HealthCare Voice

Career Management In Complicated Times

In a rapidly changing global economic environment with high long-term unemployment likely, regardless of who controls the levers of power in Washington, the value of career planning is in the spotlight. 

There are basically two schools of thought:

 1.  It is a waste of time.  No one can predict the future -- new technologies, business realignments and the resulting job losses, or opportunities that will emerge amidst the chaos.

 2. It is invaluable.  Career planning requires a sense of focus and discipline that is essential to navigate the opportunities and multiple pitfalls in the New Normal economy.

I vote for option number two.  I am not engaged in career coaching or outplacement businesses so I have nothing to gain from advocating for the value that is inherent in the career planning process.  In fact, I cannot imagine entering the workforce today without a plan for my professional life.

I freely admit that there are thousands upon thousands of stories of people who have enjoyed a rewarding, interesting, varied and prosperous career following what I call the opportunistic pathway; moving from job to job without knowing what new professional adventure next week, next month or next year will bring. But that was then and this is a competitive, unpredictable now.

As a matter of disclosure, I must that admit that I qualify for membership in the  “I Had No Plan Or Clue” class.  I began my career before I graduated from college, working for a daily newspaper.  From there, my career took me to Lubbock and Houston where I worked as an editor and writer.  I left the news business for public relations at Houston’s Hermann Hospital.  From there I became the first director of Life Flight, to the national marketing manager of the helicopter company, to acquisitions for an investor-owned hospital management company, back to Hermann to lead the start-up of a multi-hospital affiliated program, to a senior executive post responsible for business development for the hospital management company, to forming my own consulting firm, back to the town where I grew up to run home infusion pharmacy, correctional health businesses (not all at once), EMS, and then to be the general manager of an international nurse recruitment agency before leaving to form a recruiting firm and, finally, to forming my current executive search firm, JohnGSelf Associates, Inc.  And I did it all without a plan, an approach that I would not think about recommending in today.

My experiences – and my amazing luck – led me to the realization that career planning is no different than strategic planning for a business in which you are constantly adjusting strategy and tactics to address changing market threats and opportunities.

Career planning provides a framework for discipline and focus that will allow an individual to maximize their professional potential.

Is it a waste of time?  Not a chance. 

There are thousands upon thousands of people who trusted that everything would work out, professionally speaking.  It did not.

Not to sound glib, but luck is not a good career management strategy. 

© 2011 John Gregory Self

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Talent Academy Summit Focuses on Critical Issues for Healthcare HR Professionals

As the nation’s overwhelming debt crisis looms, and as the immediacy of healthcare reform’s reimbursement reductions come into focus, healthcare human resource executives are zeroing in on strategies to acquire and retain the best talent ahead of their competitors.  As they begin this battle for the best people, most understand that they will have to do more with less, no small feat when you consider the organization that captures the top talent will be the market winner.

Meeting in a talent management summit this week in Houston sponsored by Talent Management Academy, participants from San Diego to New York and Boston listened to presentations on a wide range of issues -- healthcare reform; the potential for a cataclysmic debt crisis that will force dramatic reductions in Medicare; recruiting; and  leadership development and the need for retaining the best talent. 

 Here are some important takeaways:

• Healthcare reform and the potential for a debt crisis that could severely cripple Medicare reimbursement rates making hiring and retaining top talent – now more than ever -- a strategic imperative
• More non-executive hiring is moving to cloud recruiting
• In-house recruitment databases that include features for automated candidate messaging and options that empower qualified candidates to schedule convenient interview times rather play telephone tag with a recruiter, are gaining traction
• Tracking top performing employees who leave the organization through an “alumni” web portal in the hopes they will achieve “boomerang” status – return to the fold – is but one strategy that some leading healthcare systems are implementing to enhance their talent brand and to double down on their commitment to recruit and retain the best possible people.  Consulting firms and non health-care corporations have been doing these things like this for years.  For hospitals and other service delivery providers, this strategy will be a talent management imperative
• Recruiting support firms are incorporating these types of connectivity features, integrating with comprehensive employee communications and onboarding programs

In a time when healthcare executives are fiercely scrutinizing costs in anticipation of severe reductions in payments from the government, this type of expensive investment seems counter-intuitive, but nothing could be further from the truth.  Many leaders in the field believe the longer that hospitals delay in developing best-in-class onboarding, recruiting and retention programs, the bigger disadvantage they will face in the area where it counts the most:  Finding and keeping the best, from the most highly skilled clinicians to the people who cook the food and clean the building.

© 2011 John Gregory Self

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Results or Reasons

"In life we can have results or reasons.  If you are not getting the results you want, your reasons are the lies you keep telling yourself."    

                          Harald Anders, "Be Realistic: Create a Miracle"

This applies to our careers, our performance, and our relationships.  

You can argue with this statement, Mr. Anderson wrote, "But it will be like wrestling with the wind, it will keep you busy, but you will not get anywhere."

A great friend, a genuinely nice man who I admire enormously, was frustrated by a sudden change of events. After a successful and principled tenure at a public hospital, he resigned over what he felt were troubling ethical governance issues. He went on to interview for other jobs, all without result. He was smart, intelligent and experienced. He had impressive recommendations --some of the best I have seen in my 16-plus year in executive search -- and a 25-plus year record of accomplishment in a branch of the armed forces medical service corps, however he recently decided to retire rather than endure any more unsuccessful executive searches.

When it was suggested that he hire a career coach to improve his interviewing skills my friend responded with pent up frustration, that he had been successfully advancing his career for all his professional life and did not see a need to change his style or approach at this stage of his career.  In other words, what worked in the past should apply today.

What a shame. What a loss for the hospital management industry. What my friend apparently did not consider was that his military career DID NOT prepare him for the rigors of the civilian market search process, including competitive interviewing.  

In dozens of interviews with former Army, Air Force and Navy healthcare professionals I learned that advancement in the military is based almost solely on past performance and relationships, not the actual interview with a new commanding officer. Former military officers say, almost without exception, that their success in advancing in the civilian market was due to two things: performance, and improving their interviewing skills.  

This rule also applies to executives who have risen in their careers through the civilian ranks. The rules of career management, including networking and interviewing skills, have changed dramatically over the past five to seven years. What worked for career advancement earlier in your career, probably will not be effective today. New interviewing techniques, web-based networking tools, search engines that collect and store information regarding your accomplishments or failures, and performance expectations come together to make this an entirely different game.   

In an increasingly difficult employment environment, with fewer jobs due to market consolidation and reductions in the number of leadership positions in anticipation of the impending cuts in Medicare funding, career/ personal brand management  -- exceptional performance, great presence, solid communication/interviewing skills and laser-like honesty regarding areas for self improvement -- will become indispensable qualities.  

Pushing back on this reality will only lead to early retirement or a new career. 

My friend did not see the need to make the change, but if he had, there is no doubt in my mind that he would have become an accomplished physician CEO. Do not let your ego or a stubborn streak allow others to shape your career.

That is a rule that applies to us all, not just to my friend.

"At the end of each day, you should play back the tapes of your performance. The results should either applaud you or prod you."         

                                                        -- Jim Rohn

© 2010 John Gregory Self

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HR Executives Say Keeping Employees Engaged, Retaining Top Talent, Job Stress Keep Them Up At Night

Human Resource executives say that the three biggest challenges they face are ensuring that employees are engaged and productive, retaining key talent as the economy recovers, and developing leaders.  More than two-thirds say job stress levels have increased, one-third say that stress is significant.

Controlling healthcare costs is another important challenge, they reported.

This information comes from a Human Resource Executive magazine survey of 802 readers who said that relentless downsizing has hurt the ability of organizations to meet their goals and objectives.

When asked what steps they would take over the next 12 months to boost employee retention, the HR executives said that they would increase employee communication, provide employees with additional training and development, and support employees with career development.  

One HR executive who said his company does not have the financial resources to invest in compensation benefits and pensions explained that his company is "showing people on an individual level how they are valued in the organization, and on a macro level, how they can help their organization make a difference in society."

© 2010 John Gregory Self

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Human Resource Career: Making A Meaningful Difference

I want to encourage healthcare management graduate students to explore Human Resources as a profession.  If you want to be different – I am talking about being different in a way that you can make a meaningful difference for the success of an organization – this is a leadership discipline where you can have a real impact. 

Human capital management is on the cusp of being the most essential part of the healthcare senior leadership team following finance. 

The only drawback is that I do not know how long it will take the cusp to become that essential part.  Currently, far too many human resource executives – from Chief Human Resource Officers, to Vice Presidents of HR and Directors of Personnel – are marginalized in terms of their role.  Far too many healthcare human resource professionals are buried in the organizational chart bureaucracy.  Far too few have a seat at the senior leadership table.  Fewer still are really taken that seriously. 

Several years ago, a CEO tried to make the argument that he was better served – politically and operationally – if HR did not report to him.  “There is just too much (controversy) and risk in dealing with the people issues, and I need the flexibility to make decisions regarding the best interest of the organization without worrying about the complications that invariably come when you deal with thorny people issues.” 

CEOs who are concerned about the impact of healthcare (read: payment) reform and a prolonged era of cuts in provider reimbursement should begin by building their business strategy around recruiting and retaining the best people.  They will not be able to do that without a top-tier human resource executive. 

The bad news is that there is a dearth of outstanding human resource executives in the healthcare industry, and given that healthcare leaders are traditionally loathe to go outside the industry for talent, that means that many healthcare organizations will not have access to the best and the brightest in the human capital field.

