HealthCare Voice

Leadership Check-Up

The leadership team that you have today may not be the team that can help you move to the next level of performance, a new peak that may mean the difference between success or selling to a competitor.

The road ahead for healthcare providers is fraught with unprecedented challenges.  Today, more than any other time in the last 30 years, CEOs realize that waiting too long to fine tune their leadership resources could lead to serious consequences.

There is an emerging trend  -- CEOs are giving their organizations a “leadership checkup” using their internal organization development team or an outside consultant.

This is a dicey proposition, especially if you have a stable team that, up to now, has consistently produced good results.  You do not want to embark on a assessment strategy that will put valued members of the team "in play" – sampling the job market in an over abundance of caution because the leadership assessment could cost them their job security.   

To succeed – that is to say to produce a realistic assessment that provides insight while valuing the contributions of the team – you must begin by selecting the right consultant, one who offers a balanced set of skills, from diplomacy and compassion to operational insight and a keen understanding of the challenges ahead.  But more importantly, you must have a consultant that, in the privacy of the CEO’s office, will tell them what they need to hear, not what they want to hear, free of financial motives.

Most consultants come to the table with a set of built-in weaknesses – most of which are built around the desire to secure additional add-on consulting or a future engagement.  Not everyone in the market is concerned with doing the right thing, particularly if their performance and financial incentives favor the art of winning add-on business.

Subject matter expertise is also important.  Healthcare is a complex and unique industry.  Legendary management guru Peter Drucker posited that hospitals are among the most complex of human organizations every created.  Leadership experts or coaches that lack a depth of knowledge of healthcare delivery and the impact that budget deficit reductions will have on healthcare providers are not ideally suited for this work. 

The game is changing for executive recruiters as well.  The traditional transactional model of “order placement” will not work.  CEOs need more than an “order taker.”  They need a leadership consultant who understands the issues, and who is as obsessed with the results as their Client.

The solution for CEOs is to look for executive recruiters who understand that their 50-year-old business model has changed and that it is not just about the fee.

In the end, we will all change.

 

© 2011 John Gregory Self

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It Is Good To Be Nice

Hiring “nice” is a great idea, especially when you combine that with a healthy dose of passion.

That is the approach Andy Lansing takes.  A recovering lawyer, Mr. Lansing is President and Chief Executive Officer of Chicago-based Levy Restaurants, a food service company with a diverse portfolio of operations that includes award-winning restaurants such as James Beard-winning Spiaggia and Bistro 110 in Chicago, Fulton’s Crab House, Portobello and Wolfgang Puck Grand Café at Walt Disney World Resort, renowned sports and entertainment venues like Lambeau Field in Green Bay, STAPLES Center in Los Angeles, and American Airlines Arena in Miami, and events including the Super Bowl, World Series, Kentucky Derby, NHL and NBA All-Star Games and the Grammy Awards.

If healthcare is one of the most complex businesses in the world, then leading a company of restaurants and food service operations all across the country can be more than just a challenge, especially in tough economic times.  Mr. Lansing says give him people who are nice and passionate and he can teach them everything they need to know, and everyone can have fun doing it.

In healthcare we take ourselves very seriously.  It is deeply baked in our industry’s DNA – we do very serious work, from brain surgery to delivering babies or suturing a child’s cut.  We hire people with the appropriate credentials, technical expertise, and experience.

Our choices for leadership reflect that industry DNA.  Sometimes we hire more for credentials and supposed track record with almost no emphasis on the candidate’s personality or leadership style.  Then we are shocked when there is a CEO meltdown and an expensive severance agreement. 

Mr. Lansing argues that there are two kinds of leaders – those with positional power and those with personal power.  He describes positional power this way: “I have power over you because I am your boss. I am important. I am the CEO. You should fear me because of who I am.”

Personal power, Mr. Lansing explains, “is what is inside you.  It is how you treat people and how you lead.” 

Mr. Lansing’s leadership philosophy is a model that some hospital CEOs should take to heart.  Employees will always work harder, go the extra mile and care more about what they are doing for the capable CEO who knows how to treat people.

Over the next several years, healthcare will face unprecedented challenges – from reimbursement to more scrutiny on quality of care and patient safety.  CEOs will need every advantage they can muster to thrive in this type of turbulent environment. 

The “screamers,” the “barkers” and the abusive, tough-guy senior leaders who think their way is the best way should sit in the time out chair and learn some important lessons from a very smart CEO who is passionate about his company and who is also a nice person.

Source:  New York Times, “A Deal-Breaker Question for Job Interviews," Sunday, Aug. 28, 2011

© 2011 John Gregory Self

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4 Questions Physician Candidates Should Ask Recruiters

There are four critical questions I believe that physicians should ask before submitting to the wooing calls of a recruiter.

I need to disclose that I began my search career recruiting physicians. Secondly, while I no longer recruit physicians strictly for clinical practice, I am involved in recruiting physicians for C-Suite and executive leadership positions. 

The American College of Physician Executives' LINKEDIN site is currently featuring an interesting discussion on this very subject.  I made some comments there but I wanted to bring them across to my blog for your review and comment.  If you are a LINKEDIN member I urge to visit this page.

Physicians can quickly and effectively "qualify" the recruiter and the opportunity by asking these questions. 

1.  Is the recruiter working on an exclusive, retained basis or with a non-exclusive contingency contract?  

Be wary of the non-exclusive agreements. Success in the latter case comes by submitting as many "qualified" candidates as possible, as quickly as possible. In this scenario, it is primarily a metrics game -- if a recruiter submits more candidates before their competitor, they will have a better percentage of closing the deal.  With this approach the physician's interest typically becomes secondary. It is about the commission and recruiters working in this environment, and in a few of the big "mill" retained firms, are pressured to close deals. 

 2.  What type of placement guarantee is the recruiter offering the client?

As a candidate, this is one of the most important questions you can ask.  Why?  No placement guarantee, or anything less than a 1-2 year guarantee, means they do not have much skin in the game, except their reputation.  Research suggests that most physicians stay at least a year so equal or less time is not much of a guarantee. Physicians should care because the more risk the recruiter has, the more concerned he or she will be in ensuring the "fit" is right and that the physician candidates have a complete and accurate understanding of the opportunity. In other words, alignment of interests.

3.  Are you getting full disclosure?  

Every organization, from Mayo and the Cleveland Clinic to a multi-specialty clinic in rural Alabama, has issues that they would rather physicians not know about before they sign. I refer to this as the "good, the bad and the ugly." One clinic did not like to disclose their turnover rate -- it seems their attractive comp plan was attractive on paper, not in practice. The recruiter, who had a 6-month placement guarantee -- which is to say no guarantee -- was practicing the search equivalent of "don't ask, don't tell." In one year, 6 physicians left the practice. Their turnover was 50% at 24 months, according to the CEO of the neighboring hospital who quit providing income guarantees until the parnters in the practice agreed to full disclosure of their good, bad and ugly issues. 

4.  Is the recruiter going to send you written information disclosing all the essential elements of the practice -- salary, benefits, and the good, the bad and the ugly?

If they can't or won't, run, do not walk, away. 

Some recruiters will argue this is an unrealistic model. I would argue that is exactly why this segment of the recruiting industry "enjoys" so much criticism.

Physicians, who were once at the top of the healthcare food chain in terms of earnings and importance when I began my career in the mid-1970s, should not be treated less appropriately in the recruiting process than other healthcare executives. But that is exactly what is happening in far too many cases day in and day out.

© 2011 John Gregory Self

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Annual Performance Reviews: The End of an Entitlement

Employees cherish a gross sense of entitlement in the form of their annual performance review and the almost certain yearly raise.  In many organizations, this “right” extends to  the very job itself, regardless of performance or economic conditions.

 The irony in the odd conceptual evolution of annual  performance reviews and obligatory raises, is that we are not talking about a unionized workforce. 

 In good economic times, this sense of entitlement in the workforce grows.  In bad times, it is the source of enormous friction and decline in employee morale, both of which create a distraction from the organization’s mission.

