Reclaiming your future: entrepreneurial thinking in health care - Book Excerpt

Physician Executive, Jan-Feb, 2003 by Edward J. O'Connor, C. Marlene Fiol

Most of what you hear about entrepreneurship is all wrong. It is not magic; it is not mysterious; it has nothing to do with genes. It is a discipline, and, like any discipline, it can be learned.

--Drucker. 1985 (1)

Entrepreneurs have contributed significantly to the growth of the U.S. economy. They have created over 90 percent of the wealth in America since 1980. (2) As the Fortune 500 lost millions of jobs during the 1980s and 1990s, the entrepreneurs of our country created the jobs that fueled the economic expansion that extended to the turn of the century.

As recently as 1980, the Fortune 500 employed one in five members of our workforce. By the late 1990s, the number was just one in 14.2 Not only have entrepreneurs created jobs for others, but they have also created significant wealth for themselves. For example, 72 percent of the 400 richest Americans in 1997 acquired their wealth as first generation entrepreneurs.

Why might entrepreneurship be interesting to you as a health care leader? The answers go well beyond money. Entrepreneurs report the highest level of professional satisfaction and pride in our society. (2)

Independence, adventure, fun and the opportunity to implement new ideas draw them in. Would similar results be interesting and valuable to your health care organization?

Entrepreneurs are clearly interested in health care. With the annual industry spending of more than one trillion dollars, health care represents a huge market opportunity. In addition, entrepreneurs are drawn to change because transitions are seen as a time when you can identify great opportunities that, in stable conditions, would not be readily available.

While people invested in maintaining the old health care environment may perceive these changes as a source of stress, frustration, confusion and fear, entrepreneurs see the disruptions as opening doors to new competitive opportunities.

If you believe that entrepreneurship is limited to creating and managing new, small and family enterprises, you need to think again. While it may include many such ventures, entrepreneurship is not about size. It is also not limited to rapid-growth ventures and the people who make them happen.

Entrepreneurship is about a way of thinking and behaving. Entrepreneurs are people who are engaged in the process of creating and building something of value from practically nothing. They focus on doing and producing rather than watching and talking. Success flows to them as they focus on sensing opportunities, marshalling resources, taking calculated risks and pushing ideas through to reality.

Entrepreneurial thinking in action: some examples

What would you think of an organization that had revenue increases of 18 percent one year and 13 percent the next year, that had earnings increases of 11 percent each of these years and earnings per share increases of 13 percent during the same periods, and that provided its investors with a total return of 45 percent in the first of these years and 40 percent the next year?

It might sound to some like a firm exhibiting well-managed, under control, entrepreneurial growth. It is. It was also, at the turn of the century, the most highly valued for-profit corporation in the world. The name of this organization is General Electric. It was led for almost two decades--until 2001--by Jack Welch, one of the most successful senior executives and entrepreneurs of the past 50 years.

Organizations do not have to be small to be entrepreneurial. GE demonstrated extraordinary capacity during the past two decades to sense opportunities, apply resources, take risks and push ideas successfully through to reality. The company both empowered its employees and demonstrated its commitment to outcomes/results by minimizing bureaucratic processes and rewarding outstanding performance.

Southwest Airlines is another giant that exemplifies entrepreneurial thinking. True, they started small, back in the 1970s. However as an organization with over 30,000 employees, it provides a remarkable example on an ongoing basis of getting more done with less. This action-oriented, results-driven organization was the only airline to maintain profitability each year throughout the early 1990s, as its industry reeled under massive losses. (3)

In recognition of this performance, Southwest's market capitation in 2001 was larger than that of three of its bigger competitors (i.e. American, United, Continental) combined. (4) And how did they do this? Through their spirited entrepreneurial people who continue to demonstrate goal-directed behavior in the pursuit of their vision. For the people of Southwest, theirs is not a job; it is a crusade.

Today's answers to tomorrow's health care challenges

You might argue that the above entrepreneurship examples are not health care organizations. What can we possibly learn from them? How might entrepreneurial thinking be applied in your complex industry?

Griffin Hospital in Derby, Conn., provides one clear example of positive results flowing from entrepreneurial thinking in health care. (5) After experiencing difficult years, this organization followed a distinctive, entrepreneurial path to its current enviable level of success.