Monthly Archives: October 2013

Culture as a (the Only?) Sustainable Competitive Advantage

The patient care case for culture is easy.  The providers on the front line of health care get it.  For decades the focus of health care leadership has been on efficiency as opposed to quality and patient care.  Health care organizations, top-heavy with MBAs, have applied all of their efforts toward cutting excess.  Definitely a necessary mission.  But with the health care system in crisis it is time for a change.  The drive for efficiency has crossed the equilibrium line and care and quality have started to be compromised (references available).  And where have the savings gone?  Certainly not passed along to patients or providers.  Providers and patients want the future to be about quality, outcomes and value.  And the foundation for quality and value is culture.  But not everyone is on board with culture.  That top-heavy leadership still would rather grind the bottom line.

So what about a business case for culture?  What can a focus on organizational culture do for you?  According to a post by George Bradt at Forbes.com in 2012 corporate culture is the only way that an organization can develop a sustainable competitive advantage: “Corporate Culture: The Only Truly Sustainable Competitive Advantage”.  Not buying it?  Well the argument that Mr. Bradt makes is as follows.  Competitors can hire away top employees.  Competitors can reverse engineer your product and duplicate your services.  Culture on the other hand is more complex.  Mr. Bradt makes a very unique analogy between music and culture.  He notes that all music is composed from the same 12 notes but there is good music and bad.  All culture is based on the same 5 components and of course then there are good cultures and bad.  Mr. Bradt states that all culture is comprised of: (1) behavior (2) relationships (3) attitude (4) value and (5) environment.  It is the association of these components that defines a winning culture that provides a sustainable competitive advantage. It’s the people and their interactions.  It is very reminiscent of a previous post where winning culture was likened to making 2+2=5.

The leadership of health care organizations should pay careful attention.  It’s time to get rid of the top-heavy health care system where minions spend every waking moment on efficiency while completely ignoring quality.  The game is no longer about initiatives that result in small incremental improvements.  Any room full of monkeys can do that these days so there is no great advantage.  Efficiency can now be looked at as a commodity.  Mr. Bradt’s post provides an eye-opening argument on how culture provides the only sustainable competitive advantage for an organization.