In many U.S. Hospitals, the system has been in place so long that employees cannot imagine any other alternative.  As long as hospitals are doing well -- defined as having ample days of cash on hand -- there is no sense of urgency to change.  In this misaligned employer-employee relationship, the business principle that cash covers a multitude of sins could not be more accurate. 

As healthcare providers we know, or should know, that we are on the verge of a tsunami of change that will, sooner than later, force an overhaul in our business model, a variation of which we have used since the arrival of Medicare in the mid-1960s, with a course correction in the mid-1980s with the implementation of DRGs.  Congress and regulators have tweaked the model so many times that we now operate business systems that are so complex that our patient bills are almost indecipherable.

The Patient Protection and Affordable Care Act, which in theory is designed to reduce healthcare spending, may or may not be fully implemented.  In the end, that will be up to the 12 wise men on the Supreme Court, but that is not the big game changer that will blow up the current system of how we deliver care and how much we are paid.  The bomb is the inevitable sharp and ongoing reductions in Medicare and Medicaid payments that will be necessary to control the annual deficit and long-term debt which are, previous Congressional cuts in spending notwithstanding, still very much out of control.

So the day of entitlements as evidenced by so many current dysfunctional performance review and annual merit pay programs, will require a shift in the traditional top-down, command-and-control relationship  that we “enjoy” with our employees today. 

When the next round of federal reimbursement reductions, that will be steady in their frequency and painful in their impact, begin, it will be too late to recover if you are not prepared. 

The smartest guys in the room, those CEOs who understand that this inevitable storm is building on the horizon, are already beginning to think about what the next generation of health system will look like, how it will be organized, and what all of this will mean to their employees, increasing numbers of whom will be physicians. 

On Friday I will outline an essential first-stage employee strategy.  Until then, I would like to hear what you think.  How do you see the deficit/debt crisis affecting our existing business model and what would you do to prepare for a challenging future?

© 2011 John Gregory Self

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The Gospel of Service and Excellence

With all the pressures on a CEO, it is tempting to think that a consulting package can solve problems that essentially begin and end with people. Employees and physicians look to the boss.  If he or she is not walking the talk, it hits the informal employee news wire, spreads through the organization -- that the latest service initiative is nothing more than the latest customer initiative -- and the program fails.  The best approach I have seen is what I call the Gospel of Service and Excellence.  

Every day, the CEO talks about it and lives it. 

That is why verbal communications skills and leadership presence are shooting to the top of our chart of CEO critical competencies.  If you cannot personally communicate the value and importance of change, you cannot lead change.

On Sunday I am speaking to the national meeting of radiology/imaging professionals at the massive Gaylord convention center near DFW International Airport.  My focus will be on Employee Empowerment: A Strategic Imperative. I have spent a lot of time talking to hospital CEOs and other leaders who are on the cutting edge -- not necessarily in the spotlight -- for improving quality care and and building an environment of safety for the patients.  

Here is what I have learned:

1. Excellence in service and top patient satisfaction scores must go hand in hand but currently that is not necessarily the case even with some of the perennial industry leaders.

2. Landing on the Top 100 or the Top 50 lists is great PR but how are your HCAHPS scores? It is importnt to focus on processes and techniques in improving patient care and safety, but in your zeal to improve, do not forget the patient and their family.   

3. The unsung heroes, those CEOs who understand that improving quality and safety is much more important than securing a top ranking by some national magazine or consulting service, are more often than not those who use the Gospel of Service and Excellence technique.  Not a day goes by that they are not walking the halls, visiting with employees, physicians and patients, preaching the importance of adhering to best practices.  Yes, they invest in technology to measure and track performance.  Yes, they draw on outside expertise from time to time to get a fresh set of eyes for performance improvement opportunities.  But the CEO does the heavy lifting of driving the change, not a coach or team of consultants. He is walking the talk and asking for input at all levels.

© 2011 John Gregory Self

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Customer Satisfaction Programs: There Is No Silver Bullet

Success of a brand-name customer service/satisfaction initiative is not based on which pricey program a healthcare organization buys, but the commitment, the passion and the skills of the Chief Executive Officer.

Healthcare organizations looking for the magic silver bullet, should understand that it does not exist.  

Quint Studer was a very successful President of Baptist Hospital in Pensacola, Florida, not because of some template or costly consulting package.  No, he succeeded because of his commitment, his drive and deep understanding of common sense leadership principles. There is nothing magical about his very popular approach, or of those promoted by his able competitors.  They provide a solid framework for cultural transformation.  But without a strong CEO, no army of cosultants can produce an environement that fosters clinical excellence, patient safety and exceptional patient satisfaction scores.  

There is no substitute -- none whatsoever -- for a dynamic leader who can craft and communicate their vision, and who can successfully build a strong leadership TEAM that, day in and day out, delivers exceptional results.  

If you need to believe that there is a silver bullet, then there it is -- hard work and personal involvement by the CEO.

© 2011 John Gregory Self

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Going Out On A Limb...Not Really

In one of the silliest of debates in the world of healthcare, challenging economic times and the inevitable cuts in reimbursement from healthcare reform and deficit reduction have fueled a renewal of the endless haggling over who is better: not-for-profit or investor-owned hospitals?

Let's cut to the chase:  the winner is/will be those hospitals that achieve superior results in terms of quality, safety and patient satisfaction.  Who cares about the ownership structure?

I have worked in the healthcare industry for more than 30 years.   When I first went to work for Hermann Hospital in Houston as a young PR director and the first director of Life Flight in early 1976, there were actually more investor-owned hospitals in the market than the staid non-profit behemoths of tertiary care.  While the big tertiary care facilities that took care of the sickest patients were tax-exempt, the hard-charging investor-owned community facilities reshaped the market dynamics in terms of competition, the speed with which business decisions were made, and their ground-breaking efficiency.

Today, the pros and cons of which ownership model is superior are once again being debated.  The truth is that both ownership structures are fraught with weaknesses that healthcare reform and the ongoing deficit/debt reduction efforts will challenge.  

Who will win?  To borrow a line from the late Molly Ivins, a newspaper columnist who covered Texas politics for decades, "I am going to go out on a limb and tell you that I haven't a clue."  That said, I do know what will be the deciding factor.  Quality people.  Organizations that recruit and retain the best talent and who understand the consequences of the "new normal" and the lower rates of reimbursement, will end up on top.  If you do not hire and retain the best people, it is impossible to compete in a hyper-challenging financial/business model transformation.

Eventually, when the financial squeeze reaches painful levels, ownership structure will certainly come into play.  I think I know how it will play out, but that is a conversation for a different day. There are so many policy/reimbursement issues about which hospital CEOs have so little control   For now, if you are a hospital CEO, pay attention to the most important variable you can control:  the quality of people you hire and the rate of retention. That is one of the most important things you will do as THE leader.

© 2011 John Gregory Self

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OK, Here's the Deal

Several months ago, I announced that I was going to shift from writing a blog exclusive to healthcare to more general interest issues. I promised that I would get back to you when my plans came together. All I can say is that best made plans are subject to change. So, here's the deal.

I am going to continue with HealthCare Voice. The focus will remain on healthcare leadership, strategy, career management, talent acquisition, retention, team development, etc.  My brand advisors and some of my valued readers encouraged me not to stray from my original intent. So, I changed my mind.  

HealthCare Voice will continue to appear at least twice a week.  In the near future it will be moved to my website, JohnGSelf.Com which is being expanded by my capable marketing team at Brandnu Marketing, a DFW firm that specializes in helping organizations enhance their brands and grow their businesses.  HealthCare Voice will feature a new design but will offer the same subscription and push distributition capabilities (which means RSS or email alerts). I will get back with you before the site is changed so that you can renew your subscription or RSS feed based on the new URL.

Plans for a general interest blog in support of my public speaking business are in full swing. This blog will focus on a variety of subjects about which I have a strong interest. More on this later.

© 2011 John Gregory Self

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Organizations Do Not Care About People...

Organizations do not care about people, only people care about people.

