A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Decades ago computer manufactures, such as IBM and DEC, created closed systems that wouldn’t/couldn’t talk to each other.

Apple chose to keep a closed system for years.

While closed systems seemed to enhance profitability, in the long-run the strategy failed to protect the companies from competition.

What closed systems did do was cost customers millions when, for business reasons, they had to be made to communicate.

Closed systems are back again only this time forcing compatibility is costing billions.

And it is you and I who will end up footing the cost.

Why?

Because this time the incompatibility is in the proprietary electronic medical records (EMR) systems that are mandated under the Affordable Care Act and, far more importantly, are an imperative for the health of the entire population.

The money in play is substantial; privately held Epic is one of the largest suppliers and its founder, Judith R. Faulkner, is supposed to be worth around $2.3 billion.

When you’re making that kind of money who worries about lives ruined or lost because of EMR incompatibility?

While the companies building incompatible systems are doing just fine, those who have to buy the systems aren’t—although size does make a difference.

The University of California Davis Health System has 22 specialists installing the technology so that doctors can share patient data between its Epic system and other internal systems, like the hemodynamic monitors in its critical care unit, or with some non-Epic systems outside the hospital. “We’re a huge organization, so we can absorb those costs,” said Michael Minear, the chief information officer at the U.C. Davis Health System. “Small clinics and physician offices are going to have a harder time.” (…) “The systems can’t communicate, and that becomes my problem because I cannot send what is required and I’m going to have a 1 percent penalty from Medicare,” Dr. Raghuvir B. Gelot said. “They’re asking me to do something I can’t control.”

What about regulators?

Regulators responded that interoperability was a “top priority” and that they recently set out a 10-year vision and agenda to achieve it, in an emailed statement from the Office of the National Coordinator for Health Information Technology. The office’s spokesman added that achieving interoperability “requires stakeholders to come together and agree on policy-related issues like who can access information and for what purpose.”

So much for regulators.

Perhaps Congress… No; that’s a really stupid thought.

I guess the only sure things in all this is that the entrepreneurs who created the incompatible systems will increase their net worth, US medical costs will continue to skyrocket and you and I will pay the bills.

Image credit: HikingArtist

Welcome to Unreasonable at Sea, a four-month-voyage that aimed to combine the shipboard campus of Semester at Sea with the entrepreneurial zeal of globalized markets and the do-gooder communal spirit of a hackathon. (Read the article here)

The event, while interesting, isn’t what caught my eye; what did hit me was this remark from an attendee.

Wade Colburn, a college junior from California majoring in biomedical engineering, wasn’t one of them, but he joined this Semester at Sea program mainly because of Unreasonable. “You can do something that’s for, like, the better of the world and still make a profit,” he said. “That was a huge shift in my thinking.”

How sad is that?

Think about it; roughly 20 years old with a medically oriented major and a mindset that was completely focused on profit.

It makes you wonder how he was raised and what values he brings to the table.

One can only hope that the “huge shift in thinking” is permanent and that he shares it with his friends.

What’s your thinking?

Does it also need to shift?

Flickr image credit: Ian Aberle

Recently Fast Company told the story of why the acquisition of Ben & Jerry’s worked for the giant Dutch conglomerate Unilever.

The reason boiled down to two words: Yves Couette—the man Unilever put in as CEO—and how he maintained the culture and customer focus even as he streamlined and moved the company in new directions.

Several years ago I wrote about being ‘cultureblind’ and used Home Depot and its new CEO Bob Nardelli as a prime example of what happens when the new boss trashes the culture and more or less abandons customer service.

Last week a new article focused on how Home Depot turned itself around by harking back to its pre-Nardelli culture of customer service.

Compare the difference between Couette and Nardelli and you will have a perfect template of what to do and what not to do as a new boss no matter what level you are on.

So the next time you take over a new group, whether as CEO or a newly minted team leader, remember this useful mantra along the lines of ‘you are what you eat’: ‘culture drives profit’.

Flickr image credit: Bruce Fingerhood

A note from a reader posed this question.

Although I find the articles you link to interesting and probably would never see them if you didn’t I do not understand why you don’t link to more bloggers and other online stuff instead of the NY Times, Fortune, Wired, Inc, etc.

He obviously does read me, since that’s a very accurate list of media to which I frequently link, so it’s a fair question.

