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Leadership stands out in uncertain times

March 1, 2009
by Barry W. Karlin, PhD
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The impact of our economy's trials and tribulations on the addiction treatment industry is no different from that of any other business sector. All three payer bases have “clouds”: Public payers are threatened with loss of tax revenues, commercial insurance is equally threatened with loss of covered lives resulting in lower revenues; and private pay is hit with job losses, lower consumer confidence and the inability to finance treatment through loans. Clearly these forces have profound consequences for companies in the addiction industry, including reduced census, shorter lengths of stay, “dumbing down” of treatment to lower levels of care, the need to cut payroll and operating expenses, and the delay of program expansions.

This article focuses on one important quality in times such as these: the need for terrific leadership. Great leadership does not guarantee that a company will successfully emerge, but it certainly greatly increases the odds. Further, poor leadership will very likely result in a company's demise.
Whether in politics or business, strong leadership is needed to pull us through difficult economic times. The realization of our long-term goals might be delayed, by two to three years or more, but the company that succeeds in skating through these turbulent times and reaches the other side will have a stronger foundation characterized by a lower cost structure, a clearer vision with a newly refined road map to the future, and a more unified staff.
Weak or indifferent leadership can be accommodated in times of prosperity. In troubled times, however, strong leadership and prudent decision making are indispensable to an organization. Tough times require leadership, vision, perseverance, determination, quick reactions, a willingness to make hard choices, and commitment.

Depth of analysis

Seeing what is obvious is not the stuff of leadership. When times are challenging, the leader must confront issues head-on by posing such questions as: How deep is the crisis and how long will it last? What are the implications for my organization? How will this affect my patient census? How do I retain my best employees? How do I ensure that treatment quality is not compromised? What steps must be taken to come through the challenge while remaining true to our mission?

For many of us, the downturn means fewer patients and resources, and thus the need for greater cost controls. We treasure our employees, our vision for the future, and our ability to offer aid to those in need of treatment. Yet swift, decisive action is essential to ensure that our companies make it through this economic crisis and are positioned to flourish in better times.

A critical component of an action orientation is to communicate clearly the path one has chosen, to organization members at every level. Intelligent decision-making requires the support of a cohesive management team. When executives see eye to eye, have a good camaraderie and are able to set politics aside to make tough decisions, the company is much more likely to survive. The addiction industry in contrast to many other business sectors has actually fared relatively well thus far, no doubt a consequence of the severity of this disease and the critical need for treatments for people in acute distress.

Communicating a message of hope and clear direction cannot be a one-time action. The message must be imparted frequently to staff. As leaders, our employees and the community look to us for answers: Is my job in jeopardy? Where is the company headed? We must provide those answers as openly as possible. Achieving this requires two-way communications.

Most people understand the toll the economy is taking on individuals and businesses. What maximizes their anxiety, however, is a lack of feedback and direction from the executive team. The leader must make employees feel heard and respected. To achieve this, the leader must take time to listen to employee suggestions. Then, whether or not the leader agrees, he/she must reflect that the message was heard and that he/she shares their concerns. To further motivate staff, leaders must recognize and reward both small and large accomplishments as frequently as possible, albeit with modest awards (it is the recognition that counts).

Equally important is providing a clear road map for achieving the company's vision. Having a clear-cut plan gives everyone a sense of purpose in their work. Leaders who vacillate inspire fear and uncertainty in followers. To quote Gen. Barry McCaffrey: “If you are in charge, for God's sake act like it.” Furthermore, projecting self-confidence reassures followers and builds morale that will help them focus on what is critical to program quality and what can be postponed or done without.

Maintain critical activities

We must sustain our responsibilities to our professional communities in these tough times. Because of the nature of the healthcare business, clinical progress depends on proactive participation in conferences, national events and research studies.

In a larger sense, as treatment professionals we're dealing with people and problems that affect their local communities as well as society at large. As leaders, we must promote innovation in the healthcare industry, abide by the highest ethical standards, advance the science of treatment, support community-based programs, and serve as role models for our employees and other treatment providers. Certainly the scope of these activities will likely need to be reduced, but they should not be abandoned entirely. Without them we cannot do justice to our patients long-term.