Leadership – turning challenges into success · 2013-06-18 · Leadership is a tough topic to...
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Leadership – turning challenges into success Guten tag meine Damen und Herren Mesdames et Messieurs, bonjour Signore e Signori, buon pomeriggio G’day from Australia! Klaus Zimmermann Chief Executive Officer Eldercare Incorporated
Transcript of Leadership – turning challenges into success · 2013-06-18 · Leadership is a tough topic to...
Leadership – turning challenges into success
Guten tag meine Damen und Herren
Mesdames et Messieurs, bonjour
Signore e Signori, buon pomeriggio
G’day from Australia!
Klaus Zimmermann Chief Executive Officer Eldercare Incorporated
Comparative size of Australia and Europe
Australia – population 22,620,000- area – 7,692,000 square kilometres
Switzerland – population 7,907,000 – area – 41,290 square kilometres
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Australia is a long way from everyone…
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Chambers Pillar
‘Almost’ the geographic centre of Australia – used by early explorers as a reference point
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The Australian aged care system comprises approximately:
2,772 aged care facilities (with particular difficulties for remote sites, ie some may be up to 1,000 kilometres from the nearest township).
Servicing 180,000+ residents.
Just over 50,000 in home community care places and other home services such as Meals on Wheels.
In total more than 1 million clients each year receive some sort of aged care service.
In total this represents over AUD$11 billion of expenditure. The Federal Government pays about two thirds and the clients pay the balance.
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Leadership is a tough topic to talk about, as each of us has our own individual style. In theory, the principles about leadership are the same around the world, although there are cultural differences across countries. The Australian aged care system comprises approximately: 2,772 aged care facilities (with particular difficulties for remote sites, ie some may be up to 1,000 kilometres from the nearest township); Servicing 180,000+ residents; Just over 50,000 in home community care places and other home services such as Meals on Wheels; In total more than 1 million clients each year receive some sort of aged care service. In total this represents over AUD$11 billion of expenditure. The Federal Government pays about two thirds and the clients pay the balance. Eldercare, where I am from, owns 12 residential aged care facilities comprising approximately 1,200 clients, 1,000 staff, 200 retirement homes and a small number of community programs. I would like to briefly explain the Australian Health System, which is a universal health system. It is similar to your system here in Switzerland, but it is also different in a number of ways.
Health care in Australia is universal
Every citizen, irrespective of wealth, can access the health system in Australia which is funded mostly by the Federal Government of Australia and includes all aged care services
throughout the Country.
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This is managed through a Government agency called Medicare and is funded by general taxation revenue. Every citizen (except low income earners) pays a 1.5% Medicare Levy from income earned. This levy however is grossly insufficient to pay for all the health benefits. The rest is funded from general taxation revenue.
Medicare typically pays 100 percent of ‘in-hospital’ costs.
75 percent of General Practitioner (medical doctor) costs and 85 percent of specialist services are covered. Excluded are:
dental and optical services - except for low income earners but long waiting times can apply - up to 2 to 3 years.
Individuals can take out private health insurance to cover ‘out-of-pocket’ expenses. With either plan, this covers selected services to a full coverage plan. In practice, a person with private insurance may still be left with out-of-pocket expenses, as services in private hospitals cost more than the insurance payment.
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Now I would like to talk about leadership and change. We live in a world that is changing every second and faster than at any time in history.
An example of change
Most of the gain in the world’s health has come about in the last 60 years – since the Second World War.
The World Bank reported that health improvements had exceeded those “during the entire previous span of history”. And of course the population has soared ever since.
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Population growth over the last 500,000 years
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“The world hates change yet it is the only thing that has brought progress”
Charles Kettering – American Inventor
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Did you know, that there are more scientists alive today than there are deceased ones in the whole history of the world?
It is no surprise then, that almost every day we are bombarded with new technology and new ways of doing things.
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Technology is changing every day, so fast we can’t keep up with it. Look at the digital camera as an example, and how Kodak has had to re-engineer its entire business. Even though Kodak invented the digital camera, it is now in bankruptcy. The company is now worth only a fraction of what it was just a few years ago and its main income stream is now royalties from its patents. Making traditional 35mm camera film is a business that went downhill very fast, because Kodak didn’t read the change in its industry quickly enough; to very fast changing technology, even though it invented it. It relied on its old business models.
In 1899 Charles Duell, Commissioner of the U.S. Patents Office said:
“Everything that can be invented, has been invented”
We know how wrong that was….
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Going forward change will happen even faster, and I quote from two academics:
“We're entering an age of acceleration. The models underlying society at every level, which are largely based on a linear model of change, are going to have to be redefined. Because of the explosive power of exponential growth, the 21st century will be equivalent to 20,000 years of progress at today's rate of progress; Organizations have to be able to redefine themselves at a
faster and faster pace.”