I partly answered it in an old post referring to what I term the games required by social media, but there are much larger reasons—facts, depth and veracity.

Let me give you an example.

On August 6^th the NYT published an article about HCA, a giant for profit hospital chain taken private by a group of private equity firms and since gone public again. HCA was involved in a Medicare fraud case and paid $1.7 billion in fines and repayments; now it’s back on the hot seat for performing unnecessary cardiac procedures to drive up profits.
(The bold is mine.)

Details about the procedures and the company’s knowledge of them are contained in thousands of pages of confidential memos, e-mail correspondence among executives, transcripts from hearings and reports from outside consultants examined by The Times, as well as interviews with doctors and others. A review of those communications reveals that rather than asking whether patients had been harmed or whether regulators needed to be contacted, hospital officials asked for information on how the physicians’ activities affected the hospitals’ bottom line.

A week later The Times followed up with another article showing how HCA has become a role model for hospital profitability; not better care, but more money.

I’m sure the blogging and commentary world that follows Medicare and healthcare in general has been weighing in, but what they don’t do is the research.

They don’t have the time, money, skill, patience and probably not the desire to wade through the paperwork.

So-called old media also seems to set the ethical bar higher and with greater consequences to those who choose to lie and cheat.

Finally, bloggers and commentators read these investigative stories and offer their opinions and spin on them just as I do.

Many of these have good value, it’s just that I would rather discuss and opine on the original than comment on the commentary.

Flickr image credit: IvanWalsh.com

I think Harvard’s Jim Heskett poses some of the most thought provoking questions in his “What Do You Think” forum of anyone on the web and his readers generate some of the best commentary.

In the current forum he asks, Is Profit as a “Direct Goal” Overrated?

In his experience, the most profitable companies are run by people who don’t focus on profit.

Almost to a person, they treat profit as a by-product of other things to which they devote most of their attention, things such as a focused strategy that delivers results to carefully-selected customers while pursuing policies and practices that leverage results over costs, hiring people with the right attitude (one that fits with the organization’s culture), and proper training and organization (often in teams).

Heskett cites Obliquity, a new book by British economist John Kay, who argues that business problems cannot be solved by drawing a straight line between cause and long-term effect because they are so complex, a manager’s information so incomplete, the competitive environment so complicated, analytic techniques so inadequate, and the number of things over which a manager has control so limited, that it is impossible to make the connection with any assurance.

Tony Hsieh is adamant about not focusing on profit, but that didn’t stop him from building a billion dollar company.

Take a few minutes and read both Heskett’s thoughts and his readers’ commentary. (The forum is open for comments until July 28.)

Not surprisingly, many of them disagreed and felt that profit is the right focus.

I think that it may have been true in the 20^th Century, but it certainly isn’t in the 21^st.

What do you think?

Flickr image credit: http://www.flickr.com/photos/hikingartist/3000884022/

Today is for all of you top dogs (TD) who tweet, all of you who think twitter should be called fritter and those who wonder when (or whether) Twitter is going to make money.

Let’s start with TDs who tweet or if you’re into politics check out this directory of Congressional tweeters.

For those who don’t see the point, read what Diane Hessan, CEO of Communispace has to say about how her own conversion to Twitter.

Finally, in spite of all the passionate people sending out millions of tweets, where’s the money? An interesting discussion from the faculty at Wharton focuses on the possibilities of a profitable Twitter; but one reader’s comment says a lot about people’s attitude, “SNS are all about sharing, creating, connecting and learning in a digital environment – it’s not about making cash.”

A common attitude, but one that begs the question, if it’s not about the cash why should anyone invest? Companies such as Twitter and Facebook don’t start and scale for nothing and users certainly are unlikely to step up to pay.

Your comments—priceless

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Image credit: nono farahshila on flickr

Although he may not realize it, web developer Tim Knight speaks for the vast majority of the global workforce in a post entitled Stop Leading Your Team to The Destination, Give Them The Map.

He eloquently explains why leaders who proclaim their visions and then hoard the details have far less chance of success as opposed to those that are introduced, explained, clarified and then embedded in the corporate culture.

Today’s workforce is damn smart and leadagers forget that at their own peril.

One caveat. “Profit” isn’t a valid vision, especially when building it into a culture creates an overarching need to achieve it that transcends sensible, moral, ethical and even legal bounds as so recently happened.

Your comments—priceless

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Image credit: flickr