_{That was the theme of a recent Seth Godin blog.  It is the people, plain and simple.} 

_{For the record, Mr. Godin is a marketing innovator who pioneered “permission marketing.”  His daily blog is the 15th most popular in the Blogosphere world.}

Next month I am speaking to a national meeting of the association of imaging management which has decided to hold its annual conference on the sizzling skillet that is North Texas in August.  My seminar theme is how empowering employees is a strategic imperative in our “new normal” economy where unemployment remains excessively high and consumers are tapped out.  I am going to make the case that empowering people is more than a strategic necessity, it is a moral imperative.

I speak and write frequently about the importance of people in business and how they – our employees -- should be our most valuable asset, just as we advertise in our annual reports and recruitment brochures.  Of course today, for the most part, that is simply not true.  Today, far too many CEOs are unwilling, or unable, to walk their talk, a fact that is not lost on their employees.  From hospitals to airlines, carmakers to manufacturing and retails businesses still view their employees as not their most important asset, but their biggest expense. The consequences of that approach are all bad, and accepting the inevitable adverse impact this mindset inflicts on our customers/patients, is immoral.

As I travel around the country, I see signs posted in the hallways and employee work areas that are designed to boost morale and reinforce the corporate culture, as if clever, pretty signs will achieve the desired effect.  “Our People Are Our Most Important Asset,” is in the top 10 of popular postings.  But the sad truth is that if companies have to resort to hanging signs to remind their employees, they are truly in trouble.  What they are really telling their employees is: 

“Our people are our most important slogan.”

 

© 2011 John Gregory Self

EXECUTIVE RECRUITMENT: Can You Afford Average?

It is a recurring question -- how can I be sure that I am hiring the right executive and that once they join will they stay?

In all honesty, when dealing with people, there are no absolutes.  But with the right search consultant -- internal or with a firm -- and a gold-plated recruiting/candidate screening process, you can substantially mitigate the risks. However, let the buyer beware:  if your executive search firm uses terms like “job order”, “hiring authority” or “fill rate”, more than likely they are a placement agency or staffing company trying to move up the financial ladder.  

The real secret to success in executive search is to select a partner or search consultant who possesses some important skills.  First and foremost, success in executive search is not tied to the number of years of experience.  That is helpful, but if the consultant lacks a particular set of skills necessary for success, years of experience will ensure only that you are buying experienced mediocrity.  Nor is the size of the firm of any consequence unless your organization is a multinational operator and geographic reach is important.  No, the secret lies in the search consultant who will be doing the majority of the work.  Does this person possess a deep understanding of the culture of the organization -- the values, the rules governing interpersonal relationships, and how decisions are made?  Do they require complete transparency regarding performance expectations, details regarding the hurdles that must be overcome to achieve success, and identification of the always dangerous sacred cows?  The consultant must insist that the client lose their natural desire to put their best foot forward while obscuring important problems or challenges that will become the organizational equivalent of an IED - improvised explosive device -- with career-limiting consequences.

Is the consultant who will do most of the work on your search, save perhaps the candidate's final interview with the engagement partner, present for the all important site work, or are they closeted away in the Firm’s office working on other projects?  (That is the most common model in the search industry.)

If your consultant does not force you to deal with the tough issues, do not be surprised if the outcome is only average.  Executive search is like dating and marriage -- decisions are made after four or five dates.   If the search does not force the client to deal with always-present nasty little details in advance of the marriage, there is a good possibility that it will not be a long and productive relationship and the divorce will be messy and costly.  

The truth is that far too many executive recruiters practice what I call “don’t ask, don’t tell”  recruiting. The partner signs the engagement, a consultant who may, or may not have been present for the site work, prepares a superficial job description and if the candidate doesn’t ask about the culture or potential problems that could affect their success, the search firm does not tell.  Oh, the big firms deny that is the case, but I have interviewed far too many candidates who say otherwise.

How confident is the search firm in their ability to find a candidate who will deliver value to the organization?  To test a search firm's true mettle, ask the partner in charge if they will guarantee their work for an extended period of time and listen for the reasons they do not.  Most firms offer a 12-month placement guarantee.  That is average.  There are one or two firms competing in the healthcare provider segment who will offer an extended placement guarantee, but they are the exception.

So the answer to the question is, in the end, really this:  Given the cost of an executive search -- professional fees plus an overhead assessment and travel costs:  Can you afford average?

© 2011 John Gregory Self

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Quality and Safety: The Secret Ingredient for Success

I have had the pleasure of working with some great health system and hospital clients that have achieved national recognition for achieving meaningful and sustainable improvements in quality of care and patient safety.  These are not manufactured results for some national magazine survey or billboard campaign.  Their quality scorecards, based on national standards, are impressive.

Do you know what characteristic is evident in each of these star organizations?  A CEO with a laser-like focus who is passionate about quality and safety, a leader who is willing to stake his/her personal and professional reputation on achieving and sustaining excellence on these two deliverables, and every employee in the organization knows it.

A colleague, someone I personally admire and respect, works for a health system that is struggling with quality. The employees know it.  They all talk about it – outside of earshot of the patients, of course. He is seeking another job, determined never again to work for a CEO who does not put quality and safety ahead of all else, including his social calendar or vacation schedule. 

All this talking in my friend's current organization has led to some amazing excuses and, sadly, inaction.  The leadership team just can’t seem to overcome their inertia on this critical subject.  Intellectually they want to do something but they cannot seem to see a clear pathway.  Their excuses run the gamut – take your pick from the usual suspects: poor leadership by the CEO; doctors who have grown complacent or more focused on financial returns than their patients; overworked nurses; the nasty, socially reprehensible financial costs associated with frivolous malpractice claims.

 We all know that there are causes for poor quality -- it is not always simply the physician or a nurse -- but many organizations adopt what I call “non-blame solutions.”  They spend a great deal of money on quality improvement in search of an easy answer where none exists instead of focusing on creating a culture of quality care that is real, and holds people accountable for improving the situation. 

All of this rationalization aside, I have come to believe that hospitals that suffer from continuing poor quality of care and patient safety do so because they choose to.  They could do something about the problem but they don’t.  What a damning statement, but the truth is that if you strip away all the excuses, the leaders and the physicians just cannot make the hard choices, ruffle feathers.  They say they do, because that is what people say who recognize that certain behaviors or outcomes or bad but lack the will or ability to drive change.

Sometimes it is just easier to do nothing or, worse, go through the motions – including meetings upon meetings, the engagement of consultants, the development of process improvement plans, and the investment in elaborate programs for collecting and plotting data.  The painful truth is that if the leadership team lacks the passion to fix the problem, if they are unwilling to stake their personal and career reputations on solving the situation, then most of what they say, the efforts they make, and the money they spend on equality improvement, is just the equivalent rearranging the deck chairs on the Titanic.

© 2011 John Gregory Self

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A New Type of CMO

Healthcare reform is extending beyond the Washington beltway.

You can see it in how health systems, hospitals and other providers are shifting their marketing strategies from the traditional wholesale approach -- physicians are the primary customer -- to retail marketing in which hospitals appeal directly to patients on the basis of quality, safety, technology, scope of services and access.  

As physicians shift their employment and business orientation from physician-owned practices to employment by hospitals and insurance companies -- yes, payors are beginning to acquire practices as well -- hospitals are turning their attention directly to the patients.

In the process, CEOs are creating yet another CMO position for their senior leadership team: Chief Marketing Officer. In the earliest days, marketing Vice Presidents or Directors were seen, more often than not, primarily as strategy, advertising and/or "sales" people.  

Providers now are quickly adjusting their perspective, acquiring sophisticated marketing information systems to aggregate and analyze a mountain of data hospitals have been collecting for years but never used in a meaningful way.

HealthLeaders.Com has published an excellent article, Image Makeover that is worthy of review. 

Read More.

© 2011 John Gregory Self

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Customer 2.0

The nation's hospitals, which have consistently lagged behind other industries in terms of management technology and service, will soon face a new demand for MIS innovation just as they are implementing new platforms, systems, and programs to deal with electronic health records and the concept of meaningful use.

It is called Customer 2.0.