I want to encourage health system and hospital CEOs to overcome an industry-wide provincialism and recruit human resource executives from other industries.  Yes, I know there will be a learning curve, but if your organization is really committed to best-in-class human resource leadership and innovation, then your best bet may this approach.  For graduate students who decide to go into healthcare, consider a  HR residency or fellowship outside the healthcare industry.  It is a risk, I know, but I think there will be some enlightened hospital CEOs who will see enormous value in that approach and give you a chance.

As for that CEO who did not want HR reporting to him because he thought that it would give him more flexibility, he was right.  He now has a great deal of flexibility.

He is out of work.

© 2010 John Gregory Self

Building Bench Strength: Key to Success for Healthcare Operations

Building bench strength --assessment, investment and consistency -- is an important human capital strategy for healthcare organizations. It is a strategy that will be an important foundation for an organization's future success. Or survival.

The assessment piece is easy -- evaluating senior leaders, managers, and all those hourly workers who are the heart and soul of whether an organization is great or mediocre, successful, or on the road to crisis and failure. A CEO who is not engaged in this process, who is not familiar with top, middle and low performers is missing an important leverage point for success.

Investment is a little tougher to master. Far too many hospitals and other providers by thought, word and deed treat their human capital as an expense that is tangential to success. In a time of Medicare reductions, those we know about today and those we will learn about as this nation's debt crisis continues over the next 15 to 20 years, it is counterintuitive to make investments in leadership, management and performance development initiatives, especially if an organization has always skimped in the past.  Most human capital specialists who work in the healthcare arena argue that this is no longer a discretionary investment but essential spending.  

Consistency.  This is truly the hardest hurdle to overcome. CEOs who do not see talent acquisition and development as a critical part of their job struggle with this the most. They begin with great intentions but then slip back to duties and issues about which they are more comfortable, or  about which they believe are more critical to the success of day-to-day operations.  Changing innate patterns takes time, energy and a trusted coach.  Randy Guttenberger, CBA, a JGSA associate and founder of CEROS, an executive coaching and team building consultancy, says that CEOs must rewire how they look at their role as a leader, their priorities as well as the underlying beliefs that drive daily behavior. Building a great team is not something that just happens.  It takes a focused effort and a willingness to adjust core values regarding how CEOS view their jobs along with a willingness to delegate operational matters that other team members can easily handle.  

Developing bench strength is a more cost effective and less risky approach to meeting management or leadership needs.  This is not rocket science but you must be willing to assess, invest and then be the type of consistent leader who says -- and who is a true believer -- that people are an organization's most important asset.

© 2010 John Gregory Self

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Employees Shrug: 'Here We Go Again...'

Employees are smart, they are observant, and they possess a keen sensitivity to what their leaders say and do.  They can spot inconsistency a mile away.

Inconsistency -- in communications and in actions -- is the great enemy of leadership credibility.  In healthcare, the three areas where leaders suffer the most credibility damage are: 

1. Quality of care and patient safety
2. Employee relations
3. Customer service

In an effort to improve quality of care and patient safety -- huge problems that have yet to resonate with most politicians and opponents of healthcare reform -- the industry has spent billions of dollars on analysis, training, program design and ongoing assessment.  Hospitals have spent more than several million dollars printing signs and buttons with catchy slogans extolling the importance of quality care.  While some progress has been made, the improvements do not match the financial investment.  Every year thousands of patients die from preventable mistakes, or their hospital care is prolonged, due to serious hospital acquired infections.  

Why? 

Some leadership coaches that have looked at this issue argue that main problem is that the "campaign" to improve quality of care and patient safety has not been inculcated into an organization's cultural DNA. People are assigned to lead quality improvement but there is no C-suite passion. That is a common leadership failing.

Signs and buttons that proclaim "Quality Is The Most Important Thing" are translated by skeptical employees as "Quality Is The Most Important Slogan," according to Dr. Aubrey Daniels in his book "Bringing Out the Best in People."  In other words, if leaders do not consistently eat, sleep, and preach the importance of quality every day, in every possible communication, the industry will see marginal improvements but not to the extent that patients will be truly safe. The employees will see the inconsistency.  

The issues are similar for employee relations and customer service.  Opportunities are lost, money wasted, and bad will produced, because the performance of leaders does not match the performance they expect from their employees.  In far too many hospitals, leaders create campaigns with slogans.  New management initiatives are launched with great fanfare, but then employees pick up inconsistencies.  A Vice President trying to improve productivity or lower costs, can undercut the efforts by word or deed.  Harried nurses, with sicker patients, take short-cuts.  Pesky new priorities emerge as financial or market strategies change. Slowly but surely the focus is lost. The organization moves on. Years later boxes of buttons and signs are found in a remote storage room, and no one can remember the point. 

Employees have great radars.  They see the wheels coming off before anyone else. In far too many organizations, where the leaders develop tunnel vision for the latest crisis, the employees have perfected the shrug of resignation -- here we go again.  

© 2010 John Gregory Self 

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Hiding in Plain Sight

We pay too much attention to emergencies -- the big events -- in government, in cities, in business and in our careers.  We miss the subtle changes that drive real change.

That is how marketing consultant Seth Godin sees it. In a recent blog, Mr. Godin argues that most of society's institutions, businesses, even our careers can withstand external shocks and survive.

"No single technology destroyed the business model for newspapers...the writing has been on the wall for decades.  No single event demolished the music business.  It was a series of slow changes over the course of two decades, all the way back to the CD," he writes.

"Smoking killed far more people than terrorists, it just wasn't as dramatic."

One bad interview, one disaster meeting, a botched sales call or a terrible decision is not a game changer. "The sudden impact of one event isn't sufficient to change everything forever."

He argues that we should not worry as much about what happened last week or last month. We should stop focusing on today's hype -- the breaking news, the talking heads with their mixed bag of opinion regarding the dire consequences we face -- all of the noise.  Mr. Godin believes the frenzy of the here and now distracts us from what really matters.

"The glacial changes of years and decades are becoming more important, not less," he believes.  With advice that seems to challenge the conventional wisdom of any number of current management fads, Mr. Godin declares that we should "focus on what happened 10 years ago and think about what you can do that will make a huge impact in six months."

The subtle changes that will alter our lives -- our businesses and our careers -- are right in front of us, hiding in plain sight.

© John Gregory Self

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Interviewing Skills for the Employer

There have been dozens of articles and blogs written on the subject of interviewing skills but few focus on the needs of the employer.

Many organizations have good recruiting processes in place.  The problem occurs when the candidate arrives for a face-to-face interviews. 

Clients frequently ask me for "sample" questions that will help their team -- primarily department directors and managers -- to identify and hire the right candidate.  Many think interviewing is an innate skill.  It is not.  

There are two essential elements to effective interviewing:

1. Best-in-class recruiting system
2. Preparation

A best-in-class recruiting system is the cornerstone of any human capital management program. The importance of developing and consistently using such a system is a non-starter in any debate over why so many external candidates fail in their new jobs.  Organizations without an integrated recruiting system that is built on the principles in Onboarding cannot possibly be as effective as an organization whose talent acquisition is based on this standard.  This will directly affect the quality of candidates you are able to attract.

Preparation is equally important.  Productive interviews do not just happen.  They are the result of adequate preparation and coordination. Circulating the candidate's "interview package" to the team a day or two prior to the site interview is not that helpful if no one bothers to spend the time to get to know the background of the candidate and to think about the questions they would like to ask.  Some organizations -- albeit very few -- actually require that their interview teams meet the day before the candidate or candidates interview to assign areas of focus for each interviewer or interview.  Why?  To avoid duplication.  

Candidates report that more than 60 percent of the questions they are asked in a day-long interview session are the same or similar.  Virtually any candidate who can fog a mirror can nail the answer to a question the second or third time it has been asked in the same day.  More importantly, with that much overlap, you can bet there will be important details that are overlooked or skimmed over.  It takes time to get a candidate to explain in detail how they achieved on a project.  Wasting that valuable time on duplicate questions because there is little or no coordination is not productive.

Effective interviewing is not a subject that you frequently find in the  curriculum of the vast majority healthy systems and hospitals.  Maybe the lack of interviewing skills, particularly at the department director and management supervisory level is why it takes many organizations only one day to hire someone and another 365 days trying to get them out of the organization. Hiring the wrong person is a costly mistake.

Solving this problem will be "found money."  

^© John G. Self, 2010

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Relationships Are More Important Than Being Right When Onboarding

For emerging executives -- early careerists --Onboarding guru George Bradt's blog today at "Better Results Faster" is spot on.  

 As I interview young executives, I frequently hear them talk about the mistakes they made early in their careers when challenging the corporate conventional wisdom or those strategic decisions that seem wrong.  "Relationships Are More Important Than Being Right When Obboarding"  is a valuable read.  George provides a first-person illustration how young executives can respond.

A very important takeaway:  

"If the other person changes his or her mind, great.  If not, do it their way.  Any argument you win in your early days is likely to be a Pyrrhic victory.  Instead of trying to win, find ways to help others be right, get right or stay right."

Relationships are more Important than being Right when Onboarding.

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Creating Time While Onboarding

Onboarding is an important tool that will help organizations improve their recruiting, reduce the opportunity for talent failure -- a significant problem for many organizations -- and to accelerate and enhance performance of new hires, or newly promoted employees.

