Why Organizations Often Wait Too Long to Seek an Outside Perspective

Most organizations experiencing a persistent financial or operational problem are not doing nothing. Ownership and management may have spent months changing processes, adjusting staffing, reviewing reports, holding meetings, and implementing corrective actions.

But activity does not necessarily mean progress.

When those efforts produce little lasting improvement, one possibility deserves serious consideration: Is the organization solving the underlying problem—or repeatedly treating its symptoms?

Treating a symptom can produce short-term improvement. Expenses may decline temporarily. Productivity may increase. Cash flow may improve. A staffing issue may appear to stabilize. Those results can understandably reinforce management’s belief that the organization is finally moving in the right direction.

But if the condition causing the symptom has not been correctly identified and addressed, the improvement is unlikely to last. The same symptom may return, or different symptoms may emerge from the same unresolved cause.

This is one reason organizations often wait too long to seek an outside perspective. Each new corrective action offers another opportunity for improvement, and each temporary improvement can make it appear that the problem is close to being resolved.

At what point, however, does persistence become delay—and what is that delay costing the organization?

When the Identified Problem Is Not the Actual Problem

Turnaround work was not something I initially set out to offer. It developed organically during the early years of my consulting practice.

Home health and hospice organizations would bring me in to address what appeared to be a relatively specific financial or operational issue. Often, ownership and management had already devoted considerable time and effort to correcting it, but with little lasting success.

In many of those situations, the problem they had identified was actually a symptom of something deeper.

Using the financial and operational models I had developed, I was able to analyze what was occurring, connect results across different areas of the organization, and more readily identify the underlying cause. That gave ownership and management the information and understanding needed to implement solutions capable of producing sustained improvement.

This distinction between a symptom and its cause is critical.

A declining margin, for example, is a symptom. Rising costs per visit, lower productivity, increasing LUPAs, excessive utilization, staffing instability, deteriorating cash flow, or unfavorable budget variances may also be symptoms. Each one is important, but none necessarily explains why it is occurring.

Responding to a symptom without understanding its cause can consume significant time and resources while allowing the actual problem to perpetuate.

As the situations I encountered became more complex, it also became clear that some could not be adequately addressed through a three- or four-week project. They required a more comprehensive engagement that extended beyond identifying the problems to helping management implement the necessary changes, measure the results, and stabilize the organization.

That was how my turnaround engagements developed—not as a service I initially set out to offer, but as a response to what organizations needed to achieve sustained recovery.

Problems Rarely Remain in One Place

Generally, the sooner an underlying issue is correctly identified and addressed, the more contained—and often less costly—it is to correct.

An issue that has existed for three to six months may still be difficult to resolve. However, it is often less complicated than one that has persisted for 12, 18, or 24 months.

The longer a problem remains unresolved, the greater the likelihood that its effects will spread beyond the original issue.

What begins as a productivity concern can eventually affect labor costs, capacity, patient care planning, employee workloads, and profitability. A revenue-cycle issue can create cash-flow pressure, delay payments to vendors, restrict necessary investments, and consume management’s attention. Recurring financial underperformance can lead to repeated cost-cutting efforts that do not address the actual cause—and may ultimately make the situation worse.

The cost of waiting is not limited to the eventual cost of outside assistance. It may also include months of lost profitability, declining productivity, avoidable turnover, management time, missed opportunities, and corrective actions that consume resources without addressing the underlying cause.

By then, the original issue may no longer be the only issue.

Over nearly 15 years of turnaround engagements, I have repeatedly seen organizations that had spent substantial time and effort trying to correct their problems before seeking outside assistance. Despite management’s best efforts, the underlying causes remained unresolved. As the problems became more significant or widespread, they affected additional aspects of the operation and made the eventual solution more complicated.

In many cases, the complexity encountered during a turnaround was not inherent in the original problem. It developed over time because the underlying cause remained unresolved.

The Impact on Employee Morale

One of the most significant—and often most challenging—effects to address is declining employee morale.

Employees frequently recognize or feel an organization’s deterioration well before its full extent is openly acknowledged. They experience the changing expectations, additional pressure, recurring initiatives, staff turnover, uncertainty, and repeated attempts to correct problems that never seem to go away.

Many of these employees have invested considerably in the organization, both professionally and personally. They care about its patients, their coworkers, its mission, and its success.