It seems like only yesterday that some hospitals ventured timidly into the 20th century with call centers to assist clients navigate their way through a myriad of questions concerning unpaid balances, paying bills, scheduling and registration.  Now we learn that other industries are looking at innovative ways to meet consumer demands that want them to incorporate new media into the customer service mix.

This will not be a change that occurs overnight.  Thank goodness, since healthcare management information systems, which are today better than ever, are still far behind retail and manufacturing.  But this is a change that will come, and once the critical mass trigger is hit in other industries, it will sweep into healthcare.

Here is a post from Christopher Elliott writing in BNET, the excellent interactive business site from CBS:

"Brett Shockley, a senior vice president at Avaya, told a recent technology conference that businesses are just coming to terms with a new kind of consumer – he called it Customer 2.0 – and defined it like this:

They’re born with a keyboard. They’re born with an attitude.

Now that they’re graduating from college, they’ve got a disposable income and there’s about 80 million of them.

We’ve got to pay attention to all the different ways that they want to communicate. We’ve got totake all of this into consideration in our companies."

READ MORE.

If you are not a regular reader of BNET, I want to encourage to check in on this site from time to time.  They have some excellent articles. 

Now add to the mix that we will have less money for the whistles and bells – aka new technology – and the fact that we are change resistant, voila, you have yet another interesting confluence of competing interests that will make the CEO’s job – already one of the most difficult on earth – even more challenging.

 Have a great weekend.  I am staying indoors, if at all possible.  It is forecast to be 100+ again in Dallas.

 © 2011 John Gregory Self

 

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Five Reasons Hospital CEOs Get Fired

From Anchorage Alaska

Hospital CEOs have their hands full.  They face a boiling cauldron of operational, financial and competitive challenges – any of which could prove career limiting.  Surprisingly, however, many CEOs fail not because they lacked knowledge or expertise in running a hospital or dealing with the myriad of threats.  Rather the fastest-track to a severance agreement, or unceremoniously escorted from the building, can be found in five major failings.

 The overarching principles on this subject are two-fold:  First, CEOs and senior executives should know themselves. The second “first” rule is that CEOs should do no harm to the employees they lead or the customers they serve.  CEOs who keep their eyes on these balls will typically do well, all other things equal – knowledge, talent, and expertise.

So why do CEOs get fired?  More often than not it is style, or lack of political sensitivity, that will be a CEO’s undoing.  In more than 30 years in healthcare leadership – 17 years in executive recruiting – I have seen senior executives run aground many times over because they lacked the sensitivity to read, understand and adjust to the shifting political and marketplace sands that exist in virtually every health system or hospital, from the governing board and medical staff to the hourly employees who do the really important work.

Here are the five sure-fire issues that will get a CEO fired.

1. Micromanage your team - Micromanagers are like amateurs masquerading as "in-the-know" leaders. Let's be honest, if you have to get that involved in the operations of the enterprise, you are not hiring the right people.  When you micromanage, you destroy morale, and disrupt service.  You show me a hospital CEO or COO who is a micromanager and I will show you an organization that is, or will, suffer quality and  patient safety problems, and, eventually, poor financial performance.
2.  Be a Bully - There is no place in leadership for bullies/abusive leaders.  If you have to use anger, intimidation, or abuse to achieve targeted results, or if you enjoy calling out subordinates and humiliating them in front of their peers, you might want to reconsider changing careers. Your employees -- and your customers --  will be delighted you have left. In short, if you think that approach to management is smart leadership, you do not belong in healthcare.  Management and employee turnover is dangerous for your patients and it is very expensive.  The only way a CEO with this particular mortal sin can hold on to their job is if they work for an incredibly toxic board or a ridiculously misguided corporate entity that equates this type of boorish behavior with “tough” leadership.  There is no accounting for stupidity that manifest itself in this type of misguided and misinformed corporate or governing board oversight.
3. Ignore Your Customers – That is perhaps one of the biggest – and most common – sins in healthcare today.  Take care of your customers. They will take care of you (and your career).  Steve Jobs and Apple blew past Microsoft in terms of market cap, not because they treated their customers with dismissive indifference, but because they were passionately focused on offering an extraordinary customer experience – exceptional quality and best-in-industry service.  Day in and day out, Apple employees focus on their customers – meeting their needs with enthusiasm that is fueled by a belief that they are working for an outstanding company “that gets it.”  Fighting with your customers (read: physicians) – even though they may also be your competitors at some point in the day – is a bad idea.  It demonstrates, without equivocation, that you do not get it.  As a savvy politician once said, never fight with a man who buys printer’s ink by the barrel.  Taking a my-way-or-the-highway posture with the people who admit patients and generate revenue or the board members who evaluate your performance is a really bad idea.  As CEO, you are supposed to be on top of the emerging trends.  If your physicians are concerned with their revenue, be a partner, not an adversary. That point is not rocket science but you would be surprised how many CEO terminations can be traced to an arrogant belief that you can fight with your customers and still be a winner.
4. Excel in self-importance – CEOs, you should (read: must) check your ego at the front door.  It is not about you.  It IS about the people you serve.  In a crummy economy, the smart leaders are the ones who walk the floors and talk to their employees – on all shifts, all the time – looking for ways to improve quality and service, how they can make a meaningful difference in the lives of those who, day in and day out, actually do the work.  CEOs should regularly visit their physicians – all of them – on their turf.  Listen, learn.  This is not for show.  The employees and the physicians know when they are being taken seriously and they appreciate the effort.  So many CEOs fail to build this reservoir of goodwill that will be essential to survive the inevitable crisis that will occur during a standard tenure of five to seven years.  CEOs have all sorts of excuses why they can’t do this (I have heard most of them), but when the board makes the decisions to terminate, remember your lame excuses and then decide if you like the feeling of getting the boot.
5. Be a Phantom CEO -- You cannot lead from behind closed doors and a cadre of assistants who shield you from your customers and those who actually do the work that generates the revenue.   Stop trying.  In plain terms, do not build walls or a honking big silo of reinforced concrete around yourself.  CEOs should not let their fears or insecurities make them a prisoner of the executive suite, venturing out only for the weekly manager’s meeting or occasional hospital-wide event.  A CEO once told me, “I just do not feel comfortable interacting with the employees without others being with me.”  Insecurity is the stuff that walls and silos are made of.  Get a coach and get over it. Or get an outplacement adviser.  You will need one

Bonus Reason:  Avoid Accountability. Blame others for your failings.  Your       subordinates will really love you for that one.  Do the opposite.  Be accountable.         No one likes a leader who is full of excuses, who dodges accountability.  Revel in       being responsible for the success of the organization. Take joy in the challenge.         Talk about it constantly and hold others accountable.  That is a powerful       message.  No one likes a dodger who is better at excuses than results

© 2011 John Gregory Self

  Seed Newsvine

Can You Spell Bad Service? MICROSOFT

A year ago, as I worked to launch my new executive search firm, I experienced problems loading a customer/candidate database. I needed help in a hurry so I turned to the software company.  What a disaster in customer service.  It was if their motto was We make a lot of money selling software.  Don't bug us.  Visit our web site.

Welcome to Microsoft customer support.

If you are not a technical wizard, the Microsoft web page is as opaque as the complex Collateralized Debt Obligation instruments from the real estate debacle that were so complicated that the bankers who sold them didn't understand. Forget trying to find the right article, among hundreds, that will explain the issue and tell you how to fix it, assuming they were written in easy-to-understand English.   

They make it difficult to find their contact information and more difficult still to find a telephone number to technical support for the specific product.  When you finally get through the telephone decision decision tree, assuming you are not cut off, you are then connected -- using a system that is only marginally better than two orange juice cans and string -- to a technical support guru who is obviously not in the USA.  You struggle to hear. Understanding the representative is another struggle.  A pronounced accent and a bad connection is one definition of technical support hell.

Now compare that with Apple.  Today I had a question; I used their super fast Safari browser, easily found the technical support contact information, entered my product model number and filled in a quick form to explain the problem.  They gave me choices:

1. Immediate call.  They would call me.  The waiting time listed on the web was less than one minute.

2. I could schedule a call

3. I could use their knowledge base -- for the technically sophisticated among us

I chose the immediate call. Within seconds of entering my number, my telephone was ringing.  Apple was calling.  I also received a case number and explanation on my email. The technical support representative was friendly, eager to help and communication was not a problem... I will not ramble on.  Apple owners get it.  They know that this company is committed to making high quality products that surprise and wow their customers, and they back that up with what many think is best-in-industry customer service. No competition.  