As health care enters another period of change, the human capital component of health systems, hospitals and other providers will become very important.  Organizations who recruit and retain the best people will thrive.  Those that do not place human capital as a front-and-center priority probably will not.

Because of the importance of Onboarding, I have been "re-blogging" some of George Bradt's thoughts on the subject.  For regular HealthCare Voice readers you know that he is the father of the term "Onboarding" and his firm, PrimeGenesis, is a leader in assisting executives prepare for new positions.  

George's contributions to this subject are immense and I value his thought leadership.  

Onboarding will be an important part of my presentation to West Virginia Hospital CEOs who are meeting next week in Glade Springs, West VA because it is a key differentiator between transactional recruiting -- the most common and ineffective type of recruiting in use today -- and transformational recruiting which is based on Onboarding principles.  Transformational recruiting is the future for talent acquisition.

Read More

Creating Time While Onboarding.

Mr. Self is the founder of JohnGSelf Associates, Inc., an executive search and advisory services firm in Dallas.  He has extensive experience in recruiting in Asia, Africa, the Middle East, and North America.  A highly rated speaker, Mr. Self has more than 30 years of healthcare experience, 16 years in executive search, and his record of talent selection is one of the best in the industry. 

He is the 2010 Regent Award winner as the senior healthcare leader of the year in North Texas, an honor bestowed by the American College of Healthcare Executives.

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WARNING FOR JOB SEEKERS: Beware of the Vultures

Times are tough.  The number of executives who remain out of work is staggering.  They are, understandably, concerned.   Some are scared.  Others are panicked.  You cannot blame them. Many people are at risk of losing everything they have worked a lifetime to accumulate.

Working from posh offices, Vultures posing as career counselors and coaches are luring  out-of-work executives with phony job interviews.  It is a scam.   Here is how it works:   The executive receives a call from a "Gina" or "Jan" -- personable and engaging assistants -- telling the out-of-work executive that their name surfaced in research and that the Senior Vice President or the Partner would like to interview them for a top-paying job that seems to fit their profile perfectly.   When the executive arrives, he receives a little career insight about his resume or experience but, in the end, the meeting turns into a  full-court press to have them sign up for job placement -- usually for a fee ranging from $5,000 to $6,500 as was the case last week in Houston.  These people call themselves coaches, career counselors or some other catchy current title of the month but what they really do is take people's money and produce very little in return.

These "career coaches" have been at this "game" for a long time, and they are good at it.  They are not to be confused with the thousands of outplacement counselors and career coaches -- certified or not -- who provide a legitimate service with real value.  No, these people work for franchises of a company that traces its history back to the late 194os and which, for many years, provided a legitimate service, for a fee, to people who were looking for a job.  However, along the way, some investors and executives with questionable pasts, hijacked the concept and they are hurting desperate executives and the reputations of honorable career consultants.

They justify their fees by saying that their "secret database" costs more than $200,00 a year to maintain.  Some even suggest they know about jobs that no one else knows about, prompting one career counseling victim to call it "the phantom job market."  In another case, an information technology manager, skilled in managing software developers, was told by "Gina" that they were calling about a great job with Hewlett Packard.  They set up a screening interview with the Senior Vice President of the counseling company  for the next day and the unsuspecting candidate walked in to a high pressured sales pitch to pay $5,500 to get access to HP's job.  If the candidate had only searched the HP website, he would have seen a description for a position that sounded almost exactly the same.  They even encourage candidates who are strapped for cash to borrow from their children, relatives or friends.

If you fall for the pitch and sign their contract, there is little anyone can or will do to help you get your money back.  The contracts are virtually airtight, one state attorney general said.  Some agreements even have non-disclosure clauses that preclude the duped job seeker from disclosing any of the company's information.  

How do they get the candidate names?   The Vultures, like legitimate recruiters, use job boards to find their targets which suggests that candidates should think twice about posting their career information in hopes of landing a job.  What they are really inviting are telemarketing calls and email spammers.

So, if you hear from "Gina," "Jan," or some other assistant -- they are usually women -- with a friendly personality, slow down and start asking questions:

• Ask how did you got your name
• Ask for specifics about the position:  location, salary range and scope of responsibility, for example.  If it is a legitimate recruiter, the person making the call should be able to validate that it is a real job.  If they cannot, then why waste your time?
• Ask for information about the company the caller represents -- its history or whether they are a search firm or a career counseling operation.  The latter is perhaps the biggest indicator of a sales pitch in the making

Outplacement consultants are paid by the employer and it is almost always a component of the severance package.  It is better to find one who is industry specific.  Legitimate executive or career coaches  are not necessarily experts at helping candidates find a job.  If you are out of work, and you feel the panic building,  fight the temptation to want to believe some salesman's glib pitch.  If you cannot find a colleague in your sector who has heard of, or been contacted by "Jan" or "Gina," or has heard of the organization's name, then, as my grandmother used to say:  "If it sounds too good to be true, it probably is."

For all those legitimate counselors and coaches, pay attention.   Your industry's reputation is being tarnished by skunks who prey on people's fears and vulnerabilities.  

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Co-Creation: Market Research, Market Adaptation and Customer Service At Its Best

Co-Creation is a not a new term.  The idea has been around for a long time under different terms.  The most frequently used phrase seems to be a partnering relationship.  Personally, I like “Co-Creation” because it is more specific in its definition and intent.

University of Michigan Ross School of Business Professors and strategy thought leaders C K Prahalad and Venkat Ramaswamy first publicly introduced the concept to the world of business in their 2000 Harvard Business Review article, “Co-Opting Customer Competence.”  “Value will be increasingly co-created by the firm and the customer”, they argued in their Harvard Business School Press book The Future of Competition, “rather than being created entirely inside the firm.”  “Co-creation in their view not only describes a trend of jointly creating products, it also describes a movement away from customers buying products and services as transactions, to those purchases being made as part of an experience,” according to one review.

I would add to their definition by positing that Co-Creation is more than a strategy or marketing slogan to replace the term “partnering relationship.”  It is a business philosophy and a leadership way-of- life that requires time and hard work. 

Co-Creation is market research, market adaptation, and customer service at its best.  

Co-Creation is not a phrase you can tack up on the wall for your employees or on your website and win greater market share.  It is a new framework for doing business.  To start down what will be a new way of managing has its risks.  Asking for client participation – their time and effort necessary for effective collaboration – and then repeatedly failing to act is akin to a high-speed expressway to client conflict and dissatisfaction. 

 If you doubt that, let me provide an analogous example of what will happen if you fail to follow through:  just repeatedly ask your spouse for his or her advice, and then appear – repeatedly – to ignore it.  There will be what I like to call “noisy consequences.”

 In our quest at JohnGSelf Associates to practice transformational executive search, we are adopting Co-Creation as a way of life.  For a small firm that is working to break out of the crowd, we know this approach has its risks.  The time it takes to ensure that there is a beneficial relationship between our company and our clients is not insignificant.  But, we believe that in this new healthcare economy, it is the right approach.  

John G. Self is President of JohnGSelf Associates, Inc.in Dallas.  The Firm provides  comprehensive high-touch executive search and talent advisory services to clients from Hawaii across the U.S. mainland and Canada. You can contact John at 214.573.5095, or [email protected]

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A Cautionary Tale for Healthcare Leaders: GM's $48 Billion Talent Strategy Mistake

In his book Why Smart Executives Fail, Sydney Finkelstein provides an excellent example of what can happen to a company when they forget that, in the end, it is employees who will make the difference between success and failure.

Healthcare providers, in the throes of evaluating their strategic options in the face of increasing competition and impending healthcare reform, must look at their employees – particularly executives and managers – to determine whether they have the right people to deal with the consequential changes.  They must examine whether the skills of their team match up with the demands of new strategy.  Do the executives and managers have the depth of experience to succeed if, for example, you require them to be more entrepreneurial in how they grow revenue?

A spectacular strategic misstep at General Motors more than 25 years ago provides an excellent example of what happens when you focus on strategy and not the people.

In the 1980s, Roger Smith, GM’s Chairman and Chief Executive Officer, was frustrated,  Finkelstein wrote.  He faced two thorns in his side:

“First, low-cost, high quality Japanese imports were starting to gain a foothold in the U.S. Market.

“Second, GM’s labor relations were horrible.  What to do? The questions Mr. Smith asked aren't hard to reconstruct.  What was the biggest expense on GM’s balance sheet?  Workers.  Who prevented increased operation speeds by threatening to strike? Workers. Who made the production line errors that resulted in defective cars?  Workers.  Who made life difficult for managers by refusing to do what they were told?  Workers.”

“Bold, brilliant in its simplicity and, in retrospect, more than a little loony,” Smith's solution was to solve all of his problems at once by eliminating his workers.  Robots could work night-and-day with no wages, no complaints, no strikes, and no worker errors.

But there was a fatal flaw in this if it sounds too good to be true, it probably is strategy to turn back the Japanese auto invasion and return GM to global dominance.  Instead of installing the lean manufacturing techniques that made the use of robotics more effective and, to this day still defines how Toyota operates, GM’s senior team focused on the idea that robots would make their life easier and profits more robust.  This obsession with machines over people led to what manufacturing engineer Charles McElyea described as “automated confusion” and fueled GM’s spectacular demise which ended in 2009 with a humiliating government bailout and forced bankruptcy just to stay in business.

When you leave people out of the strategy equation, you are in effect pouring gas onto fires of failure. 

