Insights November -0001

What Detroit can Teach Canadian Healthcare

Neil Seeman and Neil Stuart

Is your industry too big to fail? Will taxpayers bail out your organization and its staff if your entire industry goes bankrupt?
The "Big Three" US auto-makers have faced these existential questions. After the financial sucker-punch landed last year, GM, Chrysler, and Ford's management sung a similar tune, making two fundamental arguments to support a bail-out:

1. We're "too big to fail." In other words, if the economy is to avoid complete collapse, taxpayers have to pony up. Too many other industries, from doughnut shops to hotels, are directly tied to the production of cars and travel. Spare the auto industry, this argument says, or else everyone swallows the Hemlock.

2. We have an emotional bond with our consumers. According to this argument, North Americans' fondness for cars is like a life-long romance; if the love affair ends, consumers will suffer a dagger to the heart. They will question their youthful attachment to their Mustangs, Studebakers and Thunderbirds. If you end the romance, the auto industry said, you will kill the very spirit of the North American consumer.

These arguments won over Washington's power-brokers, temporarily. The Big Three (and their creditors) now depend on taxpayer loans for survival. (The US government now owns 60% of GM and Canada's governments have pitched in, too).

Canadian healthcare: too big to fail?

Canadians love Medicare at least as much as Americans love their SUVs. Medicare is to Canada what the Model T is to America. But what if continued economic turmoil forces a Gordian Knot: a "bail-out" for whole sectors of our system that we cannot afford?

Tell Fritz. Tell Medicare.

"Tell Fritz," a feature dedicated to putting GM President and CEO Fritz Henderson in close touch with consumers, launched this week on the "GM Reinvention" Web site. It invites the public to lodge comments, compliments and complaints with Mr. Henderson in messages of 255 characters or fewer.

This is 21st century management. GM thinks it can rebuild the auto industry's relationship with the American public if it would just listen better. It's intriguing.

Imagine if 34 million Canadians helped to run the health system. Imagine if a board of directors - Premiers? Ministers of Health? - had access to a process, and to simple technology, that could elegantly synthesize the opinions of millions of consumers.

Suppose the Web site were called something like

Many customer ideas would be legally, technologically or otherwise impractical, or high-cost. Others might be low-cost and could lend themselves to relatively simple and fast roll-out. This model is a bit different from Wikipedia models of open-innovation "crowd-sourcing". It is real-time crowd-sourcing mixed with real-time, or near real-time, rapid response: what some have described as "real-time corporate governance."

Real-time Corporate Governance for Canadian Healthcare

More and more companies, following the leadership of Dell and Starbucks, are practicing an early version of real-time corporate governance. Before Starbucks launched, it found that it had many "touch points" with the customer - online surveys, focus groups, customer comment cards - but no meaningful dialogue. Today, there are 30-40 "idea partners" inside Starbucks (including executives and department heads) who respond rapidly to customer ideas and promote what they feel to be the best ones to improve the user experience.

Historically, healthcare organizations have run stakeholder engagement exercises, satisfaction surveys, consultations, whistle-blower and ombudsman programs. These mechanisms seldom sustain a dialogue with consumers to nurture innovation. Albeit times are changing: Stephen Duckett, president and CEO of Alberta Health Services, has kicked off a blog and is soliciting public input on restructuring initiatives. So far it appears like much of the response has come from providers, but this may evolve.

What happens to Board members in this model? Do they just listen to thousands of ideas and hope to be stirred to action by one or two that sound compelling? Outgoing US automobile czar Steve Rattner said that "We are not going to micromanage or get involved in day to day decisions" for GM. If initiatives such as "Tell Fritz" and others like it are to work - i.e., to successfully build and maintain trust with the customer - you cannot throw Strategy 101 out the window. The Board should not get into the business of just parroting the ideas of the loudest, angriest consumers.

To ensure that real-time corporate governance supports effective leadership strategy, ideas that bubble up from the public could be systematically linked to the Board's vision. Every idea could be mapped to a defined Board goal, such as reducing staff turnover, or improving brand loyalty. Technology will soon enable this better.

In a recent paper, "Harnessing Crowds: Mapping the Genome of Collective Intelligence," Thomas Malone, Robert Laubacher and Chrysanthos Dellarocas at MIT's Center for Collective Intelligence have examined the motivational levers for triggering the "crowd gene" to maximal effect - Money? Glory? - in order that "managers can do more than just look at examples and hope for inspiration."

Detroit, Canadian Healthcare and Trust

Cicero said to trust no one unless you have eaten much salt with him. The Big Three are struggling to maintain the trust and loyalty of the consumer, with trust and loyalty having once been the signature features of their corporate identity. In a recent one-hour discussion with the public, Mr. Henderson heard 454 questions and answered 42 of them, unscripted, and in real-time.

In the brave new world of consumer and taxpayer revolts online, any industry whose cornerstone virtue is customer trust - the North American auto industry; healthcare in Canada - should consider real-time corporate governance. In 2009, Cicero might insist: Dine with your customers every day.

About the Author(s)

Neil Seeman is a writer and Director and Primary Investigator of the Health Strategy Innovation Cell at Massey College, University of Toronto. Neil Stuart is a management consultant who has advised healthcare leaders across Canada.


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