The Role of the Company and the Brand

10 Mar The Role of the Company and the Brand

Brand (ˈbrand) n.

  1. Type of product manufactured by a particular company under a particular name.
  2. An identifying mark burned onto an animal or object to imply ownership.

One of the most important economists in history died as recently as 2013, at the remarkable age of 102. Ronald Coase, who won the Nobel Prize for Economics in 1991, taught and contributed to modern economics theory right up to that year. That we could all leave such long and productive lives!

He made his name in a short essay published in 1937 (if you can imagine) called “The Nature of the Firm.” In it, he proposed the theory of “transaction costs” as the reason why we have companies, rather than just networks of individuals providing specific services. The transaction costs of a network of individuals – setting up multitudes of contracts, managing individual vs collective accountabilities, handling workflows and handoffs, marketing and sales etc – exceed the costs and capability of making the final product or delivering a service, so organizations – or businesses – are created to internalize these processes and reduce the costs.

Coase never really addressed what happens when the transaction costs are reduced, most dramatically today by collaborative information management and communication technologies. Will companies disappear or turn into mere aggregators of individual experts? A lot of people think this is the future of the organization, and of the healthcare organization in particular. While current evolution supports this I’m not so sure.

Healthcare is, in some ways, the world’s largest cottage industry. In spite of some very large provider companies, healthcare continues to be mostly delivered by individuals and small organizations, each with a unique perspective on the right behavior, patient relationships, protocols and so on. It could be argued that because of this, healthcare is largely the future networked organization already, with the arrival of new collaborative technologies further enabling health providers to group together to form ever larger “virtual healthcare companies” (and we’ve been seeing that with ACOs).

I think, though, that there’s one other organizing element of the more traditional organization that economists like Coase miss when they’re talking about transaction costs and the need for the company – the brand. We believe that beyond reducting transaction costs, one of the most profound roles and dare we say responsibilities of a company, is to have a strong brand that communicates the essence of the promise of that company. We believe that the brand is the strongest gravitational force holding a company together. It’s one thing that remains in this decentralizing world.

Our integrative, team-based approach to care, engaging patients and providing remarkable experiences requires a solid supporting framework to function well and consistently. But the real role of our company structure is to align everyone on our team around a consistent, remarkable and inspiring brand vision of what healthcare can be. We want people on our team to be initiators, collaborators, great communicators, but we also want everyone to understand and embrace shared values and a sense of responsibility to our vision and our promise that seems to be best communicated through the “traditional” concept of a company.

For us, the cost of sustaining the Crossover brand experience is just something that we are going to have to be wiling to bear. It will be a cost we are unwilling to compromise because we believe it is the best organizational model to impute the full meaning of mission to our employees. The irony is not lost on us that while we are pushing for the most cutting edge care transformation, we are still organizing ourselves around a concept from the last century – the tightly integrated, purposeful, and well branded company.

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