Article Five, September 2018
Governance and Leadership
The Future of In Home Care – Integrated Care beyond 2020
Written by Ilsa Bird – Sector Support Coordinator, Your Side
Providers are being challenged by a market-based and consumer driven sector and must adjust to remain viable. Below two industry experts, Grace Leotta and Susan Leahy, outline practical information to support Boards in creating a strong governance framework, the characteristics of high performing Boards, developing an effective strategic plan and principles of change management.
Creating a strong governance framework
A strong governance framework provides the overarching structure of the organisation. According to Susan Leahy, strong governance “sets the foundations to support an organisation’s policies, it is accountable and efficient, supported by leadership to promote a culture that is client focused, is transparent and open to continuous improvement.” A governance framework provides transparency, accountability, stewardship and sets the direction for organisational objectives. The Australian Institute of Company Directors provides an overview of a governance framework including values, key areas of focus and essential practices (see resources below).
Governance provides clarity of roles and sets in place policies to ensure that the roles as well as the authority and responsibilities attached to that role are documented and understood. According to Grace Leotta, policies, procedures and processes for governing the organisation must align with the organisation’s Constitution, as well as regulation. For example, Board policies and procedures should include a Code of Ethics and Conduct and outline how Conflict of Interest is managed (see resources below for the governance solutions toolkit from Conscious Governance).
Characteristics of high performing Boards
A high performing Board strives for continual improvement in governance and organisational performance. Leahy states that a Board must be strategic, integrous, client and outcomes focused and sustainable. This provides accountability but also supports the executive and management. A Board must have a balance between what it does and how it operates. The role of the Board is to provide leadership; to determine the direction and strategic objectives of the organisation. According to Leahy, the operational role should be left to the executive team so the Board can maintain focus on strategy and be forward looking.
It is easy to say that we don’t definitively know the future of CHSP and HCP and therefore it is difficult to plan beyond the next funding cycle. The Boards role is to look beyond the uncertainty and ensure that the organisation is committed to a clear direction. The Aged Care Roadmap sets the direction for the sector and can be used to inform organisational strategy. For example, if consumer payments were performed via a dashboard with MAC, how would this impact upon your organisational ICT infrastructure, workforce requirements and other systems? Leahy states that it is important for Boards and Management to ‘keep an ear to the ground’ so that providers know what is happening in the sector, with consumers as well as with their competitors. In times of unprecedented change, undertake scenario planning or consider “what if.”This approach assists the Board are able to assess options and make informed decisions against the organisations risk appetite.
Market changes are driving change at Board level, by ensuring Boards have the right mix of skills to meet future challenges. The right balance of skills will add value to an organisation and ensure its future sustainability. According to Leahy, it is essential that organisations determine the required skills, the strengths of the current Board and recruit based on gaps in the skill set. This can be achieved by utilising a tool such as a Board Skills Matrix (See resources below).
Most importantly, Boards need to have a common commitment to improving the quality of life of older Australians. According to Leotta, high performing Boards are connected, relationship focused and inclusive. They reach out to the diverse sections of the community so that the organisation is truly reflective of commitment to the people it is there to serve, Leotta states. This must be balanced with commercial thinking to ensure organisational sustainability.
A critical skill of the Board is to make good decisions that meets the organisations strategic objectives and are in the best interests of stakeholders. Board may delay decisions, waiting for more perfect information or direction from funders. A lack of decision, is a decision in itself. It is good practice for a Board to assess how it makes decisions. This can include;
- The type and presentation of information the board expects from management or independent consultants.
- Process for robust discussion or debate at Board meetings. Does the Chair encourage that all Directors express their views, concerns or allow for questions? Does the Chair set a timeframe for discussion so that Directors are aware that a decision is expected at the end of the discussion, or do Directors commonly defer?
- The way Directors vote. Does the Board have a consistent approach to voting, with a draft resolution provided with a briefing paper? Do your directors vote via a show of hands or via ballot?
- Recording of Board resolutions. Is there a centralised record of resolutions that is accessible so that Directors are clear on what they voted for/against? Are minutes recorded of the discussion and provided at the following meeting for acceptance?
High performing Boards evaluate meetings and their own performance, either at the end of the meeting or on a quarterly or annual basis. Australian Strategic Services provide a tool that can be used to evaluate Board meetings (see resources below).
Effective strategic planning
When quality governance and a high performing Board are coupled with effective strategic planning, it produces clear direction for how the organisation will achieve its purpose.
