Halamka: Facing down VUCA, and doing the right thing

How do IT leaders deal with unpredictable demand, increasing expectations, constantly changing technologies, escalating compliance requirements and fixed budgets? They need to accept and manage VUCA.

You probably know VUCA even if you don't know the acronym. It stands for volatility, uncertainty, complexity and ambiguity. It arose in a military context in the 1990s, when VUCA might have been used in reference to Somalia, for example. More recently, it's been applied to organizational leadership by several authors, most notably Bob Johansen, former CEO of the Institute of the Future.

Johansen's take on VUCA is that it will only get worse. But its presence creates both risk and opportunity, he says, and strong leaders are able to redefine the acronym by turning volatility into vision, uncertainty into understanding, complexity into clarity, and ambiguity into agility.

One of his more interesting observations is that VUCA has tremendous implications for "commons building," which you may know better as "coopetition," or cooperative competition.

My experience is in healthcare IT, so let me give you an example of commons building from that field. Fifteen percent of the lab and radiology tests done in eastern Massachusetts are redundant or unnecessary. Ensuring that all test results are available electronically among all providers (especially competing organizations) will require millions of dollars for implementing electronic health record (EHR) systems, health information exchanges and interfaces. Thus, we'll have to spend money for a system that will reduce our incomes, since the goal is for healthcare providers to administer fewer tests overall. It's the right thing to do, but VUCA can block the path to the right thing. In this case, the medical IT commons will be at odds with individual providers' incentives in a fee-for-service world. So how do you neutralize VUCA? You change the incentives and pay individual providers for care coordination, not for ordering more tests.

Think back to 2008. The Obama campaign suggested that EHRs were the right thing to do. At Beth Israel Deaconess Hospital, we could see signs that a big stimulus package would be forthcoming, but large-scale EHR rollouts require significant lead time and wouldn't qualify for stimulus funds. Still, we wanted to move forward with EHR. We decided that a software-as-a-service model was the way around the VUCA, and we created a private cloud. To us, it seemed like the right thing to do because it kept all software and data on the server side rather than in doctors' offices. Today, people look at our community EHR model and congratulate us for being ahead of the curve on private clouds. But we weren't trying to be a trendsetter. We just had intuition based on the market forces and technology trajectory we saw -- and we guessed. I'd like to be able to say we built a private cloud on purpose, but it was a serendipitous guess.

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