Tuesday, August 5, 2014

Smaller is Often Better

Every couple of weeks someone will ask me when we are going to be acquired by or merge with a larger company. This question always frustrates me. That’s because I think we have communicated often that our Board would prefer that we maintain our “independence” (no healthcare provider is really independent) so that we can fulfill our mission and move toward our vision as a true community based system of care through the eyes of the patient.

However, I know that this question is a very honest one and is almost always coming from someone who accepts that bigger is better. While it is true that bigger companies often have more assets and can weather storms better than smaller organizations, in healthcare in our local market some of the companies actually have less flexibility because they have such high debt relative to their assets. 

But finances aside, is bigger always better? I have recently finished reading Small Giants: Companies that Choose to be Great Instead of Big by Bo Burlingham. Mr. Burlingham studied 14 companies who decided that rather than getting as big as possible as fast as possible that they would focus on becoming the best at what they do. The group did not include a lot of household names but did include companies like Clif Bar and Company, a leading maker of energy bars and other foods; Anchor Brewing, the original American microbrewery; and Zingerman’s Community of Businesses, the company that includes the world-famous Zingerman’s Delicatessen in Ann Arbor, Michigan. All 14 companies have had many opportunities to be bought out, to merge, to expand quickly or to otherwise grow fast. Instead, they decided to stay focused on their mission. Their collective vision was to continually make their products better and delight those they were serving. 

Mr. Burlingham found seven threads that ran across all 14 companies. First, the leaders of these companies recognized the full range of choices they had about the types of companies they could create. They hadn't just accepted the belief that they had to get big to survive. Second, they had overcome the pressure to take paths they had not chosen and did not necessarily want to follow. Third, the companies had an extraordinarily intimate relationship with the local community in which it did business. Fourth, the companies built exceptionally intimate relationships with customers and suppliers. Fifth, the companies had unusually intimate workplaces that were little societies that addressed a broad range of their employees needs as human beings. Sixth, they had developed a variety of corporate structures that gave them the freedom to develop their own management systems and practices. And seventh, their leaders had a passion for what their company did. 

I am sure that Mr. Burlingham would be the first to say that very big companies could also do a lot of these things but it would be (and is) much harder. 

Reading Small Giants caused me to reflect on how GBMC HealthCare is doing across these seven elements. I think our Board and our senior team clearly recognize what our choices are and have consciously chosen to stay focused on continually improving our healthcare product. We are frequently “courted” and have resisted the temptation to merge. This does not mean that we don’t understand that we can’t do it all alone and that we don’t value the gift of working with outstanding partners - we do. 

GBMC has an excellent relationship with the community and we are working to grow it even stronger as we reach out during our 50th Anniversary celebration. We have good relationships with our patients (see the Alexis Watkins video in this blog for an example) and we are working to make them better one at a time. We do well with our suppliers, although I am sure that we have room for improvement in this area. We are consciously working to make GBMC a better place for our employees and our private practicing physicians, although again, we can do better. Lean Daily Management is an example of a management practice that we have committed a large amount of our time to that would not necessarily be possible if we were just one hospital in a large company. And lastly, I think that most GBMC leaders are showing the passion for achieving our vision. 

I would love to hear your thoughts. Do you agree that smaller can be better?

P.S. In case you think that I only read management books, I just finished reading Tatiana, the most recent in Martin Smith Cruz’s Arkady Renko series. Renko is a detective in post-Soviet Russia. For those of you who like suspense and intrigue, Tatiana (and the rest of the series for that matter) is a page-turner.   
 
 

4 comments:

  1. Yes smaller is better, at least I think. When you are small you can make your organization the best of the best by working together. You do not have the big corporation telling you that this is what will be used, when in actuality it may not be the best for your specific organization. I have worked in large corporations and it can be very frustrating. I think people that work in health care are taken by surprise that yes a small organization can stand alone and be the best. Let's make this work, we can do it!!

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  2. After doing what so many people do, work for a living, a point is reached when I swore I would not miss the office politics, meetings, phones, long days and Maalox moments. After being employed in health care administration out of state for almost two decades, I can attest to the fact that bigger is not always better. After retirement I became hospital volunteer.
    There are 88 hospitals in Maryland so the choices were varied. For me, my hospital of choice has been, and remains, GBMC. I have always found the hospital to be large enough to have many of the latest modalities in patient care but not so large that you become a number instead of being recognized as an individual with feelings and concerns.
    As so often happens in a ‘person’ business such as health care, the larger you get the more you find yourself feeling like an ant in a large hill.
    Quality patient centered care is difficult; it takes work and dedication and in some instances is hard to recognize if you are involved every day in its delivery. If you have ever been a patient anywhere else you realize GBMC is ‘personal’.
    If we lose that…….. we lose.

    Tom Price
    Volunteer

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    Replies
    1. Thanks very much, Tom for your reflection.

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