Microsoft service is a long standing bad joke.  And given the mediocrity of some of their software, you would think they would take customer service a little more seriously. But what the heck, they are making a lot of money.  Too bad Apple just passed them in terms of market capitalization.

So now we come to hospitals.  We are not even in the same universe when it comes to customer service.  

A friend visited her physician who works in an integrated health system. They took x-rays, performed lab work and gave her two major injections to counter an infection.  She is a Medicare beneficiary.  Several weeks later, she received a bill, which she paid.  Then she received another much larger invoice, which was for her lab work.  Immediate payment was requested.  It seemed high, so my friend called Medicare to determine how much they had paid.

Guess what? Medicare had not been billed. Medicare's representative advised her to wait to pay that amount until the clinic filed a claim and Medicare determined how much they would pay.  The suggestion was clear -- that if my friend paid the clinic the full amount now, she might have to wait for months before receiving a refund. So she called the clinic billing office and dealt with someone whose name should have been: Ms. I Am Clueless. They discussed the situation but it was unclear to my friend if she made any progress, if anything was resolved, based on her conversation with the customer service representative. Hence the clueless moniker.

This week my friend received yet another bill for a different amount for the same test, but the amount -- $43 with another $4 tacked on as a late fee because the amount had not been paid in 30 days. She called the clinic back and talked to another customer service representative, Ms. Dismissive Indifference, who said she could not see why they had added a late fee since the payment due was not late.   In the end, however, my friend paid the principal amount and the late fee. She was told that it was just easier to do so.  I an era of tightening reimbursement, I guess that is just one small way to boost revenue. 

The big bill apparently is still rattling around in payment hell waiting for a settlement. 

This story, unfortunately, is fairly common. Not all hospitals and large clinics operate this way.  There are some great operators who get it right every day.  But many do not.

I work in healthcare and I am beginning to hate even thinking about going to my doctor. He is part of a big clinic whose centralized business office is run, I have come to believe, by some obscure, inept arm of the government.  Who needs the aggravation?  It is like dealing with Microsoft.  

The problem for most hospital CEOs is that they only hear about these incredible stories only if someone complains, which my friend will not do.  So absent an aggressive pro-actve customer service program that can identify problems before they alienate clients, nothing much changes.  Far too many are like Microsoft's leadership.  If they are profitable, the seem to say, don't sweat the small stuff.  I guess that means service, too.

Healthcare providers need to stop and take a page from Apple's playbook. They understand customer service and they love to exceed their customers' expectations.

 © 2010 John Gregory Self                        

Health Systems, Hospitals Got It Right

Because I am not shy about criticizing or challenging my industry – healthcare – when we fail to live up to our mission of quality/safer patient care and support for the communities we serve, I owe it to my colleagues to voice my support when I believe they get it right.  They have in one very important area.

Executive compensation continues to be a hot subject both in the U.S. and Europe.  Not a week goes by without a news report, analysis or essay on the subject. While the current lightning rod is the large investment banks, there are far too many public corporations that are guilty of bad practices in how they pay their executives and how they explain it publicly.  

The central issues giving life to this continuing flow of coverage on the subject are the size of the base salaries and/or bonuses, the relationship between the pay for some easily understood performance metric, and the rights of shareholders – or the lack thereof – when the “owners” of the company are not happy with size or justification for the genrous awards.

Executive compensation issues and the financial community’s sense of entitlement, continues to irk regulators, millions of small business owners and “average Joes” everywhere.  The large banks single handedly drove this country to the verge of a global credit market contagion.  However, the continuing problems and lack of transparency in executive compensation are not confined to the banks.  There are hundreds of examples of corporations throughout the U.S. and Europe that treat shareholders as troublemakers of the worst sort if they deign to believe they are entitled to any rights  to have a meaningful say on this issue.

In healthcare delivery, we have kept our wits about us on executive compensation when other industrial and service sectors lost their way. We are not perfect, but our industry does remarkably well, all things considered. 

While there are health system and hospital CEOs who earn high six and low seven-figure incomes – and they are the exception – there are few examples where the size of compensation of a hospital CEO is inconsistent with the scope of responsibility and the complexity of the challenges these executives face.  In fact, there are examples aplenty of hospital CEOs of difficult-to-manage public and mid-sized community hospitals who are underpaid for the work they do and the results they produce. 

I am not going to discuss the payor or pharmaceutical segments because I lack the expertise.  My search firm does not work in those areas, but I believe there are certainly examples of these bad  compensation practices in the health insurance, technology, and pharmaceutical segments.

Health system and hospital boards, for the most part, are responsive to their communities and tend to be prudent in evaluating the CEO and how they pay him or her for the results they produce.  No, community boards are not as transparent as they should be in some markets, but even in the worst of cases, they are infinitely more responsive than the boards of far too many major public corporations who have created more rules and hurdles to block true shareholder input into how the company is run.  It is a maddening situation for many mom and pop investors, and increasing numbers of institutional investors, who are tiring of the corporate arrogance and greed.

Hopefully, as community healthcare organizations deal with the immense challenges that are part and parcel of our “new normal” economy, persistent high unemployment and anemic growth rates, their boards will become more transparent, not less, and more communicative, not less, regarding the size and scope of their community benefit which is how they justify their tax-exempt status.

Big corporations may have a legal requirement to be more forthcoming, but community healthcare providers have a moral and ethical duty.  And there is a big difference. 

 

© 2011 John Gregory Self

Seed Newsvine

Take The Time

Today I received a thank you card via PLAXO, one of a number of social networking sites, thanking me for being thoughtful.  It was from the CEO of a health system in the Mountain West who appreciated the fact that I remembered her birthday. "Thank you for your thoughtfulness."

Tough and challenging times lie ahead for healthcare leaders.  We will see unprecedented reductions in Medicare and Medicaid funding, the promises of the Patient Protection and Affordable Care Act notwithstanding.  These reductions will force providers to embark on structural reforms that most never imagined in their lifetime.  

There will be pain caused by our instincts to resist complicated reforms that upset our values. These changes will be especially hard on many of our key stakeholders such as our physicians and our employees.

Senior leaders who focus solely on strategy, the daily, weekly, and monthly metrics, and the month-end results, will not be as successful as those CEOs and their teams who keep their employees and customers front and center.  When the crunch hits, we must all resist the temptation to view maintaining these important relationships as an expense, a secondary priority, or something that can be all together forgotten in the name of "making the hard financial choices."

In the end, those healthcare organizations that thrive in an era of radical and painful change will be those who have employees who have been engaged and empowered to make their organization the best.  

To be a successful healthcare organization over the next 10 years means investing today in people and relationships. At the core of this effort must be developing a reservoir of goodwill with those stakeholders.

CEOs who understand that they must focus on their role as a strategist, resource coordinator, and chief relationship/communications officer will thrive, provided they delegate daily operations to a competent management team.

Leaders who focus on the big issues but remember the small things -- sending an employee a birthday card, a congratulatory note for going the extra mile, or making an unannounced visit to a department to recognize someone for a job well done is such a minor event in an otherwise busy day, but pays huge benefits. 

Effective, successful executives and thoughtful leaders are one in the same. Over the next 10 years, this leadership truth will become very apparent.

IMPORTANT QUESTIONS

1.  Do you regularly make rounds on all shifts?  Do you require your executives and managers to visit employees and physicians on a regular basis on all shifts?

2. Do you take the time to listen to what employees and physicians are telling you?  Do you follow up in a timely manner?

3. Are you promoting bottom-up innovation?  Top-down organizations will struggle to keep pace with sweeping changes over the next 10 years. You cannot turn this essential cultural orientation off and on like a light.

4. Are your employee-stakeholder communications leading edge and effective? Is there substance that engages employees, physicians and community stakeholders on important issues?  Do your distribution platforms connect with the age cohorts of your audience?  

