By Bobby Guy

Oh boy, this one gets a lot of companies that have grown to success.  "This is the way we've always done it, and look how successful we are" holds a lot of credibility.  But it holds an unspoken assumption: that the conditions that were in place while the company was using the strategy to great success remain static.  This is hardly ever the case, and if the conditions change, the healthcare company must adapt with them. 

An example is the hospital industry: over the last 15 years, hospitals have had to learn to adapt to increasing competition from surgery centers, imaging centers, and specialty hospitals.   If hospitals did not work to change their service offerings and to compete in the services where they can be the most profitable, the changing market would drive many out of business.  (Indeed, according to the Berger Commission report in New York State, many hospitals in that state are going to be allowed to fail and close).  Hospitals as an industry are learning to compete, and to focus on the services that are most critical to their communities and that they can provide profitably.

How long do conditions remain static? In our economy, and in the global economy, not very long.   One recent book called "Margin" has a set of graphs showing the rate of change in the assumptions by which we live: almost all of the graphs show J Curves, which are flat to slightly rising for centuries and then shoot almost straight up in the 20th Century, showing dramatic immediate change. 

Lesson: to be successful, healthcare companies must be ready and willing to adapt quickly to changes in the market and challenges to their industries.

As a closing note, consider the memorable dialogue in Hemingway's Farewell To Arms, between Count Greffi and the protagonist over a game of billiards, regarding World War I:

"What do you think of the war really?" I asked.
"I think it is stupid." [the old Count replied]
"Who will win it?"
"Italy."
"Why?"
"They are a younger nation."
"Do younger nations always win wars?"
"They are apt to for a time."
"Then what happens?"
"They become older nations."