As we closed the books on the twentieth century, the vast majority of our consulting practice was already shifting from management to leadership, from programs to people, and from issues to systems. We found ourselves going into veterinary practices of many sizes that dealt with many species, with highly variable organizational structures, and facilitated the team restructuring projects, including:

 Zoning the healthcare facilities for staff operational control.

 Addressing economy of scale issues:

 Implementing high-density scheduling.

 Assessing vendor stocking.

 Looking at client demand before scheduling staff.

 Streamlining operations:

 Coordinators doing all the staff scheduling within their zones.

 Assessing competency as a training development need.

 Meeting client needs as patient advocates.

 Conflict resolution between practice staff and professional elements.

 Enhancing the programs and procedures, based on:

 Leadership's vision and core values.

 Assessing documented/application of the standards of care.

 Ensuring an improved continuity of care.

 Reorganizing management and clinical operations by staff members.

 Assessing the fiscal indicators for program commitment.

 Quarterly performance planning, rather than annual retrospective appraisals.

 Repositioning practices to better meet community demands.

 Succession planning for transition of practice leadership.

 Looking at colleague affiliations or potential mergers.

The frequently referred-to three-volume texts Building the Successful Veterinary Practice: Leadership Tools, (Volume 1), Programs & Procedures (Volume 2), and Innovation & Creativity (Volume 3) were written to quantify the basics needed by most all veterinary practices.

To better meet the needs of veterinary practice progression, these three texts were followed by a co-authored text with Edward Guiducci, JD, and Dr. Rob Deegan, titled Beyond the Successful Veterinary Practice: Succession Planning and Other Legal Issues. We realize, though, that the foundation elements will change so fast that new starting points will be needed for the next generation of veterinary practices.

With all this, we suddenly realized that we had done only about two-thirds of the leadership reorganization needed for the new millennium. Veterinary practices were merging, specialty hospitals were increasing, public corporate practices were emerging without a proven structure, but new management roles had not yet evolved. Veterinary medicine is truly a profession in evolution, but a revolution is required in most growing practices to break the "doctor control" tradition and expand the affiliated and administration role of staff.

The Power of WE

When expanding the affiliated and administrative role of staff, there is often a need for a new board structure and function, as well as an operational mentality of "we" rather than "me!" for the ownership. In the majority of the group-based organizations we have worked with, the people involved in a "governance role" have not known their own structure. They have not established a set of business core values for board operations, those tough business decisions.

When you talk to the chair of an emergency group or specialty group, the core values, mission, and vision of the combined organization have seldom been addressed. The organizational leadership makes decisions based on the values of the individual practice representative(s). This format is often based on "turf protection," and not based on the community needs. It is very common. And if you are not careful, these kinds of "turf protection" groups will metastasize within your staff and become a cancer. Decisions and strategic responses that are made based on the benefits to board or committee members, rather than the combined organization, are a malignant and spreading cancer that will eat away at the team-based healthcare delivery model of later chapters. The squeaky wheel gets so much grease that the real issues slide off the vehicle.

The thesis we normally take, when we consider the issue of governance, is that governance really needs to be the engine that pulls the train of change for the veterinary healthcare organization. Frequently, in America today, committees and boards are the caboose dragging along behind, and often the caboose has the brakes on. The boards are not only eluding the process of change, but they are actually the major resistant barrier to the effective implementation of change. We think that taking a look at this in terms of what boards are supposed to do, what their structure should be, and then how to streamline them goes a long way toward moving organizations to where they need to be.

Let's look at some of the classic barriers in governance and what we call the "seven deadly sins of ineffective governance."