5.  Do you have a weekly communications plan that always emphasizes the organization's core values, the more immediate key issues and performance targets, or do you work off the cuff?   Are you promoting real transparency or are you playing the transparency game?

© 2011 John Gregory Self

Seed Newsvine

Irony and Hypocrisy On Wall Street and Our Very Short Memory

There is no question that the United States has experienced a deep and profound recession.  Some economists argue that our nation was on the verge of a depression when decisive action by the Bush administration, albeit with some major gaffes and no small amount of good luck, halted the plunge and saved us from years of economic pain unlike anything this nation has ever seen.

A worldwide banking crisis caused by the bad behavior of some Wall Street bankers and mortgage loan originators and the interlocking mess of bad loans, collateralize debt obligations, and credit default swaps, was narrowly averted.

Credit markets locked up.  Even healthy companies like General Electric and Boeing, that had nothing to do with the home loan bubble or those incredibly complex financial instruments that the “bankers” on Wall Street bought and sold as if they actually understood them, had great trouble obtaining financing for daily operations.  Small companies like mine were completely shut out of the credit markets.  No problem, it only cost me 16 years of my life and a lot of hard work.  

The United States, indeed most of the free-market economies, were at the edge of the abyss.  Most Americans did not realize it at the time, but this nation and its financial system were on the verge of a series of events that would have plunged us into a depression far more devastating than the Great Depression.

Greed ruled the day.  All of this financial mayhem and pain was caused in no small part because some greedy executives and traders were more interested in earning big fees and enormous bonuses than doing what was right.  Even when the supply of crappy mortgages ran out, these bankers created investment facilities out of whole cloth.  They knew their behavior was risky, even in appropriate, but they took the money anyway and kept looking for more of the bad deals to do.  Even when they knew what they did was wrong, there was no remorse. 

Regulators, who had the power to stop or slow this crisis down, did nothing.  After the carnage, with thousands upon thousands of innocents losing their jobs, their retirements and self-respect, the former Chairman of the Federal Reserve, Allan Greenspan, was quoted as saying, in effect, that he could not believe that capitalism’s famous “market forces” did not force bankers to do the right thing. 

Angry Congressional leaders, who were asked to turnover billions of dollars of taxpayer money to the Treasury Department in an attempt to unlock the credit freeze, apparently were “surprised” that this whole mess happened. 

As the smoke cleared, Congress reasserted itself.  Determined not to let this type of crisis occur again, they created a wealth of new regulations in a major bill, Dodd-Frank Wall Street Reform and Consumer Protection Act.  This is not a perfect bill but imperfect legislation often emerges when free-market capitalists behave badly.  Over the next few years, it will need to be tweaked and revised to mitigate unintended consequences, which is a common quirk in many new laws.  

I do not believe that government can provide all the answers to our national challenges, our problems or even unusual events.  I do believe that government must provide moderate, even-keeled regulatory oversight to minimize any negative impact from those whose avarice propels them to irresponsible or illegal behavior – those who could care less about the “suckers on Main Street” who actually believe in following the rules.

Now, remarkably, some of the same bad-boy bankers who created this havoc, and who profited handsomely, are whining about excessive regulation, predicting all manner of dire consequences for the U.S. economy.  These Wall Street leaders would have you forget their near miss and just trust them – again – to do the right thing. 

Some members of Congress, well-intentioned small government conservatives who decry regulations, and others who are more interested in maintaining their political fundraising pipelines to the Wall Street titans, are clamoring for repeal of the entire bill – the good, the bad and the ugly.

As I watch this extraordinary mix of irony and hypocrisy, I am reminded of an ugly story of marital infidelity with a similar outcome.

A wife arrives home early from an out-of-town trip.  She catches her husband in their marital bed with a neighbor’s wife.  The shocked wife understandably explodes in anger, hurt and shame.  She storms off into another part of their large home to regroup.

The neighbor’s wife beats a quick retreat out the side door.  The offending husband calmly goes to his bathroom, takes a shower, and changes clothes.  He retires to his study to smoke a cigar, drink a single malt Scotch and read his Wall Street Journal. 

Meanwhile, his wife has been noisily cleaning the house.  Her anger has driven her to the edge.  She is stunned by her husband’s callous bad behavior.  Cleaning the house, she reasons, is a safe and non-violent, stay-out-of-jail way to work off her rage.  After several hours of work she finally barges into her husband’s study to complete her work.  She loudly launches into vacuuming and dusting.

Her husband looks up from his paper, cigar in hand, takes a sip of scotch, and asks, “What are you so upset about?”

Sound familiar?

 

 

© 2011 John Gregory Self

Seed Newsvine

Leaders Who Are Bullies: No Excuse for Bad Behavior

Senior executives and managers who repeatedly castigate employees in front of their peers – yelling or humiliating them for whatever reason in whatever venue – prove only one thing: they are not leaders, they are bullies.

Physicians, the leaders in clinical care, who yell, curse and denigrate colleagues, nurses or other workers, are no different.  Their clinical brilliance, or lack thereof, is no excuse.  The problem of abusive physicians is well documented, so is the practice of far too many hospitals whose executives will look the other way when the offending party is a big admitter who drives significant profits to the bottom line.

It does not matter if the performance of the bully's target(s) is sub-par or whether the organization is in a turnaround crisis.  Physicians, executives and managers who employ all manner of lame excuses to justify their abusive behavior, are really just thugs masquerading as professionals. 

Boards or bosses who know that such behavior is occurring and allow it to continue for whatever rationalization, are no better than those who terrorize their employees. They act as if there are no consequences for tolerating such shameful actions. There are -- political, legal and economic.

Lest you think that I am angry about a relatively small issue – especially in healthcare – think again.  Let’s be fair.  This is not a problem that is limited to healthcare.  This unacceptable behavior touches every industry, in every corner of our nation. It is more widespread that anyone wants to acknowledge.

In my role as an executive recruiter, I hear of these stories far too often.  In my more than 30 years of executive experience, I have seen bosses shred employees in meetings and justify it as honest dialog about accountability.  I have seen CFOs shove employees against the wall “to get their attention.”  I have heard story after story of executives who blame their own mistakes on those who report to them.  I have seen leaders and managers misuse subordinates for no other reason because they can.

When I see this type of contemptible behavior, I often wonder what the bully’s home life is like.  

Being the victim of bullying -- emotional and verbal abuse -- brings with it a special shame. The victims often feel isolated, afraid to seek help. Notifying or asking for support from the wrong person -- the bully's ally or just another enabler -- may only aggravate the problem, especially if the bully's boss or the board believes the perpetrator is essential to the success of the organization. They rarely are, but that is part of the delusion. 

For the victim, quitting is not always an option.

I know victims who have risked exposure and called the hospital's compliance hotline because they simply could not take it anymore.  Some people have even tried notifying the Joint Commission because they did not trust the Chief Human Resource Officer to do the right thing or felt the internal process was compromised.  That failing is part of a larger story. When the chief of HR fails to investigate and protect, they are betraying the organization, themselves and their profession.  Being the HR advocate for an abused employee is not an optional job duty.

We are entering one of the most turbulent periods in the history of healthcare.  The impending challenges will require great leaders.  There is no place for bullies in the executive suite, as department managers or shift supervisors.  There never has been. 

© 2011 John Gregory Self

Seed Newsvine

Kicking the Can Down the Street, DeFacto Style

We hear a lot these days -- some would say 20-30 years too late -- that Congress can no longer kick the deficit/debt can down the road.  Of course, the clear and factually accurate implication of this statement is that Congress has seen this deficit/debt train wreck coming for a long time.  In their wisdom, they chose to put off the inevitable with year after year of highly touted cuts in spending which were actually cuts in the rate of increased spending, not net reductions leading to lower deficits, so we kept slipping further and further into debt.

What is going to happen now?  Since Medicare is and will continue to be the single biggest driver of federal spending, and future projected deficits, what role should healthcare providers play?