The question for healthcare leaders who are facing a critical point in our industry’s future is whether they match the demands of their market and the strategies necessary to survive with the skills of their workforce.  Mr. Smith learned a $45 billion lesson.  He focused on a strategy, not the real problems that threatened his organization.

Far too many healthcare organizations are traditional top-down, command-and-control operations.  That management approach does not foster strong middle managers, and market conditions that require rapid response to strategic shifts, will have significant financial and clinical consequences. 

As healthcare organizations review their strategic options, the Chief Executive and Chief Human Resource Officers need to plan for an enterprise-wide systematic evaluation of the strengths, weaknesses and skills of the existing team – from the executive office to shift supervisors to determine whether they can adapt.

This cannot be a one-time exercise.  It should become, at a minimum, an integral part of the organization's quarterly operations review.  While the dashboard data is important, if you focus only on those metrics you will miss equally key indicators of your future success or failure.

 Our team is in the business of designing processes to evaluate executives and managers.  We can take your existing system and convert it to an enterprise-wide program faster, better and at less cost than the average health system, hospital or large physician group practice. 

GM’s Mr. Smith lost focus.  It was an expensive lesson.  During the time that automation was touted as THE ANSWER to all their corporate woes, production costs actually increased.  For the $45 billion he invested in automation in hopes of defeating the Japanese invasion, GM could have bought both Toyota and Nissan, according to one analysis.  

 John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners.  He is a Co-Founder of the Firm.  

With more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

John is a highly rated speaker on inspirational leadership, career brand management and the future of healthcare in America. To learn more about his presentations, you can reach him at JohnMarch Partners.

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Employees Are 70 Percent of Net Worth

Your employees are 70 percent of your organization’s net worth.

Gary S. Becker, a Nobel laureate in economics, estimates that 70 percent of a company’s challenges are met successfully by its human capital – the men and women we call employees.

Without employees – the human capital -- you have nothing at all, including net worth.

To maximize the effectiveness of human capital, organizations should consider developing strategies that specifically address this mission-critical solution to success.  In a knowledge-based economy with its dynamic challenges – especially those facing healthcare organizations – the quality and value of human capital can easily add (or subtract) from an organization’s net worth.  For that reason alone, CEOs should structure their human resources department as a strategic business partner for the executive team.

 Talent Mapping, an ongoing component of a corporation’s Total Onboarding Program (TOP), is an essential process to ensure that an organization maximizes the economic contribution of its employees.  Talent Mapping is a multi-faceted process.  For the purpose of this post, let’s simplify the definition.  Talent Mapping is essentially a process for performance criteria in concert with an organization’s strategic plan and then distinguishes between high-potential, high performing and low-performing employees.  It is NOT to be confused with the vast majority of annual employee evaluations that have become more about “merit” raises and less a systematic approach to assess and elevate the performance of departments and entire divisions.

 Far too many organizations focus enormous resources, time and energy in reviewing monthly and quarterly data, ranging from financial reports, performance metrics and other so-called dashboard-driven reporting as well as new product or service plans and capital requirements.  Remarkably, I would argue that is more than just a little ironic that many organizations fail to invest a similar amount of time and effort  -- for some even one-tenth of the time --  to a formal periodic review of human capital.  All this investment would ensure is that executives, managers, and supervisors receive the benefit of a regular performance review of their accomplishments, contributions, developmental needs and potential for advancement. 

 This breakdown or failure is all the more amazing when you realize that the most successful companies in the world have this type of program in place.  Implementing Talent Mapping will ensure improved performance in productivity and financial returns.

 Talent Mapping’s focus on developing supervisors and managers for promotion is all the more important when you consider the recruiting industry’s dismal overall performance:  40 percent of candidates recruited from outside an organization are forced out, are fired, or quit within the first 18 months, according to several recruitment industry studies, including one of 20,000 senior level executives.  The cost of that level of turnover alone is staggeringly high and is, without question, an unnecessary drain on profits. So why do so many health systems, hospitals and other companies put up with it?

 There are signs that they want to change.  More and more, healthcare organizations are using phrases like “becoming the employer of choice” and that their employees “are our most important asset.” 

 Organizations that seek to become the employer of choice for their industry or market – to treat their employees a mission-critical asset -- are easily identified by the following human capital components:

• Total Onboarding Program
• Best-in-industry recruiting practices 
• Talent Mapping that rewards high performers, strengthens teams and boosts morale

 While there are signs that some healthcare organizations realize that their future success hinges almost solely on their human capital, most are still trapped in the emphasis on short-term financial reporting.  They are focusing more on the upfront costs of these initiatives and less on the extraordinarily high long-term return on investment in the organization’s human capital through a multifaceted approach to supporting their success. 

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners.  He is a Co-Founder of the Firm.  

 A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

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Goodness and virtue are traits that are much admired in life. Unfortunately, these two words are not commonly included in modern business speak. Some might argue that in the world of business the words goodness and virtue are mutually exclusive when you contrast them with terms like execution, accountability and results. 

Actually, I believe these words – goodness, virtue, execution, accountability, and results come together to form five pillars of leadership that will serve healthcare chief executives well in the challenging and often tense times that will characterize the next decade. 

These five pillars support leadership authenticity. 

 The holiday season is a time of reflection. As we gather with families, friends and colleagues to celebrate, what better time to think about our relationships with our employees and their families and our customers -- our physicians and their patients, and the communities we serve. To find success in the next decade, healthcare leaders will have to raise the performance bar, our own and of those who work with us. 

We face many challenges, including probable draconian reductions in reimbursement and new massive cost shifting. These will be exceptionally demanding times, but in the end, success or failure for our organizations will turn on the quality of our people and an organization’s ability to attract and retain the best talent in the market. Execution will be critical but that, too, will rest with the employees (which pool will increasingly include hospital employed physicians) and whether they believe they are treated fairly and are appreciated. 

Goodness and virtue are qualities that may sound out of place in running a complex health system, but they are critical. 

 Happy Holidays and best wishes for a prosperous and rewarding New Year.

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As I travel across the Midwest and East Coast, healthcare leaders are talking cautiously about the future of healthcare and what the patient care delivery system will look like in the next decade.  These are thoughtful leaders who understand that continued growth in the cost of healthcare will produce huge unfunded liabilities.  They know that the federal government will continue to cut spending – Medicare provider payments – and that they must be prepared to reduce their operating between five and 10 percent of current Medicare payment rates.

 

While the economy is improving, the underlying challenges facing healthcare executives remain.  There may be improvements in economic indicators, but healthcare CEOs will face another year of uncertainty.  This uncertainty will contribute to continued inaction for many organizations.

 

There is evidence that large providers like HCA, Tenet, Life Point, and Community Health and many of the nation’s largest not-for-profit community healthcare systems and hospitals realize that the current hospital business model will change.  They see the writing on the wall and they are already responding strategically and financially. 

 

One telling strategy development is the accelerating trend of employing physicians.  This is not the first time health systems and hospitals have skipped down this strategic pathway.  The decade of the 1980s brought the notion that system integration was the golden key to the pathway of success.  Some corporate executives who had successfully run hospital companies felt they could successfully roll up physician practices into a large corporation, and improve profitability through improved efficiencies and enhanced managed care contracting.  The results were, for the most part, catastrophically bad.  With one or two exceptions, most of the roll up physician practice companies failed, and hospital systems consistently lost about $100,000 to $150,000 per employed physician.  The take away from this expensive experiment is that running a physician practice and a hospital are NOT the same thing.  Those lessons, if well learned, will determine whether this time around we get it right. 

 

The big companies and systems are well organized and are recruiting for employment physicians from hospitalists to family practice.  They understand there will be a serious physician shortage and they are moving ahead of the wave.  They are investing significant capital to get ahead of the curve, industry analysts say.

 

The move to physician employment, hospital CEOs agree, reflects a broader challenge:  an across-the-board war for talent in every market.   

 

That is why an organization’s recruiting brand – how they recruit and relate with employees at all levels – is so important.  It is why onboarding with gold-plated recruiting processes will be more important than ever in the new decade.

 

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A respected management consultant shared the story of a new employee who was quickly hired and placed in a mission-critical position on a team that was historically one of the best in the company.  New business drove management to beef up the organization to ensure client service deliverables were met.  There was just one problem.  The new employee’s performance was dismal. 

Deadlines were missed.  The quality of the team’s work product slipped as morale plummeted.  The team was confused and angry because senior management seemed to tolerate the new employee’s unacceptable performance.  His poor interpersonal communication skills, his inability to achieve basic objectives and meet critical deadlines so frustrated this once smooth running group that when that employee was escorted from the work area for termination, everyone stood and applauded.

What had gone wrong was clear to the other team members.  Management had hired the wrong person.  That they did not consult with the group before they decided to recruit and only peripherally included them in the recruitment process made matters worse in the minds of the team.  There was a sense of urgency by management to make a hire but there was no authenticity in the process.  In the end, management’s reputation took a beating and the team’s behavior in celebrating the new employee’s termination was regrettable.

Authenticity, truthfulness that is based on facts, is an essential element in recruiting both for the companies seeking to achieve the coveted reputation of employer of choice in a market and for candidates.

