The future is scary and dangerous.
It is scary because the changes fueled by political and economic instability rattles our comfort zone. It is dangerous because if we do not adapt to change, it can be career limiting.
The real challenge facing executives is to recognize the difference between seismic change versus a slow moving trend that we believe we can handle.
There are some epic examples of executives who misread the scope and pace of change and waited too long to adapt. When that happens, the consequences, financially and operationally, are significant. That is certainly the case for Community Health Systems (CHS), the Franklin, TN hospital management company, once the darling of Wall Street, and now a meandering company with a decidedly uncertain future. Leadership waited too long to adapt to a business model that was moving from inpatient to ambulatory care with lower rates of reimbursement. When they realized their folly, they sought to assuage Wall Street’s demand for continued top-line growth by acquiring Health Management Associates (HMA), a troubled hospital management company based in Naples, Florida. HMA was a different company but with the same misguided mindset.
The post acquisition results have been dismal. Two companies that failed to recognize the changing face of healthcare are now struggling for relevance, perhaps even survival, and the real losers are their investors and patients. CHS stock, which was trading at $60 a share two years ago, is now trading at below $9.
The important lesson from this management debacle is that leaders whose confidence and reliance on the belief that this is the way it has always been blinds them to an immutable truth, that nothing in life or business remains the same. If you are doing well and you are confident it will last, you might want to reconsider. Seriously reconsider.
There is an old saying: Ignorance gets you into trouble but arrogance keeps you there. There is enormous truth in that statement. There is another leadership saying: check your ego at the door. And that is sage advice in a world dominated by change.
I saw an interesting article recently that said leaders who embrace change, even when they are not spot on strategically, perform better than executives who push back.
© 2020 John Gregory Self