The strategic planning process should begin with a strategic audit in order to understand the changing nature of the sector and the implications of change on the organisation (see figure 1). A strategic audit should investigate the external and internal environment, identify strengths, weaknesses, opportunities and threats as well as outline issues that need to be addressed to ensure organisational success. A strategic planning work plan or timeline will assist with the development and planning process.
(Figure. 1 Strategic audit process)
The strategic planning process must take into account all factors that will impact upon the strategic direction of an organisation. Below are the key stages of the strategic planning process as outlined by Conscious Governance:
- Establish and maintain disciplined strategic foresight by implementing scenario planning (see figure 2). If CHSP and HCP are integrated, what are the options that exist for you as a provider and what actions do you need to take right now? E.g. a CHSP provider may consider moving into package provision which may require merging or partnering with another provider.
(Figure 2. Scenario Planning)
2. Select an appropriate planning team based on a mix of skills and knowledge and not necessarily based on position
3. Filter major activities to ensure they are linked with the vision (see Table 1)
4. Assess strengths, weaknesses, opportunities and risks (SWOR analysis)
5. Set strategies and check them against the SWOR.
6. Develop and action plan for each strategy that is delegated to a particular person, has a specific timeframe for completion and includes measures of success.
7. Collate the information to formulate the strategic plan (see Table 2 below)
(Table 2. Structure of a strategic plan)
Principles of change management
Strong governance is key to successful change management as organisational change must be supported at all levels e.g. by leadership, management and front-line workers. Leotta describes that Boards and leaders influence the organisational culture – they set the tone. Systems, policies and processes by themselves do not guarantee a well-functioning organisation instead, a positive organisational culture brings out the best in people by setting expectations for positive practice. Creating this kind of culture requires frequent and clear communication as people need to know what will change, how they will benefit from change, the reasons behind change as well as the direction and final destination. According to Leahy, everyone is responsible for change management however roles must be defined and understood.
Change management requires significant investment in people, infrastructure and systems. Leotta describes that staff must be supported in implementing the change by linking the change to their interests and motivations, taking a capacity building approach – building skills, knowledge, networks, supporting change allies and champions, and addressing the potential losses created by the change. This is important to sustain change and ensure that change is embedded in everyday routines and practices, Leotta states.
Within the process of change management, conflict is likely to arise. Leahy states that Boards and leaders must be willing to face difficult conversations armed with knowledge and information that supports their particular view. At the end of the day, decisions should be based on what is best for the organisation and its consumers Leahy says.
What do providers need to do right now?
- Learn from other de-regulated industries (e.g. Disability and the NDIS)
- Research and understand your competition, consumers and the sector.
- Be willing to take risks and innovate. We cannot stop change; instead it should inform our planning and practices.
- Embrace external challenges, and industry / regulatory changes as opportunities for organisational impact and to support planning and decision making. Leahy urges providers to take action now; don’t wait until 2020.
- Ensure that Board members, management and executive are involved in regular professional development to stay up to date with regulatory changes and extend their expertise.
- Take advantage of key metrics within the sector to evaluate organisational performance against the industry standard and use this data to inform future planning. For example AIHW GEN Aged Care Data and the Deloitte Access Economics Report on the Aged Care Sector.
- Take a closer look at your Board skills and match these to your strategic objectives. Ensure that your Executive teams’ skills also match the strategic plan. Invest in and prepare your workforce. Leahy suggests that staff should be up-skilled and trained now to adapt to the changing sector. Your Side provides a number of opportunities for up skiling including training and workshops. During November, Your Side will be hosting the Northern Sydney Regional Forum. Industry experts will be discussing principles such as customer experience, governance and change management to improve the knowledge, skills and expertise of our aged care workforce.
- Know your services and how much they cost to ensure financial viability. Develop an understanding of pricing and pricing strategy. Leahy states that technology should be embraced as one example to improve organisational efficiency.
- Consider the options for the future and what your role will be. Make assumptions about the future to capture a range of possibilities and outline scenarios of possible situations or events. Leotta suggests that scenario planning can inform immediate planning in order to be prepared for the future.
- Start NOW! Each day delayed is a day lost.
The October article will expand further on planning beyond 2020 by looking at business development. Sector experts will discuss the principles of customer centricity as the driving factor for strategic direction. To receive a copy of this article, sign up to our e-bulletin here, or you can view past articles in the series here.
Tags: article 5, future of in home care, governance and leadership, September article