to a new company purpose, a lofty purpose at that. They wanted to transform healthcare by putting their people and their patients first. People and patients. Then profits. In that order.

    This commitment got results. The sense of urgency was equally relevant; at the time of the announcement about the new purpose, employee engagement scores were very low — right in the middle on a scale of all healthcare providers. Just 18 months later, employee engagement scores were near the top ranks, jumping from the 51st percentile to the 87th.

    Employee retention increased as well. The company was losing an astonishing half of its new workers every 12 months. Today they lose 20 percent.

    Improved patient care

    Patient surveys were also showing better results, and the number of patients who were being discharged without readmission — a key metric in the industry — had substantially improved.

    That’s the power of company purpose, for sure. But here’s where commitment really matters. This year, the company had a big financial shortfall. It was millions of dollars off target. (Case Study: How a biopharmaceutical company earned $1 million per day and delivered a drug to the FDA 45 days faster.)

    In the past, the response would have been simple, although not easy. Leadership would have announced layoffs. Instead, top leadership tasked managers from around the country to find a way to close the financial gap without firing anyone because, in the new purpose, people come first.

    Saying that, though, writing it in the annual report and posting it on the break room wall, was one thing. Actually believing in it — even when times got tough — demonstrates that this company is truly committed to its new purpose. Will good results follow? We think they will. Indeed, we think they already have.

    How does your company utilize its purpose? Does it “walk the talk?”

    Did you know that uniting people and purpose could improve the success of a merger and  acquisition by a third? Find this article and more change management research by downloading the new Insigniam app.

  • Insigniam: How one company regained perspective on healthcare management

    Can an organization be spoiled by its own success? A regional healthcare provider that’s operated for more than 50 years asked itself that question recently. The answer: Yes.

    The healthcare company has grown steadily since opening its first hospital in the early fifties. Today, the organization has more than 100 locations, including five hospitals, two medical centers, three urgent care centers, and 55 physician practice sites. It also boasts a solid balance sheet. Revenues, which have grown steadily in recent years, are now more than $1 billion annually.

    But when executives got together to talk about their company’s future more than a year ago, they decided that something still wasn’t right. Something important. “We’d always been successful in terms of financial performance,” the president says. “But we had lost sight of the patient as the center of everything we do.”

    Healthcare management complacency?

    This healthcare provider was hardly alone in finding complacency issues. Healthcare companies nationwide have been nursing their balance sheets as much as — and in some cases more — than they’ve been nursing their patients for years, thanks to the mounting costs of healthcare service.

    The Institute for Healthcare Improvement reports that the U.S. healthcare system is now the most costly in the world, eating up 17 percent of the nation’s gross domestic product this year. That bite out of GDP will only get bigger, the IHI says, reaching 20 percent by 2020.

    That’s why IHI has developed a framework to help healthcare providers reduce costs while boosting patient services. Called “Triple Aim,” the framework was the primary benchmark that the provider used in realigning its corporate culture and its mission — not around the bottom line, but around patient care.

    Top-tier healthcare performance

    The organization had been in the middle of the pack of the nation’s healthcare providers in Triple Aim, and its executives wanted to become a top-tier performer.

    “But they realized their existing corporate culture wasn’t going to get them to that goal,” says Shideh Sedgh Bina, one of the founding partners of Insigniam, an international management consulting firm, which was brought in to help the healthcare organization achieve its new goal. “So they decided to pursue a cultural transformation that was tied into the elevation of performance. That is the best kind of transformation. Because culture is actually in service to performance — not the other way around.”

    The transformative goals were simple: Focus on patient’s needs, improve patient care, and better control costs. But achieving those goals involved a complex, coordinated series of initiatives. For one thing, 18 of the organization’s top leaders committed to a leadership development initiative custom designed by Insigniam aimed at driving a culture change.

    Redefining hospital values

    In addition, a leadership coalition was created to develop a new mission statement and redefine the company’s core values and operating practices. The organization also established a team that defined the operational objectives needed to move them up to the top tier among healthcare corporations. That team called upon the entire organization to achieve multiple, specific objectives, including decreasing the average length of a patient’s stay, boosting patient safety, and increasing physician engagement. Finally, and importantly, a campaign was launched to engage the workforce.

    Within months, the vast majority of the 9,000 employees had one-on-one discussions about the new corporate mission and objectives.

    That coordinated effort produced quick results. “Within just eight months, they saw significant, measurable outcomes from these efforts,” says Insigniam’s Bina.

    Improved patient outcomes

    Among them: Patient mortality rates and complications have declined while patient safety ratings have increased. One example: Patient falls, common in hospitals, have declined 38 percent in just one year.

    And, in the past 12 months, patient satisfaction scores, as measured by Thomson Reuters, have jumped six times more than the average hospital nationwide.

    “Not only is the substance of the care we provide getting better, but the patients’ perception of that care is also going up,” says one of the vice presidents.

    Structured marketing

    The culture assessment also revealed an absence of a structured marketing plan. A year and a half later, the provider won nine national awards in recognition of the new branding campaign, including magazine ads, radio commercials, and an employee wellness calendar.

    The key to changing the culture and the company’s performance, Bina says, is that the top executives conducted an honest assessment of what they wanted to change — including their own leadership styles. “The leadership bought into this process entirely,” she says.

