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At a health care system suffering from financial losses and cultural dysfunctions, executives gave themselves a thorough checkup and long-term prescription.
The U.S. health care industry faces an unprecedented loss of leaders. During the next five years, 40 percent to 50 percent of its current leaders will retire, while less than 25 percent of U.S. health care organizations have succession plans in place, according to Marie Sinioris, president of the National Center for Healthcare Leadership (NCHL), a Chicago-based best-practice consortium.
She names six challenges in overcoming the leadership loss. The first is improving the cost and quality of patient care. The other five areas for improvement sit squarely in the realm of human resources: succession planning and recruitment, mentoring activities, mid- and advanced-career education offerings, practitioner and academic collaboration, and diversity. The center, with industry support and members, offers a leadership development plan for health institutions based on clearly identified competencies. These traits reflect characteristics that would serve leaders of any industry well. Here, one passionate advocate describes his experience implementing parts of the NCHL model along with other training.
Talent, development, culture, performance management, succession planning, retention, recognition, engagement, accountability—all are important words for health care leaders.
We have a responsibility to lead the way in delivering safe, cost-effective and quality-driven health care for our patients. The key: continuous focus on developing leaders.
The Henry Ford Health System (HFHS) is committed to doing just that. Our comprehensive, integrated health system in Southeastern Michigan has annual gross revenue of $4 billion and approximately 22,000 workers.
The leadership journey began in 2001 when our senior management team realized a need to create and sustain a positive and engaged culture to achieve the performance required to survive in a competitive market. After leading HFHS through intense training and development, I am convinced that it is all about having the right culture.
Facing significant financial losses in 2001, HFHS began the customary process of downsizing and restructuring. Our revenue had gone from a 3 percent operating margin to a 2 percent operating loss in three years. What differentiated HFHS from many organizations facing such severe economic challenges was the decision to focus on culture. Clearly, the most difficult challenge was committing resources to development at this time of financial stress.
When No One Watches
Cultures -- as defined by quality management expert Joseph Juran -- are social forces that align to support the people and performance needs of organizations. My own definition: Culture is what happens in an organization when no one watches.
When a cultural survey of HFHS employees was conducted in 2001, the results were telling. The perception was that as an organization we practiced “siloed” thinking, internal competition, and a “victim mentality” that perpetuated blame and a lack of accountability. We—senior managers—needed to hold a mirror up to ourselves as leaders to help find our way, and we did. Members of the HFHS leadership team recognized that if we were going to lead the organization and thrive, we needed to lead differently. Development began with cultural competence. Our journey was formally named “Renewal” as a commitment to the values and behaviors to transform our organization into a culture of continuous learning and high performance.
Renewal started at a three-day off-site retreat for senior leaders in 2001. What emerged were a mission, vision and values for the organization as well as a commitment to leadership based on principles of accountability and a focus on patients. With assistance from the Senn-Delaney Leadership Consulting Group LLC of Long Beach, Calif., the retreat focused on principles and behaviors to effect and sustain positive change. These principles include communication, accountability, assuming innocence in people’s actions, team building, coaching and feedback, active listening, and “shadow of a leader.” The “shadow” premise describes how employees take cues from leaders’ verbal and nonverbal cues.
During retreats such as this one, facilitators lead participants through a series of didactics, exercises and reflections to internalize awareness of the behaviors necessary to achieve desired personal and organizational results.
To transform the culture, our entire workforce needs to experience such a development opportunity. The Renewal workshop was streamlined to two days; 14 energized leaders went through a two-week “train-the-trainer” program to cascade Renewal through the ranks. Senior leaders committed to pulling people off their lines incrementally to attend workshops held weekly for the first couple of years and gradually decreasing in frequency.
It is difficult to pinpoint exactly when the number of individuals trained in Renewal at HFHS reached the critical mass needed to provide the momentum to transform and sustain a culture. According to many change management experts, this requires training approximately 30 percent to 50 percent of the workforce for five or more years. But the individuals trained in Renewal have already created a positive HFHS culture—and improved financials. By 2005, we were back to a 3 percent operating margin. Employee satisfaction scores in 2005-06 were the highest in history. To date, more than 11,000 employees have gone through this workshop; the experience set the stage for subsequent leadership development. We have created a safe place to experience challenges, have difficult conversations and hold one another accountable. People learn healthy ways to push back, coach and provide feedback. We learn that for “me” to win, someone else in our team does not have to lose.
Build a Competencies Infrastructure
Renewal carries on at HFHS, with Renewal language woven into the curriculum developed and expanded at HFHS University. Leadership competencies—skills and behaviors—have been further defined to address business initiatives. HFHS managers have spent several years building a learning and development infrastructure, including investment in an online learning management system (LMS). One full-time employee administers the LMS, and existing organizational development consultants support HFHS University, a $2 million virtual learning environment created to:
HFHS University provides one-stop shopping for online and classroom training for leaders and employees, reporting functions for tracking and compliance measurement, a curriculum to meet competency requirements, personal transcripts and inventories of individual training history, and the ability to access training from home via the Internet. Leaders are required to complete 40 hours of development per year.
