Healthcare organizations’ governance and management are often understood as separate entities. On the one hand, the Board of Directors (BoD) usually deploys its own governance operating model through a committee structure. It manages its mandate bestowed upon the BoD by the organization’s official statutes with a decision-making process that fuels Board resolutions. It shapes and approves strategic directions and puts in place a system to ensure oversight of key performance expectations and metrics. The BoD represents a crossroads where government’s directives, executive leadership reports and proposals, lobbying from diversified interested parties and media coverage converge and fuel ongoing strategic steering. We stress below that the nature of this crossroads goes beyond the BoD’s fiduciary duty.
On the other hand, the organization’s executive leadership is mandated to put in place a management structure in order to run the business operations and execute strategies decided at the BoD level. In public and universal health systems such as the ones we have in Canadian provinces, the strategic directions often flow from elected government’s expectations and are subjected to scrutiny and lobbying from a diverse group of interested parties such as medical staff, unions or the media. Such a context is not naturally very conducive to taking risks and promoting innovations health. In fact, innovatinghealth in our public systems is not an easy undertaking. So, how can we foster innovation given that our health systems need to reinvent themselves and refresh how they go about their business? How can we create an innovation-friendly environment within organizations that are bound by quality, reliability and performance imperatives?
Risk management is most certainly one important piece of the solution given that risks can significantly slow down the innovation health drive. There are many different kinds of risks. They can be clinical, corporate, financial, reputational, cultural and in many other forms. In a nutshell, risk management is necessary everywhere. It also comes to bear on all areas of the organization with ramifications going from top to bottom and vice versa. Introducing innovations exacerbates the risk management complexity as the very nature of innovation is uncertain and sometimes volatile. Innovation challenges status quo and, by doing so, may generate unforeseen, aggravated or simply new risks. Those risks must be evaluated and controlled. Our health systems must be reliable, predictable and validated in everything they do. In such a context, the BoD role is even more important because, as was stated above, the BoD is the crossroads of numerous sources of information, governing mechanisms, stakeholders and decision-making processes.
Beyond its fiduciary role, the BoD governance can become a cornerstone to help innovation projects emerge and to offer support to bring them to fruition. The required elbow room for innovation to thrive is not spontaneously created. It must be well rooted in the different decision-making flows that converge to the BoD and its governance process. To reach that goal, powerful leverage can be found in a well-oiled risk management system. Healthcare innovation is all about new and emerging knowledge, practices and processes that come to bear on the local state of affairs by introducing improvements that often have a potential to be useful elsewhere. Introducing such innovations must be done from a standpoint where the vision is clear and shared by all key stakeholders. As such, a close partnership harnessed to a reliable risk management system may enable a common will to emerge and dare venture on roads less traveled by taking calculated risks in order to foster innovation. Once established, a sound risk management system facilitates the assessment of such risks and also the development of an appropriate framework within which they may be monitored in a reassuring way.
The BoD governance therefore finds itself at the heart of the dynamics that is essential to support innovation health and its risk management system is the cornerstone of it. Innovation challenges status quo and this comes with a number of risks to be managed. Partnership and trust between stakeholders involved are essential. The BoD governance process acts as an anchor point and the risk management system firms up the anchoring. Thus, numerous stakeholders can coordinate themselves in an efficient manner in order to steer through our health systems’ complexity and help them innovate.
It is interesting to note that, as we drive this logic regarding innovation and risks, we touch on certain foundational elements of another parent concept, which is « shared governance ». This approach is fast emerging and is used for a number of objectives beyond fostering innovation such as quality control and continuous improvement. As is the case for innovation as it relates to risks, « shared governance » also reinforces the importance of ensuring that all stakeholders associated with a shared objective take part in the decision-making process. Further exploring of the concept of « shared governance» would certainly reveal its full value for health systems. It will be worth our while to dig deeper and this will be great fuel for future articles…
In the meantime, may you be well, may you be happy.
B.