    Employee satisfaction increases

    So, too, did the company’s employees. Survey results show the company is now in the 88th percentile of healthcare firms nationwide in terms of what the industry calls “employee partnership.” A year ago, it ranked near the middle.

    “This culture work has helped us refocus on the fact that patients are at the center of everything we do,” the vice president says. “And refocusing on patients has really brought back the passion of our workforce.”

  • There is a Sea Change inside Employee Expectations, Says Insigniam

    Insigniam, an international management consulting firm, has come forward with analysis of the recent spate of high-profile resignations, their potential underlying causes, its effect on employee expectations and professional recommendations for companies facing the same issues.

    Both Greg Smith and James Whittaker left their former companies with a perception of a negative change in leadership focus. Smith branded Goldman Sachs as a toxic environment without clients best interests in mind, and Whittaker called Google an advertising company with a single corporate-mandated focus.

    If we look beyond the very public Goldman Sachs and Google resignations, we are witnessing a sea change in employee expectations, says Insigniam co-founding partner Shideh Bina. Employees today no longer come to work just for the paycheck they have come to expect that their work will connect to some form of greater meaning, and that they should be able to match their company’s purpose and values to their own.

    A big contributor to this change in expectations is the amount of time and effort invested by most companies in the last 20 years to engage their employees commitment to an aspiring vision and corporate values. In a 2005 study of Fortune 500 companies, more than half of the companies had a statement that described their vision, mission or purpose.*

    Yet when many of these same companies that touted inspiring vision and values are faced with some kind of threat, such as the seismic economic changes that began in 2008, without tight discipline these principles are abandoned. This shift away from high internal values to protecting the bottom line at any cost shows a need for companies to reevaluate their corporate cultures and refocus leadership on investing in a culture that gives back to employees and clients alike.

    As executives, we must be responsible for what we have bred, says Bina. If we enjoy and thrive from the fruits of an emotionally engaged workforce, and are held in high regard by our customers for the values that we are perceived to uphold, then we also have to bear the responsibility that staying true to values and on course for mission are now principles in the latest version of the employee-employer contract and fulfill our end of that contract for our employees.

    For more information on Insigniam’s approach to cultural transformation, please click here.

    *A Study of the 2005 Fortune 500 Vision Statements by Bart Kasowski and Louis Jacques Filion

    Insigniam is an international management consulting firm serving large-cap firms in multiple industry segments including pharmaceutical, healthcare, consumer goods, transportation, banking, and finance. Since 1985, Insigniam’s proven approach to enterprise transformation, elevating leadership performance, shifting culture and creating speed-to-results for the C-Suite has generated $ 9 billion in client business results.

  • Why Your Business Won’t Be the Same in 5 Years: The Case for Strategy Innovation

    IBM once made grocery scales and cheese slicers. Nokia made paper products. Both are now known for something entirely different, building the case for strategy innovation.

    The business you operate today won’t be the same in a couple of years, say long-time management consultants Robert E. Johnston, Jr., and J. Douglas Bate, both of Insigniam. Venturing out for more aggressive topline growth means that organizations have to regularly scan the horizon for what’s next, even if it means completely changing the business model.

    Like IBM and Nokia, leaders have to search unchartered strategic frontiers for new opportunities. These strategic frontiers require business pioneers willing to take the risk of experimenting with innovation while successfully running the day-to-day business. But, as the authors warn, if you won’t take a risk, your competitors will.

    However, turning innovation into a core competence that creates topline growth and uncovers new opportunities is complicated. That’s where strategy innovation enters the picture.

    What is strategy innovation?

    Strategy innovation identifies new business opportunities for new growth, dispelling the myth that strategy planning and innovation are separate functions. Johnston and Bate argue the two opposing exercises of business planning and innovating can be combined for powerful results.

    And Johnston and Bate, the authors of The Power of Strategy Innovation, have a startling answer as to why more companies don’t pursue strategy innovation:

    Because companies don’t have the internal structure or process to do it.

    5 steps to strategy innovation

    In their book, the authors remove the guesswork of setting up a discovery process. Their strategy innovation method is outlined in five phases:

    1. Staging. As discovery team members assemble, define roles, and accrue resources for the process, they act almost like the crew of a tall ship preparing for an explorer’s journey.
    2. Aligning. The team and senior management coalesce around the “strategic frontier(s)” where the ship should go, akin to a ship’s captain getting approval from his patron on an anticipated route.
    3. Exploring. The team gathers information on the strategic frontier, like an explorer and crew chronicling their discoveries of new lands and treasure to present to sponsors back home.
    4. Creating. Based upon their discoveries, the team develops ideas for new business opportunities, just as opportunistic explorers did for their newly discovered lands.
    5. Mapping. The team forecasts the plan for achieving the new business venture and guiding it toward success, just as early explorers drew maps to help them return to the new destinations and realize the potential they touted.

    Realizing that even the best practices can fall by the wayside if execution isn’t successful, the authors dedicate a third of the book to implementation and another third to advanced questions, encouraging readers with case studies and straight-to-the point advice.

    With strategy innovation at the helm, what strategic frontiers could your company explore? Download or order Johnston and Bate’s book from