For the employer, authenticity is the bedrock mission, vision, and values foundation of who they are as a company, how they operate and, most importantly, how they treat candidates and employees.  Authenticity is the foundation upon which the recruiting brand is constructed.  One reason so many candidates leave in the first year – up to 50 percent, according to some employment studies – is because the job or the company was not as advertised by internal recruiters or external search consultants.  For companies seeking to be an employer of choice, this is not a track record or reputation that they want or can afford.  CEOs must insist their talent acquisition brand be above reproach.

Candidates must be measured by the same standards of authenticity.  Their representations – prior work history and performance accomplishments – must be equally authentic.  Candidates in transition who are battling financial fears or outright desperation are more likely to enhance their career performance through resume embellishment.  Companies that seek to be best-of-the-best in a given industry or market not only must be authentic with their own representations and behavior, they must utilize pre-employment screening processes that will identify the top performers and eliminate those who are not up to the challenge, for whatever reason. 

You cannot cut corners.  From the initial resume review and screening interview, to the more in-depth face-to-face encounters, the recruiter and interview team must be probing to determine the authenticity of the candidate and his or her prior performance.  Past performance remains the best predictor of future actions. 

Ensuring authenticity takes time and discipline.  A company that is willing to cut corners in its quest to hire the best talent based on time or financial constraints is not going to be an employer of choice.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners.  He is a
Co-Founder of the Firm.  

 A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

 John is a highly rated speaker on inspirational leadership, talent acquisition, career brand management and the future of healthcare in America.  To contact Mr. Self regarding a speaking date, contact him at JohnMarch Partners.

You can contact Mr. Self at 214.220.1234 or [email protected].  

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Most things in the world of healthcare process improvement are difficult to fix. Not your Recruiting Brand.

It can be honed and refined easily and cost effectively. Yet companies frequently ignore it or push it down to the “when we get to it” category.

Enhancing your company’s recruiting brand does not necessarily mean you will get and keep the best talent. But it is the ticket to get in the game. Liken it to a graduate management degree which can become the key to achieving an executive level career. A well-defined brand also boosts the ability to address a costly and chronic problem when recruiting candidates from outside the organization: tenure.

Poor tenure is a perennial recruitment problem and a significant hidden cost. Recent studies show that the candidates recruited from outside an organization on average, about 18 months. This includes professional staff, department managers, and directors, to the executive office. The best way to mitigate this risk when recruiting externally is to create a best-in-industry recruiting process that is integrated with your enterprise-wide onboarding program.

Even though the recruiting process is not terribly complex, there are multiple levels and steps, and there are multiple chances for defects to develop and to miss opportunities.

There are key questions that I ask a CEO to determine whether he can recruit and retain the best people in a talent war. These questions are just one part of our three-day human capital assessment. Our questions include:

1. Do you have a written Recruitment Brand Statement? Does your team know what it is? More importantly, do your in-house recruiters know what it is?
2. How many candidate inquiries are generated by the organization’s web site, newspapers, internal recruiter telephone sourcing, contingent recruiters, etc.?
3. Do all candidates receive acknowledgement of their interest in the organization?
4. Do all candidates receive an email, telephone call, or letter if they are not selected?
5. Do you have established candidate screening and interview processes and schedules for each step and each position/category?
6. Do your recruiters report process or exception defects?
7. Do you have written profiles for each position that you provide to qualified candidates? Do the profiles include mission, vision and values statements, performance expectations, cultural profile, compliance statements, reporting relationships, etc?
8. Does your web site provide for on-line applications, automated candidate responses, access for search engine sweeps (to distribute job postings to a larger pool of candidates)
9. Do your recruiters know who the names of local or regional candidates they would target when vacancies occur in mission critical positions? Do you track ideal candidates in your recruiting database?
10. Do you have an onboarding program versus employee orientation? Does your onboarding program begin before your recruitment program is launched? Are your onboarding and your recruiting programs fully integrated?

The overarching question is this: Do you want to eliminate one of the largest hidden costs on your hospital’s financial statement?

Develop and implement a measurable recruiting program that includes an effective onboarding process. In turn, you’ll have less reliance on external recruiters, higher quality candidates, and a lower turnover rate.

If you have questions, don’t hesitate to call on me. We can help you improve your recruiting brand and reduce your costs.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

John is a highly rated speaker on inspirational leadership, career brand management and the future of healthcare in America. To contact Mr. Self regarding a speaking date, contact him at JohnMarch Partners.

You can contact Mr. Self at 214.220.1234 or [email protected]. He is an active member of LinkedIn and a frequent editorial contributor. You can also connect with John through his Facebook profile.

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Some healthcare organizations are now exploring the outsourcing recruiting/staffing option. This should not be confused with popular department management service contracts, most commonly used for pharmacy, information technology, housekeeping, and dietary that have been used for years. No, I am talking about the option of outsourcing all recruiting functions.

Sue Kamrad, RN, FACHE, one of the bright thinkers on clinical staffing who ran a large medical center's internal staffing company which significantly improved "door-to-beside" times and accelerated productivity, has been pushing me on this issue. She is a staffing thought leader who contends that nursing shortages will become so critical that hospitals may turn to outsourcing companies to meet demand and reduce costs. She is a true believer who contends this model can effectively manage costs and build value. The nursing shortage projections certainly support her thesis.

Outsourcing recruiting can, in fact, help reduce costs. The rationale is that through outsourcing one can take advantage of the economies of scale and synergies of having access to a larger, more experienced recruiting staff than one hospital could normally afford.

The theory makes sense. It has been applied successfully in other industrial sectors for years. While there have been mixed results in healthcare, the potential for savings is prompting health systems, hospitals and large home care providers, for example, to take a closer look.

In building an outsourcing agreement, healthcare providers should ensure that the contract is based on realistic performance expectations, and that the outsourcing recruitment teams have extensive healthcare experience. The contractor’s on-site coordinators who interact with the hospital on a daily basis must be excellent project managers and have exemplary customer service skills. There will be service and performance issues. The on-site coordinators should be able to address most of these challenges. These coordinators are critical to the success of the contract, and the client should be involved in their selection.

The corporate executives at the outsourcing company should be experienced in delivering exceptional outsourcing recruitment results, especially in healthcare or similar highly technical fields. They must understand the difference between just a “fill” and a “hire,” typical staffing terms, versus the goal of hiring the “right” employee who will deliver long-term value for a specific client organization. You would think this would be clear, but with a focus on meeting service performance metrics, the outsourcing provider can easily slip into the numbers trap: the number of vacant positions as well as the time and cost it takes to hire.

How the outsourcing company operates and how a healthcare organization structures the contract is critical. For example, if the outsourcing company incentivizes their recruiters strictly on the basis of a time-to-hire and the vacancy rate metric, or if the healthcare organization insists on tough but unreasonable performance standards, there is the very real risk that the law of unintended consequences will be a factor: rushed hires. Those rarely last.

Regardless of which recruiting structure you select – in-house teams or an outsourcing company -- it is important to establish reasonable performance and service expectations. While the aforementioned time-to-hire, cost-per-hire and the vacancy rate are all important measures, those metrics must be linked to other quality hire standards: the turnover rate over three, six, nine and 12-month periods, clinical or operational performance, and employee satisfaction.

I advise clients to include an assessment of how well each new employee integrates with his or her colleagues and, above all else, the quarterly performance of the hire.

While some health systems and hospitals are looking at outsourcing, many more are planning to bring more of the recruitment function, including executive search, in-house. There is no one right answer. However, it is vital to initiate careful strategic and tactical planning, performance standards that balance and reward quality hires, as well as a reasonable plan for implementation. Approaching talent acquisition in this manner will enable healthcare organizations to drive down costs while building value.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

John is a highly rated speaker on inspirational leadership, career brand management and the future of healthcare in America. To contact Mr. Self regarding a speaking date, contact him at JohnMarch Partners.

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A highly regarded healthcare strategist told me this week that in the not too distant future hospitals must be able operate with a “Medicare Minus” expense structure to survive. That means adjusting operating costs for services to a range of three to five percent below the amount Medicare pays for a case, he said.

As Baby Boomers flood into the Medicare program, many hospitals will see Medicare become a significant, if not dominant, part of their overall reimbursement. These are the same Baby Boomers, with their private health insurance plans, that now provide most healthcare organizations their operating margins.

Whether that prediction is accurate is up for debate. What is not debatable is that the federal government, facing staggering unfunded liabilities for the Medicare program, will be forced to cut payments to hospitals. Ironically, hospitals that are expanding capacity to meet an expected surge in admissions from aging Baby Boomers must also be wary of how lower Medicare payments will affect their ability to repay the debts.

Today, these trends and predictions do not qualify as a near-term game-changing event, but you get a sense of why increasing numbers of health systems, hospitals and other providers, are beginning to look at their operating expenses, and, in particular, the money they spend on consultants. Remember the recent USA Today report – that each of the nation’s 5,700 hospitals must cut $2.6 million a year in expenses for 10 years to achieve savings necessary to pay for the President’s proposed healthcare reform. Even if the reform initiative dies yet again, the $37 trillion in unfunded Medicare liabilities is the real driver of change here, not Congress.

Over the past several weeks, as I have talked to executives from health systems, hospitals, allied health companies, and consulting organizations about healthcare reform and market trends, I am hearing some interesting ideas on how consulting, recruiting and other professional service firms need to change.

What I am hearing is that this focus on cutting costs that consultants are writing off to the bad economy, is here to stay. With increasing regularity hospital leaders are saying that the golden era for fat consulting fees and open-ended project expense budgets is over. Gone.

