Cultivate your core competencies. (Careers).

I OFTEN WONDERED why some physicians fail as executives and others thrive.

The simplest explanation is that both personal and organizational factors undermine the success of physicians in management. (1)

Another possibility is a mismatch between a physician's core competencies and those required for the job. Cultivating your core competencies may decrease the likelihood of failure, assuming that those competencies are valued by your organization.

What are core competencies?

To paraphrase Harvard business expert Gary Hamel, experience is valuable only to the extent that the future is like the past.

Hamel believes top executives will be judged primarily on their ability to exploit their core competencies and those of their organizations rather than on past performance. He defines core competency as "the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technology." (2)

Michael Stahl and Peter Dean, in their book The Physician's Essential MBA, propose a similar definition: "An integrated bundle of skills and technologies that contribute to an organization's competitive success." (3)

Most companies build world leadership with only a few fundamental competencies.

Examples include Honda, Canon, Sony and 3M. Despite competing in vastly different markets, these companies have common, unique competencies they leveraged to achieve global competitive advantage.

In contrast to corporate core competencies, personal core competencies are things you do for the company that dearly set you apart from others--skills that make you special and valuable.

And because your competencies are going to be the focus of your career, they have to involve doing something you enjoy. There are several defining characteristics of core competencies:

* Core competencies provide potential access to a wide variety of markers. Physician executives should be capable of working in different types of organizations- integrated health systems, managed care organizations or pharmaceutical companies, for example.

* Core competencies make a significant contribution to the perceived customer benefits of the end product, but they are not products. Core competencies are skill sets possessed by physician executives. The skills may be learned or innate. The customers who benefit from physicians competencies are primarily patients, payers and employers.

* Core competencies are not values, goals, or objectives. It's essential to outline goals and objectives in your operating plan, but don't confuse them with core competencies.

* Core competencies are difficult for competitors to imitate. Many physicians consider themselves "executives," but relatively few possess the complex set of skills to function at top levels of management.

* Core competencies embody the essence of communication, involvement and a deep commitment to working across organizational boundaries.

* Finally, core competencies do not diminish with use. They are quite different from physical assets that depreciate over time. Core competencies are enhanced as they are applied and shared. However, if they are not nurtured and protected, competencies fade much like knowledge fades when it is not used. That's why competency building is so important for physician executives.

Building core competencies

The physician executive's position may be viewed as the hub around which the many spokes of the health system wheel turn.

The physician executive is responsible for integrating all components of medical care into the vision, mission and goals of the health system. The role of the physician executive continues to expand as health systems consolidate operations and the complexity of care delivery increases.

As a result, core competencies must be built through a process o continuous improvement and enhancement to reflect the shifting nature of the physician executive role.

Here's a look at the core competencies of a successful physician executive. The most important competencies include:

* Strong leadership

* Technical expertise

* Management know-how

Leadership skills are the key factors in determining the success or failure of an organization. Technical skills focus on knowledge, information systems and conflict resolution or mediation.

Managing change has become one of the most critical competencies of a physician executive. Change will be resisted unless physician executives achieve buy-in of senior management and other physicians.

Each area of competency--leadership, technical and management-- has its own set of skills and associated tasks that may vary from one industry to another.

For example, in managed care, skills rated as highly important include case management, cost-effective clinical decision-making and ethics. (4) In turn, these require an understanding of teamwork, patient care and organizational issues.

The pharmaceutical industry requires physician executives who can think strategically, communicate well and influence opinion leaders. Those skills correspond to problem solving, business knowledge, and interactive capability.

I am often asked whether physician executive positions (medical director, vice president of medical affairs, chief medical officer, etc.) require different core competencies.

They are basically the same. Each core competency, however, has a capability continuum in which capabilities of increasing complexity are associated with more advanced positions.

For example, the type of analytical thinking expected of an associate HMO medical director would be to analyze medical information and determine the most important issues and findings for customers and senior management.

The chief medical officer, on the other hand, should be able to demonstrate capabilities further along the continuum--for example, by creating meaningful analyses of medical data that drive new direction to market and business activities.

Communication is an important core competency for physicians working in the pharmaceutical industry.

Entry-level physicians are expected to make effective presentations of prepared data to practicing physicians. Senior physician executives, however, are expected to make cutting-edge presentations to top management and influential national opinion leaders, effectively delivering important or sensitive messages in a politically astute manner.

As can be seen in these examples, core competencies do not differ between positions or across industries; rather, the capabilities vary according to organization type and hierarchy.

Knowing your areas of competence and weakness is important for several reasons.

It helps determine whether a particular position may be a good fit for you.

The more you invest in competency building, the greater the likelihood you can advance your career and even transcend industries.

Third, pooling competencies creates new identities for physicians and companies alike.

Mercedes-Benz based on their core competence in engines then realized they were not simply an automobile maker but rather a transportation provider (boats, trucks and airplanes).

Canon was able to reinvent itself because its core competencies in optics, imaging and microprocessor controls enabled it to produce products other than cameras--copiers, laser printers and image scanners.

A company that fails to invest in core competence building will find it difficult to enter, much less dominate emerging markets.

By analogy, the failure of physician executives to develop and cultivate core competencies may be the single most overlooked factor limiting their career potential. Physician executives, like great hockey players, must think ahead and anticipate where the puck will be.