In 2007, more than 120,000 courses were completed through HFHS University. All members of the senior team act as faculty for classes and employee orientation.
We measure success in a variety of ways. Job performance and impact on the organization are measured by identifying objectives of targeted training—such as competencies and strategic objectives—and by evaluating improvement at intervals after training. These include 360-degree assessments, supervisor evaluations and customer service scores, for instance.
Build the Executive Team
However, leadership development represents much more than “training.” It is a multifaceted process for strategically and systematically developing the skill sets, knowledge and behaviors aligned with competencies needed to execute the strategic plan. This requires alignment with all talent management functions, including recruitment and retention, performance management, and succession planning.
We’re currently implementing such comprehensive talent management. The moment we recruit talent, retention efforts begin. To ensure that we create the right environment, we need to approach talent development as an integrated and aligned experience. To do that, we need to prepare leaders to create that experience.
Talent management begins with identification and assessment of core competencies for leaders. Hence, in 2007, HFHS partnered with the National Center for Healthcare Leadership (NCHL) in Chicago and Dr. Usha Satish from the Leadership Evaluation and Development Center—now LEAD, a part of HFHS—to prepare the HFHS executive team.
We began with individual and team assessments to identify strengths. Our assessments include NCHL’s individual 360-degree evaluations based on NCHL’s competency model. It identifies critical competency areas—transformation, people and execution—for health care leaders (see “Three Domains” graphic). Senior managers’ performance appraisals and a portion of their executive compensation are tied to development of these competencies.
After our evaluations, I decided it was important to model the way this knowledge could be used. So I gave my business unit leaders the full results of my evaluation of strengths and opportunities and my personal action plan for working on these issues. I encouraged them to take the same approach throughout the organization—and they have.
Behavioral changes result from such training. For example, I rank one executive who works for me among the most technically competent people I know, yet his ability to influence others was diminished by a fact-based communication style that offered little in the way of building relationships. Working with his assessment, this individual learned the power of storytelling and conversation, and his credibility has jumped.
What is the most critical competency? In my mind, it’s self-awareness. Leaders who manage ego needs and have honest conversations with themselves about how they show up to lead become effective and sustainable leaders.
We also conducted a “climate” survey to measure leaders’ competencies and abilities to create healthy climates within their teams. In addition, each executive participated in a “cognitive simulation” with LEAD that identified other critical competencies. A cognitive simulation creates real-time business scenarios where leaders experience crises, team building, prioritization and decision-making. Trainers assess individuals’ strengths and weaknesses for development.
The feedback, on both an individual and team basis, was remarkable. The mirror was again held up for us. This time, the challenges were different. Our team is not reluctant to embrace development; in fact, we recognize the need more as we ponder talent management. Our challenge now will be finding time to commit to individual development.
Since results of the assessment were shared with the senior team in October 2007, each executive has created a development plan and signed up for additional simulations. Many work with coaches to stay focused on their paths.
From a team perspective, four opportunities for growth were identified: collaboration; accountability; talent and self-development; and strategic, complex thinking. We have established a team of leaders from around HFHS to create strategies for their organizations to develop these four competencies.
In addition, in 2008-09, HFHS rolls out online performance management for all employees that links goals, leadership competencies, development plans and HFHS University.
The expectations: We want to develop leaders, and we expect them to develop those on their teams. We’re about to redesign a succession plan for managers and have built this process into an annual cycle.
The competencies to be a great leader apply to all industries. HR leaders in all businesses need to inspire and create the business case for a healthy culture. After establishing that platform, HR professionals need to drive interactive, relevant, accountable and meaningful training that helps leaders develop the right habits.
It is crucial that our leadership team lead the way in positioning HFHS for positive results. We owe nothing less to the communities we serve.
Robert Riney is chief operating officer of the Henry Ford Health System in Detroit.
Presentation:Driving Leadership Development in Health Care: The Challenges, the Opportunity, the Imperative(National Center for Healthcare Leadership and the Henry Ford Health System)
Web sites:National Center for Healthcare Leadership
Henry Ford Health System
Henry Ford Health System
Services: Comprehensive health care serving more than 1 million Southeastern Michigan residents annually
Ownership: Not-for-profit health care corporation
2007 revenue: $4 billion
Facilities: Seven hospitals, more than 50 ambulatory care sites and more than 100 other locations, from retail optical centers to hospices
Employees: About 22,000
Connections: www.henryfordhealth.org; firstname.lastname@example.org
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