One major university medical center reported that they would significantly reduce the number of executive searches they award to outside firms. This report is not the exception. In Texas, major health systems are “going inside” with executive and management recruitment, staffing services, and talent development resources because they can achieve significant cost savings.

One executive reported that he believes his internal recruiting team has produced better panels of candidates. One Texas system reported that five years ago they used search firms eight or 10 times. Today that organization has all but eliminated the use of outside recruiters. I have found similar examples of this approach in healthcare organizations in Florida, Ohio, Pennsylvania, New Jersey, and Illinois; from the east coast to California and the northwest, larger systems have or will enact similar plans. This trend will only grow as these early adopters validate their expense reduction assumptions.

This does not mean that professional service firms are doomed for eventual extinction. Nothing could be further from the truth. Companies that can deliver services that produce measurable results in performance improvement, enhancements in quality of care and patient safety, and more efficient management information systems, for example, will continue to thrive. However, this changing economic climate does mean that these companies, must be creative in how they organize, price and deliver these services.

1. Off-the-shelf consulting templates executed by junior consultants are out. In are customized solutions that are implementable and produce sustainable value.

2. Out are one-size-fits-all executive search engagements. In is unbundling and services designed to support hospitals that reduce their reliance on third-party providers.

The traditional executive search model has been around for 55 years and there are some very clear signs that changes are in the air. In a little noticed Business Week article in January, the CEO of global search consultants Heidrick & Struggles predicted that annual revenue would shift from 95 percent from traditional executive search services to 50 percent. He is cutting costs, moving his firm into new service lines, and repositioning the company as a leadership advisory organization. He predicted that the largest losses in the executive search space will come, not from the high end CEO and board recruitment projects, but the lower echelon – in the $300,000 range and below, precisely in the space where the majority of healthcare assignments originate.

3. Out are contingency recruiters that are fee, not value driven. Some hospitals will pay 23-to 30 percent of a candidate’s first-year salary to a recruiter who does little more than provide a resume. In are recruiters who will accept lower fees to provide candidate sourcing services to augment internal resources.

4. Out is the tendency to use multiple recruiters. In will be the firms that can legitimately provide recruiting support from the C-Suite to the Director level, allowing hospitals to focus on price and quality for the services they receive.

These are unsettling times for everyone. Hospital leaders are certainly not thrilled with significant cuts in reimbursement that they know are coming over the next 15 years. They know that ultimately it is Medicare that represents the biggest problem with the U.S. deficit. They know they must reduce their operating expenses.

What healthcare leaders need today are not “business-as-usual” consultants, but creative business partners who will help them reduce costs and improve value.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch</strong>. He is an active member of Linked In and a frequent editorial contributor.

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A valued CEO colleague and friend recently shared an amazing story. A multi-specialty clinic that is located adjacent to his 140-bed community hospital had recruited more than 40 physicians over the past ten years, an impressive number given the rural nature of the community.

Unfortunately, 30 of the 40 left the practice and the community. Others are on the verge of calling the moving van.

The reasons for the turnover are among the top 10 in the annals of dysfunctional physician recruitment: a compensation plan that clearly favored the senior partners whose productivity was slowing as they enjoyed their status, a misdistribution of Medicaid and uncompensated patients to the new recruits, and an arrogant managing partner who refused to listen to reasonable advice from the hospital’s leadership team, all the while bullying his partners into silence.

The clinic’s leaders were only too glad to take the hospital’s help when it came to providing hundreds of thousands of dollars in net-income guarantees and relocation assistance, but when it came to listening to the counsel of the hospital’s leadership team regarding strategies for eliminating or dramatically reducing the turnover, well, the managing partner was not interested. In fact, you might say they were downright rude.

What a shame. The hospital no longer is willing to underwrite the cost of recruiting for what could have been a powerhouse multi-specialty clinic. They are building their own group despite the angry protests from the clinic board that the hospital is engaging in unfair competition. The clinic’s senior partners, who seem to know everything they needed to know about management, clearly had not thought this issue through.

I am betting they never bothered to calculate their financial losses from such a horrendous turnover: more than $10 million down the drain.

That loss must be one of those hidden expenses that seem to drive up the costs of healthcare.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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This post is the final installment in a series of columns on Onboarding, the process of acquiring, accommodating, assimilating, and accelerating new team members, whether they work within the organization or, in the case of physicians in private practice, are independent contractors. Today’s question is why would a health system or hospital invest in onboarding a physician they recruited for private practice?

There is obviously a host of reasons. For the purpose of this column, let’s focus on the obvious: that it makes economic sense. We are entering a healthcare era of increasing competition where the battle for talented physicians is intense and shortages are a reality. This competition will produce a new range of expensive challenges for health systems and hospitals that could affect market position or even their very survival.

While some hospital executives struggle with the question regarding who their customer really is – the physician or the patient – for the time being, we need to cut this debate short.

It is the physician. Occasionally the patient, but primarily most admissions come from physicians who are members of the active medical staff. Yes, these same physician customers can be our competitors, frequently in the same day. The physicians become our competitors when they actually admit patients to the specialty hospital, or ambulatory care or imaging center in which they have invested and realistically expect a distribution of profits versus the dreaded cash call.

This changing physician/customer landscape is frustrating for hospital CEOs. Hospital leaders seeking to solidify their physician relationships should focus on the physician’s underlying need – to improve financial security for their families and to enhance the quality of their medical practice experience.

While it is not realistic to assume that all of the physicians you recruit will forever resist the investor-owned lure of promises of higher profits and a more efficient work environment, CEOs are beginning to realize that an effective onboarding program – backed by a real commitment to a physician/customer-centered business model – will mitigate the risks. Like executive or employee onboarding programs, a physician program should not be a one-day, one-time experience. The first day should include a review of the hospital’s strategy, including their medical staff development plan, and a review of the organization’s mission, vision and values in terms of how those elements of the organization’s culture are integrated into all levels of the organization on a day-to-day operations and decision making. Meetings with key members of the leadership and management team with whom the physician will interact on an ongoing basis can be another productive part of a first-day schedule. Lunch with the Chiefs of Service and Medical Executive Committee who will emphasize the organization’s focus on quality and safety, and a special end-of-the-day dinner with key physicians, executives, and wives is a nice way to complete the first day of what should be an ongoing, relationship-centered process.

All physicians – but especially new recruits – should be assigned to a member of the executive leadership team who will take ownership of the relationship, much like bank officers nurture customer relationships.

Physicians, especially younger physicians and those who are starting out in practice are typically not equipped with necessary business skills. They do not always understand the importance of banking relationships. Practice and human capital management are generally not included in the pre-med degree plan and certainly is not part of the medical school curriculum. My 33 years of healthcare leadership experience has shown that the wizened physician practice veterans do not always take the time to coach the new recruits. In one rural group practice that has recruited 40 physicians over the past 10 years, more than 75 percent of the doctors who were recruited to the community at great expense have left the organization and the community, as the result of a strong non-compete provision in the employment contract.

Like executive and employee onboarding, a similar program tailored to the needs of your new physicians is an important strategy to maximize their community benefit and eliminate costly turnover.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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Onboarding is a new human capital management program that is rapidly gaining popularity with business leaders in all sectors who really understand that their employees are their most important asset.

What is onboarding? For most human resource executives the term is self explanatory. For the purpose of this column, a formal definition is in order. Believe it or not, Wikipedia explained the concept in a succinct manner without the typical consultant jargon common among those who want you to buy their onboarding program.

“Onboarding is the process of acquiring, accommodating, assimilating and accelerating new team members, whether they come from outside or inside the organization. The prerequisite to successful onboarding is getting your organization aligned around the need and the role.” For more information, visit Amazon and review, “Onboarding, How To Get Your Employees Up To Speed In Half The Time,” by George Bradt and Mary Vonnegut.

If the definition of executive search is the process of getting married after four or five dates, and truth be told that is exactly what candidates say the recruitment process is like, then why would an organization spend thousands or hundreds of thousands of dollars on recruiting a key executive or manager without giving much thought to onboarding the individual into the organization to accelerate their contributions and to ensure a long and successful tenure?

If the cost of a miss-hire is conservatively estimated to be between 50 to 200 times annual salary, depending on title and scope of responsibility, why would an organization just throw together a new employee orientation program that is frequently more about signing paperwork with an uninspiring Power Point presentation describing benefits, rules and regulations – this is how you get fired here -- blandly delivered by an HR assistant, not an engaging program designed to get employees up to speed while learning about their new professional home?

In a blog on the four deadliest sins of onboarding programs, author/blogger/consultant David Lee quotes Rex Castle a senior executive with a Lubbock, TX bank:

“…you sign and sign more paper than you would if you were buying a house, and then you walk out thinking, ‘Man, I hope I don’t get fired, but at least I know how to get fired’.”

Onboarding programs are still skeptically viewed by some organizations as an unnecessary expense. It would be safe to bet that these are the very organizations which apply the same level of financial analysis to the equally important management development programs. Executives who believe that – who allow that point of view to rule in their organizations -- are destined for significant challenges unless they can change the culture.
So this begs three big and a very important questions:

1. If employees – now defined as human capital in the world of consultant speak – are our most important resource, why do we play Russian Roulette with the sizeable investment we make in recruiting them to our organizations?

2. Why aren’t more healthcare organizations investing in gold-plated onboarding programs to ensure success and reduce costly turnover?

3. Why is any of this important at a time when the public seems more concerned with government spending and the overall cost of healthcare, not whether a particular institution invests in its people?

