The United States stands at a crossroads in how to pay for health care. Fee for service, the dominant payment model in the U.S. and many other countries, is now widely recognized as perhaps the single biggest obstacle to improving health care delivery. A battle is currently raging, outside of the public eye, between the advocates of two radically different payment approaches: capitation and bundled payments. The stakes are high, and the outcome will define the shape of the health care system for many years to come, for better or for worse. In this article, the authors argue that although capitation may deliver modest savings in the short run, it brings significant risks and will fail to fundamentally change the trajectory of a broken system. The bundled payment model, in contrast, triggers competition between providers to create value where it matters--at the individual patient level--and puts health care on the right path. The authors provide robust proof-of-concept examples of bundled payment initiatives in the U.S. and abroad, address the challenges of transitioning to bundled payments, and respond to critics' concerns about obstacles to implementation.

Faced with the need for a massive change, most managers respond predictably. They revamp the organization's strategy, shift around staff, and root out inefficiencies. They then wait patiently for performance to improve--only to be bitterly disappointed because they've failed to adequately prepare employees for the change. In this article, the authors contend that to make change stick, leaders must conduct an effective persuasion campaign-one that begins weeks or months before the turn-around plan is set in concrete. Like a political campaign, a persuasion campaign is largely one of differentiation from the past. Turnaround leaders must convince people that the organization is truly on its deathbed-or, at the very least, that radical changes are required if the organization is to survive and thrive. (This is a particularly difficult challenge when years of persistent problems have been accompanied by few changes in the status quo.) And they must demonstrate through word and deed that they are the right leaders with the right plan. Accomplishing all this calls for a four-part communications strategy. Prior to announcing a turnaround plan, leaders need to set the stage for employees' acceptance of it. At the time of delivery, they must present a framework through which employees can interpret information and messages about the plan. As time passes, they must manage the mood so that employees' emotional states support implementation and follow-through. And at critical intervals, they must provide reinforcement to ensure that the desired changes take hold and that there's no backsliding. Using the example of the dramatic turn-around at Boston's Beth Israel Deaconess Medical Center, the authors elucidate the inner workings of a successful change effort.

Health care providers in much of the world are trying to respond to the tremendous pressure to reduce costs--but evidence suggests that many of their attempts are counterproductive, raising costs and sometimes decreasing the quality of care. Kaplan and Haas reached this conclusion after conducting field research with more than 50 health care provider organizations. Administrators looking for cuts typically work from the line-item expense categories on their P&Ls, they found. This may appear to generate immediate results, but it usually does not reflect the optimal mix of resources needed to efficiently deliver excellent care. The authors describe five common mistakes: (1) Reducing support staff. This often lowers the productivity of clinicians, whose time is far more expensive. (2) Underinvesting in space and equipment. The costs of these are consistently an order of magnitude smaller than personnel costs, so cuts here are short-sighted if they lower people's productivity. (3) Focusing narrowly on procurement prices and neglecting to examine how individual clinicians actually consume supplies. (4) Maximizing patient throughput. Physicians achieve greater overall productivity by spending more time with fewer patients. (5) Failing to benchmark and standardize. Administrators, in collaboration with clinicians, should examine all the costs of treating patients' conditions. This will uncover multiple opportunities to improve processes in ways that lower total costs and deliver better care.

The open office is the dominant form of workspace design for good reason: It fosters collaboration, promotes learning, and nurtures strong culture. But what most companies fail to realize is that collaboration has a natural rhythm that requires both interaction and private contemplation. Companies have been trying for decades to find the balance between public and private workspace that best supports collaboration. In 1980 52% of U.S. employees lacked workspaces where they could concentrate without distraction. In response, high-walled cubicles took over the corporate landscape. By the late 1990s, the tide had turned, and only 23% of employees wanted more privacy, and 50% wanted more access to other people. Ever since, firms have been beefing up spaces that support collaboration and shrinking areas for individual work. But the pendulum seems to have swung too far: Once again, people feel a pressing need for privacy, not only to do heads-down work but to cope with the intensity of work today. To address these needs, according to the authors, we have to rethink our assumptions about privacy. Traditionally defined in physical terms, privacy is now about the individual's ability to control information and stimulation. In this article, the authors examine workspace design through the new lens of privacy and offer insights on how to foster teamwork and solitude.

Over the past five years, there's been an explosion of interest in purpose-driven leadership. Academics, business experts, and even doctors make the case that purpose is a key to exceptional leadership and the pathway to greater well-being. Despite this growing understanding, however, a big challenge remains. Few leaders have a strong sense of their own individual purpose, the authors' research and experience show, and even fewer can distill their purpose into a concrete statement or have a clear plan for translating purpose into action. As a result, they limit their aspirations and often fail to achieve their most ambitious professional and personal goals. In this article, the authors present a step-by-step framework that leaders can use to identify their purpose and develop an impact plan to achieve concrete results. Effective purpose-to-impact plans use language that is uniquely meaningful to the individual, rather than business jargon. They focus on future, big-picture aspirations and work backward with increasing specificity. And they emphasize the individual's strengths and encourage a holistic view on work and family.