Attention to competence building characterizes the successful physician executive of tomorrow.

Some companies hired physician executives in unique roles or redefined traditional ones. Typical physician executive positions such as medical director, chief medical officer and vice president of medical affairs have been transformed into positions that bear exotic titles like chief knowledge officer, chief learning officer and chief clinical strategy and innovation officer.

It's fair to say that senior management at those companies spend a significant amount of time developing a corporate-wide strategic architecture that establishes objectives for competence building and allocates the resources necessary for appropriate training of physician executives.

Cultivating core competencies

Aristotle said that education is the best provision for old age.

To be sure, a number of physician executives have treated their mid-life crises with heavy doses of adult education. But it was Mark Twain who said that he never let school interfere with his education.

Here's the point: core competencies are developed through channels other than education--mentoring and coaching, for example and they are cultivated in the sense that you must identify your competencies and grow them, or acquire competencies in areas where you are deficient.

There is no "one size fits all" program or ideal way to perfect your core competencies. Key areas identified for additional learning include:

* Marketing

* Finance

* Accounting

* Economics

* Strategic planning

* Operations management

* The decision sciences, including statistics (5)

The choices are generally between internally developed programs, usually in hospitals and health system, (6) and external programs that may confer a degree or certificate and even offer continuing medical education credits.

The advantage of internal programs is that they can be customized and may be less costly and easier to attend from a logistical standpoint. Also, in-house programs may be better at building relationships among participants and opening communication channels.

External programs, on the other hand, may offer distance learning as an option and generally have more experienced teachers. The topics covered in in-house and external programs are similar with the obvious exception of graduate programs in business administration and public health, which are more comprehensive and rigorous.

There are many barriers to cultivating core competencies, both personal and organizational.

Some physician executives do not have the time or discipline to apply themselves to another course of study after medical school and residency.

Cost may be a significant factor, not only the actual cost of the program, but also the cost of foregoing another income-producing activity while in the program.

In some organizations, developing core competencies is not part of the culture or simply not a priority. Ask yourself why you would want to work for an organization like that in the first pace.

Finally, as physician executives, we often work in isolation. The absence of working interactions with other physicians may be a real detriment to cultivating competencies.

It's true that there's strength in numbers. So if you're working alone, you need to approach top management and enlist them in the competence acquisition process. After all, influencing key people is a core competency you want to possess.

Important Areas of Competence for Physician Excutives

Leadership        Technical        Management

Inspiration       Knowledge          Change
   Vision    Information Systems   Uncertainty
Motivation   Conflict Resolution  Expectations
Examples of Core Compentencies

Company  Core Competency

Honda    Engines and power trains
Canon    Precision mechanics, fine
         optics and microelectronics
Sony     Miniaturization and video
         technology
3M       Substrates, coatings and
         adhesives
Competencies of Successful Physician Executives

Competency       Capability

Strategic        Understands and considers the
                 organization's competitive
                 positioning when solving
                 problems and making decisions

Analytical       Gathers and evaluates
Thinking         information as a framework for
                 examining an issue

Planning         Understands what is needed to
and Organizing   accomplish project objectives
                 and establishes appropriate
                 goals and priorities

Decision         Selects effective approaches
Making/Judgment  to solving issues based on
                 available information and
                 business objectives

Creativity       Develops and champions new
and Innovation   ideas

Professional     Possesses necessary technical
Expertise        knowledge and applies it to
                 identifying issues and
                 resolving problems

Communication    Speaks, writes and listens
                 effectively

Relationship     Builds and maintains
Management       relationships with key
                 stakeholders

Teamwork         Works toward common goals
                 by supporting, encouraging
                 and sharing information
                 with colleagues

Influence        Positively affects the
                 decisions of opinion
                 leaders using facts, logic
                 and credible personal
                 presence

Leadership       Has a vision of success and
                 inspires others to embrace
                 that vision and develop a
                 plan to get there

References

(1.) Cummings, K. "Why Some Managers Fail." The Physician Executive. 1988, 14(4):6-8.

(2.) Prahalad, CK, Hamel, G. "The core competence of the Organization." Harvard Business Review. 1990 68(3):79-91.

(3.) Stahl, MJ, Dean, PJ. The Physician's Essential MBA. Gaithersburg, Md., Aspen, 1999.

(4.) Yedidia, MJ, Gillespie, CC, Moore, GT. "Specific clinical competencies for Managing care." JAMA. 2000, 284:1093-1098.

(5.) Hillman, AL, Nash, DB, Kissick, WL, Martin, SP. "Managing the Medical-Industrial complex." N Engl J Med. 1986, 315:511-513.

(6.) Scott, HM, Tangalos, EG, Blomberg, RA, Bender, CE. "Survey of Physician Leadership and Management Education." Mayo Clin Proc. 1997, 72:659-662.

Arthur Lazarus, MD, MBA, CPE, FACPE, has worked in academic medical centers, managed care organizations, and the pharmaceutical industry. He is currently director and regional medical research specialist with Pfizer, Inc. He is editor of MD/MBA: Physicians on the New Frontier of Medical Management (American College of Physician Executives, 1998). He can be reached by phone at 502/228-2480 or by e-mail at [e-mail]. His opinions are not necessarily those of Pfizer, its management or employees.