Well, let’s start with the escalating costs of healthcare and the increasing number of stories about the inefficiencies of hospitals and the incredible waste that exists in far too many of our top-tier medical centers. While no one knows for sure what the economics of healthcare reform will be, it is a very safe bet that the federal government will make additional Draconian cuts in Medicare payments to hospitals. Hospitals will be forced to dramatically cut costs and redesign processes. Ironically, this will lead to an increase in turnover within the executive suite which is an important reason for organizations to develop an effective onboarding program.

There are so many areas in a hospital where expenses can be cut. One area that is frequently ignored is the money spent on miss-hires and employee turnover. For many larger hospitals, this is a HUGE number. For example, if your RN turnover is 60 nurses in a year, the cost is conservatively estimated to be around $2.7 million. Conservatively. If the turnover includes key clinical personnel in the OR or ICU, that number WILL be higher. If you botch a mission-critical executive hire, with a base salary of $300,000, human capital experts conservatively estimate the cost of this mistake to be between $500,000 and $ 1 million. In the case of a recent CEO termination at a health system, the cost to the healthy system was estimated to be more than $4 million, including lost opportunity time and the losses the now departed CEO piled up with questionable judgment and poor execution. That number is still being counted and could easily top $5 million before all is said and done.

Onboarding may be an expense, but it is an expense that the well managed healthcare system can ill afford to do without.

Thankfully, onboarding is moving front and center in the human capital business.

Over the next week, I plan to write about onboarding – when it starts, how it should be structured within the organization and how healthcare organizations should measure its success.

I hope you will share your thoughts.

This is an important concept to master. Effective leaders cannot afford to be on autopilot on this one.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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DALLAS (July 30, 2009) - We are the middle of a deep recession. The staggering job losses – and the rising unemployment rate – seem to be in direct conflict with this factoid: hospitals need RNs. This issue may have fallen from public view, but healthcare organizations know that this is a real problem – today and for the future.

Cheryl Clark, one of HealthLeaders Media’s excellent writers, reports today negative trends that may surprise those who are not involved with patient care on a day-to-day basis.

“By next year, more than half of the nation's registered nurses will be over age 50 and many will be considering retirement.

“Surveys reveal that 116,000 registered nurse positions are now unfilled in U.S hospitals; another 100,000 job vacancies exist in nursing homes. Although the recession has caused some nurses to delay retirement, the aging demographic means an increasing demand for nurses looms, and may outpace the supply of nursing school graduates.”

Ms. Clark reports that it cost more than $36,000 to replace a departing RN. Other industry staffing specialists say that cost can be more than $50,000 when you include the cost of recruitment. Highly specialized nurses in areas where the shortage is more profound, the replacement costs may approach $75,000. These so-called “soft” costs can, in reality significantly impact an organization’s bottom line.
Hospitals have dealt with this challenge for years. However, many are now investing in creative retention strategies to address the looming crisis that, in fact, has been looming for so long, no one can remember when we weren’t concerned.

What are your thoughts? What is your organization doing to reduce the rate of turnover AND improving the professional satisfaction for your RNs?

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch.

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The Five Pillars of Leadership Authenticity

Goodness and virtue are traits that are much admired in life. Unfortunately, these two words are not commonly included in modern business speak. Some might argue that in the world of business the words goodness and virtue are mutually exclusive when you contrast them with terms like execution, accountability and results. 

Actually, I believe these words – goodness, virtue, execution, accountability, and results come together to form five pillars of leadership that will serve healthcare chief executives well in the challenging and often tense times that will characterize the next decade. 

These five pillars support leadership authenticity. 

 The holiday season is a time of reflection. As we gather with families, friends and colleagues to celebrate, what better time to think about our relationships with our employees and their families and our customers -- our physicians and their patients, and the communities we serve. To find success in the next decade, healthcare leaders will have to raise the performance bar, our own and of those who work with us. 

We face many challenges, including probable draconian reductions in reimbursement and new massive cost shifting. These will be exceptionally demanding times, but in the end, success or failure for our organizations will turn on the quality of our people and an organization’s ability to attract and retain the best talent in the market. Execution will be critical but that, too, will rest with the employees (which pool will increasingly include hospital employed physicians) and whether they believe they are treated fairly and are appreciated. 

Goodness and virtue are qualities that may sound out of place in running a complex health system, but they are critical. 

 Happy Holidays and best wishes for a prosperous and rewarding New Year.

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Employing Doctors: Smart Strategy for Next Decade?

As I travel across the Midwest and East Coast, healthcare leaders are talking cautiously about the future of healthcare and what the patient care delivery system will look like in the next decade.  These are thoughtful leaders who understand that continued growth in the cost of healthcare will produce huge unfunded liabilities.  They know that the federal government will continue to cut spending – Medicare provider payments – and that they must be prepared to reduce their operating between five and 10 percent of current Medicare payment rates.

 

While the economy is improving, the underlying challenges facing healthcare executives remain.  There may be improvements in economic indicators, but healthcare CEOs will face another year of uncertainty.  This uncertainty will contribute to continued inaction for many organizations.

 

There is evidence that large providers like HCA, Tenet, Life Point, and Community Health and many of the nation’s largest not-for-profit community healthcare systems and hospitals realize that the current hospital business model will change.  They see the writing on the wall and they are already responding strategically and financially. 

 

One telling strategy development is the accelerating trend of employing physicians.  This is not the first time health systems and hospitals have skipped down this strategic pathway.  The decade of the 1980s brought the notion that system integration was the golden key to the pathway of success.  Some corporate executives who had successfully run hospital companies felt they could successfully roll up physician practices into a large corporation, and improve profitability through improved efficiencies and enhanced managed care contracting.  The results were, for the most part, catastrophically bad.  With one or two exceptions, most of the roll up physician practice companies failed, and hospital systems consistently lost about $100,000 to $150,000 per employed physician.  The take away from this expensive experiment is that running a physician practice and a hospital are NOT the same thing.  Those lessons, if well learned, will determine whether this time around we get it right. 

 

The big companies and systems are well organized and are recruiting for employment physicians from hospitalists to family practice.  They understand there will be a serious physician shortage and they are moving ahead of the wave.  They are investing significant capital to get ahead of the curve, industry analysts say.

 

The move to physician employment, hospital CEOs agree, reflects a broader challenge:  an across-the-board war for talent in every market.   

 

That is why an organization’s recruiting brand – how they recruit and relate with employees at all levels – is so important.  It is why onboarding with gold-plated recruiting processes will be more important than ever in the new decade.

 

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Authenticity in Recruitment Critical for Employers, Candidates

A respected management consultant shared the story of a new employee who was quickly hired and placed in a mission-critical position on a team that was historically one of the best in the company.  New business drove management to beef up the organization to ensure client service deliverables were met.  There was just one problem.  The new employee’s performance was dismal. 

Deadlines were missed.  The quality of the team’s work product slipped as morale plummeted.  The team was confused and angry because senior management seemed to tolerate the new employee’s unacceptable performance.  His poor interpersonal communication skills, his inability to achieve basic objectives and meet critical deadlines so frustrated this once smooth running group that when that employee was escorted from the work area for termination, everyone stood and applauded.

What had gone wrong was clear to the other team members.  Management had hired the wrong person.  That they did not consult with the group before they decided to recruit and only peripherally included them in the recruitment process made matters worse in the minds of the team.  There was a sense of urgency by management to make a hire but there was no authenticity in the process.  In the end, management’s reputation took a beating and the team’s behavior in celebrating the new employee’s termination was regrettable.

Authenticity, truthfulness that is based on facts, is an essential element in recruiting both for the companies seeking to achieve the coveted reputation of employer of choice in a market and for candidates.

For the employer, authenticity is the bedrock mission, vision, and values foundation of who they are as a company, how they operate and, most importantly, how they treat candidates and employees.  Authenticity is the foundation upon which the recruiting brand is constructed.  One reason so many candidates leave in the first year – up to 50 percent, according to some employment studies – is because the job or the company was not as advertised by internal recruiters or external search consultants.  For companies seeking to be an employer of choice, this is not a track record or reputation that they want or can afford.  CEOs must insist their talent acquisition brand be above reproach.

Candidates must be measured by the same standards of authenticity.  Their representations – prior work history and performance accomplishments – must be equally authentic.  Candidates in transition who are battling financial fears or outright desperation are more likely to enhance their career performance through resume embellishment.  Companies that seek to be best-of-the-best in a given industry or market not only must be authentic with their own representations and behavior, they must utilize pre-employment screening processes that will identify the top performers and eliminate those who are not up to the challenge, for whatever reason. 

You cannot cut corners.  From the initial resume review and screening interview, to the more in-depth face-to-face encounters, the recruiter and interview team must be probing to determine the authenticity of the candidate and his or her prior performance.  Past performance remains the best predictor of future actions. 

Ensuring authenticity takes time and discipline.  A company that is willing to cut corners in its quest to hire the best talent based on time or financial constraints is not going to be an employer of choice.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners.  He is a
Co-Founder of the Firm.  

 A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

 John is a highly rated speaker on inspirational leadership, talent acquisition, career brand management and the future of healthcare in America.  To contact Mr. Self regarding a speaking date, contact him at JohnMarch Partners.

You can contact Mr. Self at 214.220.1234 or [email protected].  

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Improving, Repairing Recruiting Brand Can Yield Big Returns

Most things in the world of healthcare process improvement are difficult to fix. Not your Recruiting Brand.