1.  The first one is representational governance. This is most often seen with the creation of integrative specialty delivery systems in one facility. This is the most classic structural mechanism of forming group specialty systems. We do not often have alternatives in the beginning. In other words, the board specifically or implicitly represents the sub-constituent interest groups. So we now have a system board that is composed of "one-service-one-vote", overseeing the facility, separate services, and boundary-issue decisions. It works reasonably well, when you are picking a low-lying fruit, that fruit being those easy-to-make decisions. When the group must make the tough decisions, then the negative implications of representational governance rears its ugly head. In other words, as soon as you find a challenging situation, representation governance often means that instead of saying what is in the best interest of the system as a whole, the people sitting on the board start thinking in me vs we terms, as in "What is in the best interest of my subgroup," "my constituent group," or "my sub-organization?" There are two ways that you can avoid this:

a.  Really clarify roles and responsibilities, and establish job descriptions and operational expectations for all board members.

b.  When facilitating functional governance, put a great amount of energy into the removal for cause provisions, including meeting attendance, loyalty, confidentiality, and decision support. The debates and opinion exchanges that precede a decision must be retired with the vote, and one hundred percent support of the decision is required by all board members all the time.

2.  The second great sin of ineffective governance is lack of mission focus. Boards who don't have a shared understanding of what it is the organization is attempting to do cannot accomplish the appropriate outcomes. Let us assume that you have a board now composed of individuals who each have a different idea as to what the purpose of the organization is. Each has a different implicit idea as to what the real mission of the organization is. The group has tremendous difficulty, because they are going to have inconsistent and unpredictable decision making, which, paradoxically, is going to alienate the very stakeholders they are trying to integrate. So one of the fundamental characteristics of effective governance is that the board has an agreed-on belief system, a principle-based foundation for decision making, which is equally and constituently applied in all situations
One of the core characteristics of an effective board is that they have an agreed-on belief system. It's not, "What do I believe is right or wrong?" It is, "What does the group as a whole believe is right or wrong?" They use the board's foundation core values, vision, and mission focus for the basis of their decision making. Many mission statements look beautiful, but are nothing more than pablum on a piece of paper.

a.  What is the definition of a good mission statement? A good mission statement helps you make difficult decisions. Take the three or four most difficult decisions that your organization has made in the last couple of years, or project the most challenging decisions that you think your organization will face in the next four or five years, and compare those issues to the mission. If the mission, more often than not, fails to give you guidance, it is not a meaningful mission.

b.  A clear mission focus helps you make difficult decisions and it helps the board to make consistent decisions. Now we have two format issues for governance. One is that many of them have not spent the required time defining a meaningful mission focus. And two, the ones that have established a focus do not use the core values in their decision-making process and start to develop an implicit mission. The most common implicit deviation is generally personal survival or financial viability. So, you will see the written mission being "care of the community" and the implicit mission being financial viability. This type of implicit mission generates inconsistency and unpredictability, and high staff turnover is usually seen as a result.

3.  This probably the biggest one we confront: the tendency of boards to resist change, rather than to lead it. This is a great problem, because, when you are in an environment of revolutionary change, the concept and role of leadership changes as well.
In periods of great stability, those periods that we're leaving behind, and in static periods of slow incremental change, the role of leadership was fundamentally to keep things as they had been, to maintain stability, and to maintain predictability. Most veterinarian-based oversight groups try to make sure that the process of change is not too disorienting or disruptive, and that it is fairly incremental, even "glacial" at times. This is called the "committee form of reference" in most professional associations.
In periods of revolutionary change, where we are now, the past is no predictor of future success. This is where you can't make linear predictions based on what happened yesterday, or based on what is happening today. The role of the leader is not to keep things the way they have been, or ensure that things are comfortable, but to facilitate the process of change.
One way of addressing this is by board composition. We recommend that a combined specialty practice add a member from the local VMA executive board, or for an emergency practice, a member from the local humane society. These are safe members, IF the board job descriptions and mission focus are a charter for each board member.
The second mechanism is to push forward with the need to create the future. This is very frightening, because this model of leadership requires the board to anticipate what is going to happen and to start the changes before they are needed. Suddenly the board is no longer the friend of the status quo, but the agent of change. Suddenly you have a very tension-ridden model of leadership, where the fundamental dynamic of leadership is to break the mold of complacency and to create tension. This almost creates an adversarial relationship.
When you take a look at leaders who bring their governments or countries through great periods of disruption, they tend to be dumped after the disruption. That's why Winston Churchill was not re-elected following WWII, and that is one of the reasons I suspect that the United States did not re-elect George Bush, Sr., following the Gulf War. We say, "That was great, thanks very much, get out now, we're done."
This is a very different model of leadership with which boards become comfortable, and when confronted with this less-than-laudatory role, most veterinarians will tend to back away from it. That is why most veterinary boards will interpret their role as maintaining stability, forestalling change, rather than being the agents of change. This then creates what is called the "dam effect", when the longer your actions keep change away, the more the force builds up, so when changes come, they come with almost an irresistible force that sweeps everything away. Therefore, re-education is needed.