The healthcare industry’s normal response is to do nothing aside from complaining, and then adjusting to the significant reductions in reimbursement.  Spending more money, or even maintaining current funding levels, does not guarantee quality of care and service.  However, there is only so much money you can strip out of the current healthcare structure without causing irreparable harm to patients.  Major cuts, the size of which will be necessary to make a meaningful impact, will require a new business model.

I would argue that following our normal path of adapting is tantamount to kicking the can down the road.  

The Patient Protection and Affordable Care Act (PPACA) made an attempt to reduce the number of uninsured Americans but largely missed the boat in achieving material and sustainable reductions in healthcare spending.  Yes, I know what the Congressional Budget Office projected – important savings.  I know what the President and the Democrat leaders promised.  I am not accusing them of misleading the American people.  Rather, I am zeroing in on the phrase "sustainable reductions”.

The fact is that you cannot control healthcare spending over the mid-to-long term, whether it is for Medicare or commercial insurance, until you completely restructure the way patient care is delivered, how it is paid for and consumers are more financially responsible for the care they receive.  Tort reform should be included in the fix, as should improved accountability for quality and service, but those are not big drivers of the increased costs which this year doubled the rate of inflation and overall economic growth.

Congress, as I have said many times before, lacks the political will and moral courage in the current volatile political climate to revisit healthcare reform.  Democrats, some of whom understand the structural problems that contribute to higher costs, are of the view that any effort by Congress to lead a material restructuring will provide ample fodder for Republicans and Tea Party devotees to re-scream government takeover, socialism, the trashing of personal liberties... You get the point.  Republicans, while deserving much credit for the innovative ideas for Medicare reform in Rep. Paul Ryan's "Path to Prosperity", are seeing a rising tide of independent voters who are increasingly uncomfortable with, trending to outright opposition of, what is essentially privatization of a program that most Americans feel is a successful government program.  

This has all the makings of a black hole environment that will preclude Congressional action, must less leadership.

The most important business in Washington today is not the “people's business” unless you believe that average Americans today are focusing more on the next election rather than jobs and scrapping by to pay the bills.  The really depressing part is that when the 2012 election cycle is over, regardless of the outcome, the political operatives that create the red-hot, demonizing rhetoric, will begin thinking about the 2014 off-year election.  

So who is going to take the lead on this necessary restructuring?  Who will take the chance to design and promote a new approach -- from how hospitals are designed and operated to the role of physicians and other providers, to the payment mechanisms, economic alignments, and incentives?

Doing nothing, and adjusting to the marginal tweaks from Washington, is tantamount to kicking the can down the road.

What would you do?    

© 2011 John Gregory Self

Seed Newsvine

Apple Redefines Retail, Delights Customers

Apple has redefined the rules for retailing and continues to set records for performance.  Known as a company that consistently delights its customers with innovative new, cool products, its retail operations are critical to the company’s phenomenal record for innovation.

“They basically took the old book of retail, threw it out and started over,” Piper Jaffray Analyst, Gene Munster, said in USA Today on Thursday. 

Apple defied conventional wisdom that computer makers make poor retailers.  Gateway tried it with their country store concept in the early 2000s. Poor locations, uneven in-store service (I could never get waited on. With checkbook in hand and store associates chatting it up in the back I left and bought somewhere else) and poor merchandising produced a financial disaster, forcing them to close more than 180 stores in 2004.  Gateway is now owned by Acer.

At the core of their stores and customer interaction design is an overarching pillar of the Apple corporate culture: delight your customer with a great experience.

It is definitely working.  Apple now operates 323 stores employing more than 30,000 people worldwide, including 16 high profile stores.  One, their glass cube store in New York, is open 24/7, 365 days a year.  That one store brings in between $400 and $500 million per year, according to USA Today.

Sales last quarter shot up 90 percent to $1.5 billion to $3.2 billion thanks in part to the introduction of the iPad, the company reported.

Their retail success is not due to just their clever, well designed gadgets – computers, iPods, iPads and iPhones – but also to the way the stores are designed both in terms of layout and for customer interaction.

When you enter an Apple store you are met by a greeter. For those of you who have had the experience, you know these are NOT your Wal-Mart greeters.  They are hip, they are cool and they armed with an iPad to capture your name and why you are visiting the store.  When the first sales associate becomes available – the stores are almost always busy – they meet you at the product station.  If you own an Apple product and have a question, you are directed to the Genius Bar where Apple experts can help you solve a problem.  Most technical issues are resolved in the store, including hard drive replacement.  Compare that with a certain technical squad at one of the other big box retailers who also sell Apple: replacing the hard drive means surrendering your computer for up to two weeks.

When you buy a computer, a phone or one of their other products, an associate from the supply room brings it to you – having been electronically alerted by your sales associate with a special iPhone.

There are no “check out” counters.  Using the same iPhone that transmitted your product selection, the sales associate “rings up the sale” using credit and debit cards right on the spot.  Within seconds, you receive a receipt via email.  I do not know what happens when people pay with cash or check, but I suspect that process is innovative as well.

While our economy continues to sputter in a slow recovery mode, and with an ongoing onslaught of dire predictions that the U.S. has lost its innovation and competitive advantage in a global economy, I have a suggestion that will probably help improve your spirits for the future of American business.

Visit an Apple store.

 

© 2011 John Gregory Self

Seed Newsvine

Delighting Your Customers

Improving the customer service experience is one of the new buzz phrases that many healthcare executives are using in connection with improving their HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) scores. 

For my non-healthcare readers, HCAPHPS scores are important because they will drive higher rates of reimbursement in the near term.  Beyond that, the reality of the federal deficit and long-term debt crisis requiring significant cuts in Medicare spending, HCAPHPS will become a tool to penalize non-performing hospitals with materially lower rates of reimbursement.  For many organizations on the bubble of survival, those reductions could lead to closure.

In other industries, such as the consumer technology segment, tablets, MP3 players and software, an exceptional customer experience is the defining factor between market leadership, acceptable mediocrity, and/or embarrassing failure.

Apple is one company that understands the importance of the customer experience.  Delighting the user and excellent customer experience are hard-wired into the culture.  Some would argue those two phrases are two of the most critical elements in defining what makes Apple a leader in innovation and their ability to deliver products that work – that delight the customer.

By contrast, Microsoft’s reputation is “we get it right – the third time.”  They move product to market and then try to improve on it through endless updates and patches.  The Zune MP3 player and the VISTA operating system are two products that quickly come to mind.

At Apple, the designers are key to the development process.  They are among the most important people in the product development process, and other members of the team know and respect that.  At Microsoft, product development rarely includes designers, according to those who do business with the company.  They are an almost “after-the-fact” part of the process.  Recent “improvements” in Outlook are another example.

Apple’s products work and they typically delight their customers. Yes, Apple makes mistakes in design and production, the early roll out of MobileMe and the antenna for the iPhone 4 are two examples of mistakes that made it to public consumption, but for the most part, their mistakes are made and corrected in the design process. For Apple CEO Steve Jobs, the rule “is do not lie to yourself and call something great when it isn’t.”  Jobs will dump product design or development ideas that are not meeting the Apple standard of great and delay product introduction.

Apple’s design of their retail stores and technical support programs are, again, based on delighting the customer.  Microsoft does not control its distribution and its technical support is legendary – bad. Amazingly, many of the computer manufacturers that run Microsoft products have worked hard to match the dismal Microsoft customer service experience. 

While the specifics of Apple’s business model are not applicable to healthcare, their emphasis on delighting the customer and improving the customer experience certainly can and should be adopted by healthcare leaders.

Personal Disclosure:  My  less-than-a year-old Toshiba laptop with its Microsoft Outlook and Business Contact Manager program is now a very effective paper weight next to my MacBook Pro. 

 

© 2011 John Gregory Self

Seed Newsvine

Principles, Integrity and Our Enabling Bad Habits

Principles are important.  Integrity matters.

We were once a nation that admired our leaders in politics and in business – who stuck to their principles and who conducted themselves in an ethical manner. 

Here is where I – and many of you – get frustrated.  For too long, the majority of our political and business leaders have not been true to their principles. Let's not talk about integrity when it comes  to politics or Wall Street.