By Ray Kurzweil and Chris Meyer
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In the aged care sector in Australia, we all work in the same environment with exactly the same set of rules and regulations. Yet there are many different qualitative and quantitative outcomes across the facilities in Australia. So how can that be? Why do some organisations do it better than others in the same industry? The answer is relatively simple but the relative industry issues of course are complex. I believe one of the significant reasons why organisations are successful and others not, has to do with the quality of management, the quality of people employed and the strategic leadership displayed by the Board and the CEO. Let me stress, that I am talking about leadership here and not day-to-day operational management, although of course that is very important. To have a successful organisation, it is about the key people recognising early on what is changing in the environment, both internal and external to the organisation, and adjusting the business proactively.
One of the major roles of a leader, is to continually scan the environment and adjust the business strategy to the impending changes or indeed
forcing the changes, ie be the industry leader
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It’s up to you as leaders in your industry to make sure that the organisations you represent are able to recognise and drive the change. Using the Kodak example, the following statement would have to be of relevance:
Confront the facts continuously
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Kodak stuck to what it knew how to do well; making film. It was a great cash flow product. Had they confronted the facts of what was going on in their industry and what their competitors were doing, they may have come up with different strategies. So what does leadership, as distinct from managing mean for you in our industry? You must have a strategic focus, what do I mean by that? When there is change in our industry by Government regulations, community expectations, labour laws etc, do you understand that it means for your organisation? Have you done any scenario modelling to understand the deep impact that may result from any changes? By understanding issues such as these, and planning forward, you have a better chance of being the best you can be for your residents and staff. Let me give you an example…
As part of my role as CEO of Eldercare, I continually look forward and keep an eye on changes in our industry, such as:
1. Labour law reform.
2. Aged care reform.
3. Taxation changes.
4. Not-for-profit status reform.
5. Health outcomes.
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I want my organisation to be proactive and strategically focus the organisation, rather than be reactive when Government changes the way we do business. Specifically in 2009, I could see that the Government was refocussing the funding for certain types of clients. I prepared a Business Case for our Board to alter the type of resident we took into our organisation and changed the types of licenses we had with the Government so that Eldercare could still deliver best quality clinical care, provide an excellent staff working environment, be a learning organisation and get the best funding income stream that was possible. Many organisations did not do this and now, in 2013, they are struggling by having the wrong resident mix and therefore not enough income as these residents become frailer. As you are aware, resident mix is difficult to alter in the short term. In Australia’s case, the average resident length of stay in an aged care facility is about 3 years. In addition, Australia has some major workforce shortages. Unemployment is relatively low. We have a very strong mining resource sector in Australia and as the population as a whole is getting older, there are less and less people in the workforce supporting an ageing population.
Over the past 100 years in Australia, as in many other parts of the world, life expectancy has increased by approximately 25 years.
Australian men and women can now expect to live well past 80 years of age.
Therefore one has to conclude that the health system has worked very well to achieve this sort of outcome.
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However with that sort of increase in life expectancy, some very macro challenges do arise for the Government and for society as a whole. Health costs are continuing to escalate very quickly due to better medicines and drugs and very expensive medical and diagnostic equipment.
In Australia in 1970 there were 7.5 taxpayers for every person over the age of 65
In 2050 there will only be 2.7
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These challenges of longer life expectancy, higher medical costs and a dramatically reducing tax payer bases pose some very challenging times ahead of us all. Leadership is about understanding what the issues are in the relevant industry and country. I have been very active in Australia in lobbying the various Government Ministers, on all sides of politics, to drive positive change through the political system. However in dealing with many politicians over many years, I have learnt it is not good enough to just take your problem to them. One has to provide the answers to fulfil the Government of the day’s objectives.
Governments and politicians have many pressures on them. Solutions have to be framed around:
social
economic; and
political imperatives
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So what is the difference between LEADERSHIP and MANAGEMENT?
1. Developing and planning on strategic issues is leadership.
2. Carrying out the plans is management.
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Regulation, Reform and Change is always going to be with us. It is how you deal with it that will determine your organisation’s outcomes.
Take the challenges and turn them into a success by understanding your business and leading from the front.
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Some Reference Sites: http://www.eldercare.net.au
http://www.health.gov.au/internet/main/publishing.nsf/Content/ageing-whatnew.htm-copy2
http://www.agedcare.org.au/
http://www.humanservices.gov.au/customer/themes/medicare-and-your-health
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However it is important to continue to enjoy life and have some fun along the way.
Vielen dank
Merci
Grazie
Thank you
Klaus Zimmermann Chief Executive Officer Eldercare Incorporated