As the planet warms, storms and floods are becoming wilder--killing thousands, disrupting supply chains and power grids, and causing billions of dollars in damage. Meanwhile, supplies of all kinds of resources are dwindling, and demand is rising. These two megachallenges--extreme weather and resource scarcity--could have an unprecedented impact on corporate profits and global prosperity, warns Winston. To manage these threats, companies must do what he calls "the big pivot". The big pivot represents a radical change in strategy, operations, and mind-set. Instead of focusing first on short-term earnings and treating environmental challenges as niche issues, firms must prioritize tackling the world's big problems and use the tools of capitalism to do so profitably. That means taking new approaches to vision, valuation, and collaboration: Companies must set long-term goals based on science and pursue innovations that seem heretical (dyes that don't need water, say, or services that replace products). They'll need new ROI tools that factor in unpriced costs and benefits. And they'll have to work with other organizations, including competitors, to reduce resource dependency (for instance, sharing methods for reducing energy use). By making these moves, firms will increase their resilience to volatile resource prices, electrical outages, and shifts in customer needs. They will improve business performance while advancing the common good.

Climate change presents clear and pressing threats to business--materials and product shortages, price volatility, legal bans or consumer backlash, and damaged transportation infrastructure, to name just a few. But there are opportunities as well. Lowitt, a consultant in the sustainability field, has developed a series of detailed checklists that will help smart managers reduce operational, regulatory, and reputational risk while finding new ways to cut costs, improve performance, enhance customer relationships, and otherwise increase competitiveness. The checklist recommendations, tested and refined through Lowitt's research into and work with firms including Coca-Cola, GE, and Owens Corning, cover four broad areas in the product life cycle: sourcing, manufacturing, distribution, and consumption. Actions range from educating and incentivizing employees to use climate change-conscious behavior to measuring and reporting key metrics to determining when alternative materials, methods, sites, or contract partners may be called for. Like any such tool, the checklists don't provide a one-size-fits-all plan. Rather, they equip executives to customize their strategies according to factors such as their goods and services, risk tolerance, customer needs, and reliance on third parties throughout the value chain.

The value of many products and services rises or falls with the number of customers using them; the fewer fax machines in use, the less important it is to have one. These network effects influence consumer decisions and affect companies' ability to compete. Strategists have developed some well-known rules for navigating business environments with network effects. "Move first" is one, and "get big fast" is another. In a study of dozens of companies, however, the authors found that quite often the conventional wisdom was dead wrong. And when the rules failed, the reason was always the same: Companies trip up when they try to attract large volumes of customers without understanding (1) the strength of mutual attraction among various customer groups and (2) the extent of asymmetric attraction among them. Looking at examples such as TripAdvisor, Wikipedia, and the New York Times, the authors offer strategies for competing in markets with network effects. New entrants should focus on customer groups that they are uniquely positioned to serve or appeal to the most attractive customers in a market. Incumbents pursuing growth strategies in adjacent markets or new geographies should consider how similar the needs of new customers are to those of existing customers. Offering complements also allows incumbents to reach additional customer groups.

The Cleveland Clinic has long had a reputation for medical excellence. But in 2009 the CEO acknowledged that patients did not think much of their experience there and decided to act. Since then the Clinic has leaped to the top tier of patient-satisfaction surveys, and it now draws hospital executives from around the world who want to study its practices. The Clinic's journey also holds Lessons for organizations outside health care that must suddenly compete by creating a superior customer experience. The authors, one of whom was critical to steering the hospital's transformation, detail the processes that allowed the Clinic to excel at patient satisfaction without jeopardizing its traditional strengths. Hospital leaders: Publicized the problem internally. Seeing the hospital's dismal service scores shocked employees into recognizing that serious flaws existed. Worked to understand patients' needs. Management commissioned studies to get at the root causes of dissatisfaction. Made everyone a caregiver. An enterprisewide program trained everyone, from physicians to janitors, to put the patient first. Increased employee engagement. The Clinic instituted a "caregiver celebration" program and redoubled other motivational efforts. Established new processes. For example, any patient, for any reason, can now make a same-day appointment with a single call. Set patients' expectations. Printed and online materials educate patients about their stays--before they're admitted. Operating a truly patient-centered organization, the authors conclude, isn't a program; it's a way of life.

The article presents the author's views regarding organizational psychology, corporate culture, and the importance of expressing gratitude to employees and superiors. Topics include employee awards to recognize their accomplishments; advice on thanking people in public; and the role of gratitude in job satisfaction, personnel management, and organizational life.