This week we saw the conviction of a billionaire hedge fund manager who clearly broke insider trading rules to make – not earn – even more money.  In government, members of Congress have known for a long time that this nation’s slide deeper into debt – with more than $53 trillion in unfunded liabilities – would one day spark an economic crisis unlike anything this nation has ever experienced. But for years, no one spoke with any conviction about making material reductions in spending. Both political parties were more focused on the next election cycle, not in coming to grips with this very dangerous addiction to deficit spending. It was easier, and more convenient the dire consequences notwithstanding, to simply kick the can down the street.

The chickens have come home to roost.  Next year, every penny of what U.S. residents pay in taxes – those 55 percent who actually pay anything at all – will go to fund entitlement programs and the interest on the debt.  The $1.65 trillion deficit spending for discretionary programs will simply be added to our long-term debt that is already $14,326.739.262.229 as of 1:55 AM GMT today.

No wonder our primary banker, China and several of the major fund managers, are nervous.  And you should be as well.

Now here is a bigger inconvenient truth: we are a population of enablers.  When fiscal responsibilities require that we give up a program, subsidy or benefit that impacts our lives – real or imagined– we are more likely to voice opposition with a wink of an eye or we chastise the politician who would dare cut a particular program that might be unpopular with their political base. We are enablers because while we drop phrases like “shared sacrifice” when we dish gossip at a cocktail party or church, sadly we no longer collectively understand the concept.

Over the next three to five years, many of these same politicians that we criticize today will be forced to make tough fiscal decisions that could save our nation, or send us into an irreversible not-so-slow, painful slide into the role of a debtor nation with the inevitable result that the U.S. will become a “second tier power”.  This is a very real possibility.

The key to our survival will be our ability to re-focus on those principles that made this nation great and support those political leaders who will do what is right with integrity, not necessarily what will endear them to their political base.  Finally we must be willing to passionately embrace shared sacrifice.

Forget about economic principles, the machinations of budgeting or government accounting.  Without our support of these three core principles, we will face a national financial calamity that will be more painful than anything we have known in modern history.  

© 2011 John Gregory Self

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An Adult Conversation and Other Comments

Random thoughts while wondering if the healthcare industry will take the lead on true cost-saving structural reform or, as usual, wait for someone else (a reluctant Congress)...

At midnight on Monday we either filed our taxes or filed an extension.  This epic annual event prompted a Financial Times columnist to observe that "the 1040 form is to financial planning what waterboarding is to asking a few questions."

The new political catch phrase in the non-stop rhetoric regarding our horrendous debt crisis is "have an adult conversation."  The new game in Washington, apparently, is to see which political party can out "adult" the other in their various public statements on this subject.

Meanwhile, Donald Trump is emerging as a "Tea Party" favorite for President. Conservative columnist David Brooks of the New York Time reported on Tuesday morning that in one poll "he is in (remote) striking distance in a head-to-head with President Obama."   Given some of Mr. Trump's statements of the past, that is a startling development.  Roger Simon of Politico reports today in the Daily Digest that Mr. Trump "... in 2006, when he was 59, (said) that his daughter, then 24, 'does have a very nice figure. I’ve said if Ivanka weren’t my daughter, perhaps I’d be dating her'.” Nice. Very adult.

Read more: http://www.politico.com/news/stories/0411/53377.html#ixzz1JyZFThks

Comedian Chris Rock was quoted by the Financial Times last week as saying that he would not vote for Mr. Trump.  "He will probably just find a better looking country and leave us."

If Mr. Trump wants to raise questions about the President's citizenship and birthplace, then I think it is only fair that he certify that the blonde "thing" perched atop his head is really hair, not a pet or the property one one of his ex-wives. (Former Speaker Newt Gingrich is, by comparison, looking more mainstream in the GOP family values department.)  

Back to his column, Mr. Brooks points out that in 2009 Mr. Trump published yet another inspirational book, Think Like A Champion, in which he praised President Obama's "amazing" and "phenomenal" accomplishments.  "Barack Obama proved that determination combined with opportunity and intelligence can make things happen  -- and in an exceptional way," Mr. Trump wrote.  Apparently semi-candidate Trump now is comfortable in saying that President Obama is "the worst President in American history," Mr. Brooks writes.

Mitt Romney, who is "exploring" whether he should do what everyone believes he is already doing -- run for the GOP presidential nomination -- continues to excoriate the Patient Protection and Affordable Care Act (PPACA) which is also remarkable since PPACA strongly resembles the plan he championed and signed into law while Governor of Massachusetts. 

Meanwhile, back at the budget debate, President Obama is firing away at the GOP budget plan that passed the House last week, suggesting that it was somehow unAmerican. I am not sure how the President will describe the terms of austerity that most assuredly will be imposed by the bond market in the event Democrats and Republicans cannot come to an agreement to extend the deficit limit. When one of your biggest bankers is China, the term unAmerican does have a certain ring to it...

There is good news.  The U.S. debt is only growing at the rate of $4.09 billion per day. This is down from $4.15 billion day from a couple of months ago, no doubt the result of all the adult conversations and austerity the Republican-controlled House is imposing.

Healthcare executives and physicians -- the adults who actually run health systems, hospitals, multi-secialty clinics and other health service providers -- are wondering how they will cope with significantly less money in year 10 of the GOP budget proposal.  That is when the voucher system will kick in with Americans paying the difference between what Medicare pays and the hospital charges.  It is only natural that they hope this crisis -- and the need to reduce Medicare spending -- will go away.  It won't.

The nice thing about "adult" conversations in the political arena:  when they are not filled with invective that can be absolutely ironic.

© 2011 John Gregory Self

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Taking Stock of Your Brand

Our professional brand is defined in two ways:  The first is by the decisions we make, the actions we take and how we conduct ourselves. The second way is by how others perceive what we do, say or how we act.  

In today's rough and tumble "new normal" economy in healthcare, executives who ignore the importance of professional brand management do so at their own peril.  

In the coming months and years, CEOs and members of their senior leadership will be forced to make tough choices as payors place more pressure on health systems, hospitals and physicians to improve their performance in the crucial areas of quality, safety and satisfaction at the same time that Congress considers additional funding cuts because of the country's serious national debt crisis. These two events will produce some tough sledding for us all.

When I think of the worsening economic/reimbursement storm, and the impact it will have on executives in far too many healthcare organizations, the title of Marshall Goldsmith's wonderfully instructive book comes to mind:  "What Got You Here, Won't Get You There."

The first step for a CEO or other senior leaders is to take stock of their current professional brand.  Begin by talking to your Personal Assistant.  Not only do they interact with you as much -- or more -- than anyone else except your spouse, but they usually are good listeners to the organization's informal news channels.  They are a treasure trove of information, both good and bad, regarding how you are perceived. (A cautionary note: if you are a CEO with a reputation as someone who hates to hear the truth, then do not expect much honesty from your colleagues. Reach out for a professional coach who can help you get a handle on this very important issue. There are some outstanding people in the field who can help you sort this out as well as plot a successful branding strategy going forward.)

An important hint: while you can get away with this kind of candid conversation with your PA without much advance warning -- she is probably used to it -- develop a plan for talking with members of your senior leadership team.  Be mindful that a sudden burst of self-reflection might ignite panic or a wave of rumor regarding your or THEIR future.  Take the time to explain what you are doing and why you are doing it.

If you truly want to succeed in developing a gold plated professional brand, do not immediately reject as misguided those criticisms that surprise or irritate you. It is infinitely easier to point out the problems with someone else's leadership style or performance than it is to take stock of our own areas for improvement. Dismissing that with which you disagree can be a big mistake.

This process can and probably will be uncomfortable.  When I get negative feedback about elements of a speech --an idea or construct that I particularly liked, it frustrates me.  Like many of you, I start looking for the push back button. I know that if I am going to move into the top tier as a professional speaker (FYI: I plan to keep my day job as an executive recruiter) I must be willing to examine the good, the bad and irritating critiques and force myself to rethink the issues in question.   

So must we all.  We can no longer take for granted the importance of our professional brand. We will all need a full reservoir of good will and support.

© 2011 John Gregory Self

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