As conditions continue to decline, however, frustration can become disengagement. Employees may lose confidence that the next initiative will be any more successful than the last. Some may leave, including people with the experience and institutional knowledge the organization will need to recover.

Financial and operational problems can often be quantified. Their effect on employee morale is more difficult to measure, but it can be every bit as important to the organization’s recovery—and considerably more difficult to repair.

Why Do Organizations Wait?

The decision to seek an outside perspective can be difficult.

Ownership and management may believe they are close to resolving the issue. They may want to give a new process or initiative more time. They may be concerned about the cost of outside assistance or believe that bringing in someone from outside suggests that leadership has failed.

It does not.

Leadership is responsible for addressing the organization’s problems, but that does not mean every problem must be solved exclusively with internal resources.

An experienced outside perspective can bring greater objectivity, different analytical capabilities, and experience gained from addressing similar situations elsewhere. It can also challenge assumptions that have become accepted internally and help distinguish the visible symptoms from the conditions actually producing them.

The relevant question is not whether ownership and management have tried hard enough. It is whether their efforts are producing sustained, measurable improvement.

If an important issue has remained unresolved after months of attention—or if repeated corrective actions have produced only temporary results—it may be time for another set of eyes.

But another set of eyes should not be viewed only as a last resort. The earlier the underlying cause is identified, the greater the opportunity to address it before its effects become more significant, widespread, or interconnected.

Performance Improvement or Recovery?

An organization does not need to be in crisis before an outside perspective can be valuable.

A Performance Improvement engagement is intended to address an important financial or operational pain point through a focused, laser-like approach.

The engagement may begin with a specific concern identified by the client, but the first objective is to determine whether that concern is the underlying problem or a symptom of something deeper—and then identify what needs to change to produce sustained improvement.

A Recovery engagement becomes more appropriate when an issue has become sufficiently significant—or its related effects sufficiently widespread and interconnected—that a narrowly focused engagement is unlikely to be adequate.

A turnaround-level engagement does not necessarily mean that every aspect of the organization is in distress. It means that the nature and reach of the problem require a more comprehensive, coordinated approach capable of addressing both the underlying causes and the related financial, operational, and organizational effects.

That approach may also require continued involvement during implementation and early stabilization. Identifying what is wrong is only part of a turnaround. The organization must also be able to implement the necessary changes, determine whether they are working, and make further adjustments when needed.

Do Not Wait to Address the Underlying Cause

The earlier an underlying problem is correctly identified, the greater the opportunity to address it through a focused Performance Improvement engagement.

As its severity, reach, and related effects increase, a more comprehensive Recovery—or turnaround—engagement may become necessary. The engagement will generally take longer, involve more areas, and cost more than it would have if the underlying problem had been addressed sooner.

The best time to seek an outside perspective is before a problem requires a turnaround. But if the issue has already become sufficiently significant, widespread, or interconnected to require one, the time to begin the Recovery process is now. Further delay only gives the underlying problem—and its related effects—more time to become increasingly difficult and costly to correct.

In the most serious situations, the consequences of continued delay can extend beyond higher costs and a more complicated recovery. Significant underlying problems that remain unresolved can eventually threaten the agency’s financial viability. By then, the available options for recovery—or even the ability to preserve sufficient value for an orderly sale—may have narrowed considerably. Some agencies ultimately close, and much or all of the financial investment and personal commitment ownership has made in building the organization can be lost.

My perspective has been shaped by more than 30 years of financial and operational analytical experience in home health and hospice. That includes five years as a Medicare auditor, more than 11 years as a provider-side executive overseeing reimbursement and financial-operational analytical activities for a multistate home health and hospice organization, and nearly 18 years applying that experience as a consultant—including almost 15 years of turnaround engagements.

Having evaluated organizations from the perspectives of an auditor, provider-side executive, and outside advisor allows me to look beyond an isolated financial or operational result and examine how reimbursement, clinical utilization, staffing, productivity, costs, and cash flow interact. That breadth of perspective matters in Performance Improvement and Recovery engagements because the most visible problem is not always the underlying cause—and it rarely exists entirely in isolation.

If an important financial or operational issue is not improving, let’s discuss whether it can still be addressed through focused Performance Improvement—or whether it now requires a more comprehensive Recovery engagement. In either case, the sooner the underlying cause is identified and addressed, the sooner your organization can begin moving toward sustained improvement.