Tuesday, May 12, 2015

Health Service Integration Project - a lesson in project governance


Health service integration means different things to different people.  In this article I am referring to the integration of health services between two different healthcare organisations following the commercial acquisition of one business by another.  

This is slightly different idea from the traditional concept of health service integration, which is a commonly defined as bringing about "the management and delivery of health services so that clients receive a continuum of preventative and curative services, according to their needs over time and across different levels of the health system."

I am using a bit of literary license here and have been vague on purpose to highlight the issue of good governance.  Any integration project, whether its integrating newly acquired business entities or integrating the delivery of health services, requires the foundation of good governance and seemless integration between strategy and operational activity for success.  

Project Governance is simply 'the mechanisms, processes and relations by which organisations are controlled and directed'.  A project can have a really great strategy, but if the project management mechanisms, processes and relations are not set up properly and inhibit people from actively carrying out the taking required actions then the integration of the services is blocked before its even started.

A  while ago in my career, I was involved with a health organisation that purchased another business (a commercial acquisition).  Within the new business was a unit that provided health assessment services directly related to those performed by the department that I managed.  This business unit had around $1 million revenue per annum which was not huge but still significant in relation to our department.  We were not directly involved in the commercial acquisition process, instead the integration strategy was devised by senior executives who were responsible solely for sealing the deal.  It was assumed that once the purchase went through, that my team would be able to take over the services carried out by this other team.  The strategy looked good in theory and the responsible executive had created a 90 day plan onboarding plan.

As I previously mentioned, my department which included the primary operational team were not involved in the purchasing decision or strategic planning and were only told about the purchase and planned integration two days prior to the purchase.  In addition, once it did go ahead, it seemed that nobody was responsible for the project.  The service revenues and expenses were moved onto my P&L statement, but there was nobody or no governance group ultimately responsible for signing off on major decisions.  This was pretty messy for an organisation of over 200 people. 

It was assumed that the two services were similar and one could just be plugged into the other.  This was a big mistake!  Of course there were a host of relationships, systems and processes that were unique to each department and could not simply be 'plugged in' and if the operational workers has been asked about this up front they could have informed the decision makers early.  There is an interesting article from Harvard Business Review, titled When Emotional Reasoning Trumps IQ that outlines the neuro-psychology behind integrating project strategy and operations.

I did what I could to manage and lead the project from here.  I was not and still am not an accredited Project Manager but I did have a reasonable amount of experience managing small to medium sized projects.  My primary experience was in PMI project management methodology with some understanding of agile/lean working environments so I was able to prepare a framework and drive things forward to a point,  but we were playing catch up and at the time I did not have the seniority in the orgnisation or the required influence to be able to make the important decisions.  The way the organisation operated I was unable to directly influence project governance.

Here is what I did:
  1. IDENTIFIED AND ENGAGED with key stakeholders in the other team and throughout key business departments, primarily our IT and Finance departments. 
  2. DRAFTED A PROJECT PLAN with key requirements, road blocks and contingencies and created a detailed Gannt chart highlighting key dates and relationships to other major projects. 
  3. Having engaged the key stakeholders, we DEFINED THE PROJECT PHASES and required steps:
    1. Planning phase
    2. Urgent transition phase -  identifying capability required to maintain BAU Requirements
    3. Migration planning phase - preparing for overall service integration
    4. Migration of relationships, resources and materials
    5. Synchronised infrastructure switch
    6. Service integration/handover
Unfortunately though, even with a solid project plan the project was fundamentally flawed because there was nobody with clear and defined accountability.   I had taken a certain amount of responsibility but when it came time to make the major decisions there was no owner.

My manager at the time could have taken this role, but it had not been given to her and she had other reasons not to pro-actively campaign to take ownership herself.  The original project manager was leaving the company partway through the project so did not have any vested interest and had effectively signed off.

In my opinion the poor project governance derailed the project before it had even started and as a result it floundered affecting the performance of the department and the company.  The integration blew out from three months to almost one year and in that time client relationships were damaged and a lot of the value of the newly acquired business was lost.  Some entrepreneurs might argue that models of governance inhibit entrepreneurial freedom, but good governance should not be onerous and mechanisms can be built in for handing responsibility down where possible. 

So what can we learn from this?  What could we have done differently to make the project more successful? 
  1. ACCOUNTABILITY - Firstly, I believe that there should have been clear single point of accountability for the project.  By the time this finally happened, it was already 5-6 months after the acquisition
  2. STRATEGIC INTEGRATION - Operational people should have been actively consulted and included in the up front strategic planning so that strategy and operations could have been woven together more seemlessly.
  3. ALLIANCING - Finally, as a bit of a left field idea, I wonder if an 'Alliance governance model' could have been employed to carry out the project. 
What is alliancing?

Alliancing is a method of managing projects where parties work collaboratively to deliver the project.  It is a model with a defined working framework and associated agreements that is generally employed for large complex construction/infrastructure projects where risks are not well known, but interestingly has become increasingly used in the delivery of healthcare in New Zealand.  This model of project management is not generally employed for small scale projects such as this yet, but I believe it has value and should be explored as an evolution idea into the future.

Alliance contracting is characterised by a number of key features, which generally require the parties to work together in good faith, act with integrity and make best-for-project decisions. The alliance participants work as an integrated, collaborative team to deal with key project delivery matters.
Under alliance contracts, risks of project delivery are often jointly managed by the parties.

In a project such as the one I described above, stakeholders from both the departments, the one doing the acquiring and the one being acquired could form the alliance team.  In addition team members from the finance and IT departments could also be involved.  If a team like this was able to collaborate right at the beginning of the project with clear guidelines on accountability, responsibility and reporting, it might have completely changed the dynamics of the project.


  



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