a.  The board says everyone needs to change. Management needs to change, the doctors need to change, we are going to have to change the staff, but then they say, "We are going to keep the board the same." When keeping the same structure, you are going to get the same information, because the same people on the board are measuring everything to the old metrics. This is typically seen as a board's reluctance to change themselves, and is changed by redefining the playing field, as in mission focus, core values, vision statement, job descriptions, etc.

b.  Governance is often one of the last vestiges resistant to change that we are seeing in any healthcare arena. They must confront themselves and ask, "Where is the logic to this resistance?" The answers are very interesting. Most will recognize that it is fairly illogical, but are emotionally unwilling to do this. So, in many cases, some consulting group is hired to be the outside change agents.

4.  The next is bad governance information. One of the reasons that the board succumbs to these first four sins is that they are getting bad governance information. They are getting old-style, process-oriented, warmed-over, management reports, based on old metrics. For example, they ask, "How high is the ACT this month", which is an outdated factor in a recessionary or stagnant economy, rather than asking, "What program commitments have helped our net grow?" or "How many visits per pet per year are we seeing under this new system the doctors committed to at the last quarterly budget meeting?" Old management information usually forces the veterinary team to monitor what "has happened", as opposed to focusing them on "the future and change dynamics". In some cases, the board members are fixated on getting information that is their personal favorite, such as imaging, surgery, dentistry, etc. So, they focused on hospital inpatient activities, thirty percent of income for seventy percent of the costs, when most of the real business is coming from outpatient/wellness sources, which comprises seventy percent of income for thirty percent of the costs. It is very common to see a disconnection between the data that a board gets and the stated strategy of the organization. This is one of the classic barriers to effective governance, which, again, is based on poorly understood mission focus.

a.  The executive group needs to change the "raw data" into information before the board gets the paper. There must be a major emphasis centered on external forces, such as referral rates from general practices, if it is a specialty practice.

b.  When addressing internal issues, the board must address hospital policies from a general oversight perspective, looking at boundary issues, as well as addressing the strategic positioning of the complex.

5.  Another classic sin is failure to dump the dead wood from the board. This is one of the tasks that most boards avoid like the plague; which means firing some of their own members. A progressive board charter has two characteristics: a mechanism to remove a board member from office midterm and the criteria to do so. Think about the by-laws of the board:

a.  The board by-laws need to communicate to every member of the board that the organization is what matters, and that the board is a group that represents the practice entity and its prosperity systems. The board does not play around with the mission focus or core values of the healthcare delivery team! Many people on boards do not understand that the fundamental role of a board is to operate as a cohesive business-first group, which means individual board members have no independent authority. There are many veterinary board members who feel if they argue against an issue, and the board votes a majority to the contrary, it is their duty to work against the vote of the board. That is not the case in any shape or manner. When debating an issue, even one that you are passionate about, if you are in the minority and the board votes against your view, there are only two choices: fully and passionately support the vote of the board, or resign from the board.

b.  If a board member remains on the board and works against any vote, or constantly reintroduces a previously defeated motion for the vote, the board should correct the member's behavior. If a board member was in the majority on a vote that passed, then constantly abdicates support, because he has changed his mind, the board should correct the member's behavior. If the board does not, it fractures the board performance. It creates cliques, and you begin to see a kind of death spiral of board function.

c.  Boards need to create a culture of performance and accountability. No one is allowed to join the board unless the individual is willing to meet these performance criteria characteristics. Criteria address the basic things, like violation of conflict of interest policies or confidentiality policies, or meeting attendance, or one hundred percent support of board-voted decisions.

d.  If a board has someone who is not coming to the meetings, violating the conflict of interest parameters, or ignoring any of the decisions of the board, they should be off the board. Address the qualitative issues as well: thoughtful participation, reviewing the agenda materials before they attend the meetings, not being a one-issue participant, not subverting the work of the board, etc.

e.  Boards should have term limits. There should not be automatic renewal of term limits. For example, if a three-year term is established, with a maximum of three consecutive three-year terms, no one is guaranteed to serve on the board for nine years. During and after the first term there is evaluation against the criteria. If the member has met performance criteria A, B, C, and D, and if the skill sets are still needed on the board, then the member will be invited back. But automatic renewal of terms creates this notion that it is a club, rather than an evolving entity or functioning organism. In most practices, establishing a governance board for the first time, we like to stagger the initial terms: one third have a one-year term, one third have a two-year term, and one third have a three-year term. Subsequent board members, by election or selection, serve for a three-year term of board service. In this way, there is a continuity of knowledge and a maturation of board understanding of members over their respective three-year terms.

6.  The next sin is maintaining the cumbersome, out-moded, governance structures. Winston Churchill said, "First we create our structures, then they create us." Many traditional veterinary governance structures are adding costs to the system, but not adding value.

a.  There needs to be a recurring assessment of how much time the governance structure takes. How much of an administrator's time is spent preparing, attending, or following up on board and board committee meetings? Anything over twenty percent should start sending warning signals. We've seen it as high as seventy-eight percent. The manager's time was spent preparing for, attending, following up, and talking to shareholders, who all considered themselves directors; attending meetings; and answering individual inquiries of the shareholders. We regard this as adding a tremendous amount of cost and giving little to no value, when measured proportionally to the expenditure of that cost. So, we did what we had to. We made elections occur to form a three-person operations committee, accountable for governance and administrator oversight, called them the directors, and reverted the remaining shareholders to a "hands-off", fiscal-based, pool of potential directors, elected at a rate of one per year.

b.  The board must create value in their decisions, which accounts for the external focus on client satisfaction and access. In the case of emergency hospitals, combined specialty hospitals, and other referral hospitals, the primary client is the referring veterinarian, general practices in the area, or in some cases, brood mare farms, or even horse trainers at large facilities, but not the animal owner. This is why timely referral letters, inter-service harmony, as well as never "bad-mouthing" a referring agent, are considered boundary issues for governance.

7.  The seventh sin, a very important factor, is lack of board job descriptions. You don't have to be a genius to figure out that a group that does not know what its job is isn't going to do it very well. We are constantly struck by the fact that when you ask each board member what the job of the board is, you get different answers from each person. There is no basic agreement and no common understanding of what the board is supposed to do. Once again, this allows for a lack of strategic alignment, and permits the board members to go in different whimsical directions.

a.  Failure to understand the core business of the organization occurs as a specialist moves from being "a knowledge broker providing services to acute individuals" to "a service providing healthcare support to general practices scattered through an increasingly desperate community." The core business begins to change. The inability of any particular specialist to overcome the "me" paradigm makes "turf wars" and governance intervention inevitable.

b.  The keeper of the core business, and the group that focuses the organization's resources on the mission, is the board. If a board doesn't understand this, then there will be serious problems. We find operations committees formed, with the implicit purpose of protecting their favorite piece of the system, protecting the practice and its traditions, or protecting some outdated alliance. This is a classic barrier. A variation of this mind-set is the inability to convince advocates of the "cash cows" to accept the system strategy. It is very difficult to get people, who feel they are governing from a representational perspective, to take this critical characteristic of leading during a period of change, and be willing to take the dollars that are being generated from the businesses of today and invest them in growing the veterinary businesses of tomorrow.

c.  Many of the veterinary healthcare systems we work with are composed of individuals who came from residency and academic environments, the epitome of not-for-profit operations. They carry these non-for-profit paradigms like the Holy Grail, and basically think that the purpose of the system is to maintain and enhance their clinical skill set. They don't realize that the fundamental characteristic of a system is that not one piece of a system is any more important than the system as a whole. That every piece of the system exists to enhance the system as a whole, and pieces of the system can be sacrificed or expanded, as necessary, to meet the strategy of the system.

There is no time for ease and comfort. It is time to dare and endure.- Winston Churchill