It can be honed and refined easily and cost effectively. Yet companies frequently ignore it or push it down to the “when we get to it” category.

Enhancing your company’s recruiting brand does not necessarily mean you will get and keep the best talent. But it is the ticket to get in the game. Liken it to a graduate management degree which can become the key to achieving an executive level career. A well-defined brand also boosts the ability to address a costly and chronic problem when recruiting candidates from outside the organization: tenure.

Poor tenure is a perennial recruitment problem and a significant hidden cost. Recent studies show that the candidates recruited from outside an organization on average, about 18 months. This includes professional staff, department managers, and directors, to the executive office. The best way to mitigate this risk when recruiting externally is to create a best-in-industry recruiting process that is integrated with your enterprise-wide onboarding program.

Even though the recruiting process is not terribly complex, there are multiple levels and steps, and there are multiple chances for defects to develop and to miss opportunities.

There are key questions that I ask a CEO to determine whether he can recruit and retain the best people in a talent war. These questions are just one part of our three-day human capital assessment. Our questions include:

1. Do you have a written Recruitment Brand Statement? Does your team know what it is? More importantly, do your in-house recruiters know what it is?
2. How many candidate inquiries are generated by the organization’s web site, newspapers, internal recruiter telephone sourcing, contingent recruiters, etc.?
3. Do all candidates receive acknowledgement of their interest in the organization?
4. Do all candidates receive an email, telephone call, or letter if they are not selected?
5. Do you have established candidate screening and interview processes and schedules for each step and each position/category?
6. Do your recruiters report process or exception defects?
7. Do you have written profiles for each position that you provide to qualified candidates? Do the profiles include mission, vision and values statements, performance expectations, cultural profile, compliance statements, reporting relationships, etc?
8. Does your web site provide for on-line applications, automated candidate responses, access for search engine sweeps (to distribute job postings to a larger pool of candidates)
9. Do your recruiters know who the names of local or regional candidates they would target when vacancies occur in mission critical positions? Do you track ideal candidates in your recruiting database?
10. Do you have an onboarding program versus employee orientation? Does your onboarding program begin before your recruitment program is launched? Are your onboarding and your recruiting programs fully integrated?

The overarching question is this: Do you want to eliminate one of the largest hidden costs on your hospital’s financial statement?

Develop and implement a measurable recruiting program that includes an effective onboarding process. In turn, you’ll have less reliance on external recruiters, higher quality candidates, and a lower turnover rate.

If you have questions, don’t hesitate to call on me. We can help you improve your recruiting brand and reduce your costs.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

John is a highly rated speaker on inspirational leadership, career brand management and the future of healthcare in America. To contact Mr. Self regarding a speaking date, contact him at JohnMarch Partners.

You can contact Mr. Self at 214.220.1234 or [email protected]. He is an active member of LinkedIn and a frequent editorial contributor. You can also connect with John through his Facebook profile.

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To Outsource or Not Outsource Recruiting: Important Considerations

Some healthcare organizations are now exploring the outsourcing recruiting/staffing option. This should not be confused with popular department management service contracts, most commonly used for pharmacy, information technology, housekeeping, and dietary that have been used for years. No, I am talking about the option of outsourcing all recruiting functions.

Sue Kamrad, RN, FACHE, one of the bright thinkers on clinical staffing who ran a large medical center's internal staffing company which significantly improved "door-to-beside" times and accelerated productivity, has been pushing me on this issue. She is a staffing thought leader who contends that nursing shortages will become so critical that hospitals may turn to outsourcing companies to meet demand and reduce costs. She is a true believer who contends this model can effectively manage costs and build value. The nursing shortage projections certainly support her thesis.

Outsourcing recruiting can, in fact, help reduce costs. The rationale is that through outsourcing one can take advantage of the economies of scale and synergies of having access to a larger, more experienced recruiting staff than one hospital could normally afford.

The theory makes sense. It has been applied successfully in other industrial sectors for years. While there have been mixed results in healthcare, the potential for savings is prompting health systems, hospitals and large home care providers, for example, to take a closer look.

In building an outsourcing agreement, healthcare providers should ensure that the contract is based on realistic performance expectations, and that the outsourcing recruitment teams have extensive healthcare experience. The contractor’s on-site coordinators who interact with the hospital on a daily basis must be excellent project managers and have exemplary customer service skills. There will be service and performance issues. The on-site coordinators should be able to address most of these challenges. These coordinators are critical to the success of the contract, and the client should be involved in their selection.

The corporate executives at the outsourcing company should be experienced in delivering exceptional outsourcing recruitment results, especially in healthcare or similar highly technical fields. They must understand the difference between just a “fill” and a “hire,” typical staffing terms, versus the goal of hiring the “right” employee who will deliver long-term value for a specific client organization. You would think this would be clear, but with a focus on meeting service performance metrics, the outsourcing provider can easily slip into the numbers trap: the number of vacant positions as well as the time and cost it takes to hire.

How the outsourcing company operates and how a healthcare organization structures the contract is critical. For example, if the outsourcing company incentivizes their recruiters strictly on the basis of a time-to-hire and the vacancy rate metric, or if the healthcare organization insists on tough but unreasonable performance standards, there is the very real risk that the law of unintended consequences will be a factor: rushed hires. Those rarely last.

Regardless of which recruiting structure you select – in-house teams or an outsourcing company -- it is important to establish reasonable performance and service expectations. While the aforementioned time-to-hire, cost-per-hire and the vacancy rate are all important measures, those metrics must be linked to other quality hire standards: the turnover rate over three, six, nine and 12-month periods, clinical or operational performance, and employee satisfaction.

I advise clients to include an assessment of how well each new employee integrates with his or her colleagues and, above all else, the quarterly performance of the hire.

While some health systems and hospitals are looking at outsourcing, many more are planning to bring more of the recruitment function, including executive search, in-house. There is no one right answer. However, it is vital to initiate careful strategic and tactical planning, performance standards that balance and reward quality hires, as well as a reasonable plan for implementation. Approaching talent acquisition in this manner will enable healthcare organizations to drive down costs while building value.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

John is a highly rated speaker on inspirational leadership, career brand management and the future of healthcare in America. To contact Mr. Self regarding a speaking date, contact him at JohnMarch Partners.

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HEALTHCARE'S INCONVENIENT TRUTH: Medicare's Shocking Deficit Creates Opportunity For Innovation

A highly regarded healthcare strategist told me this week that in the not too distant future hospitals must be able operate with a “Medicare Minus” expense structure to survive. That means adjusting operating costs for services to a range of three to five percent below the amount Medicare pays for a case, he said.

As Baby Boomers flood into the Medicare program, many hospitals will see Medicare become a significant, if not dominant, part of their overall reimbursement. These are the same Baby Boomers, with their private health insurance plans, that now provide most healthcare organizations their operating margins.

Whether that prediction is accurate is up for debate. What is not debatable is that the federal government, facing staggering unfunded liabilities for the Medicare program, will be forced to cut payments to hospitals. Ironically, hospitals that are expanding capacity to meet an expected surge in admissions from aging Baby Boomers must also be wary of how lower Medicare payments will affect their ability to repay the debts.

Today, these trends and predictions do not qualify as a near-term game-changing event, but you get a sense of why increasing numbers of health systems, hospitals and other providers, are beginning to look at their operating expenses, and, in particular, the money they spend on consultants. Remember the recent USA Today report – that each of the nation’s 5,700 hospitals must cut $2.6 million a year in expenses for 10 years to achieve savings necessary to pay for the President’s proposed healthcare reform. Even if the reform initiative dies yet again, the $37 trillion in unfunded Medicare liabilities is the real driver of change here, not Congress.

Over the past several weeks, as I have talked to executives from health systems, hospitals, allied health companies, and consulting organizations about healthcare reform and market trends, I am hearing some interesting ideas on how consulting, recruiting and other professional service firms need to change.

What I am hearing is that this focus on cutting costs that consultants are writing off to the bad economy, is here to stay. With increasing regularity hospital leaders are saying that the golden era for fat consulting fees and open-ended project expense budgets is over. Gone.

One major university medical center reported that they would significantly reduce the number of executive searches they award to outside firms. This report is not the exception. In Texas, major health systems are “going inside” with executive and management recruitment, staffing services, and talent development resources because they can achieve significant cost savings.

One executive reported that he believes his internal recruiting team has produced better panels of candidates. One Texas system reported that five years ago they used search firms eight or 10 times. Today that organization has all but eliminated the use of outside recruiters. I have found similar examples of this approach in healthcare organizations in Florida, Ohio, Pennsylvania, New Jersey, and Illinois; from the east coast to California and the northwest, larger systems have or will enact similar plans. This trend will only grow as these early adopters validate their expense reduction assumptions.

This does not mean that professional service firms are doomed for eventual extinction. Nothing could be further from the truth. Companies that can deliver services that produce measurable results in performance improvement, enhancements in quality of care and patient safety, and more efficient management information systems, for example, will continue to thrive. However, this changing economic climate does mean that these companies, must be creative in how they organize, price and deliver these services.

1. Off-the-shelf consulting templates executed by junior consultants are out. In are customized solutions that are implementable and produce sustainable value.

2. Out are one-size-fits-all executive search engagements. In is unbundling and services designed to support hospitals that reduce their reliance on third-party providers.

The traditional executive search model has been around for 55 years and there are some very clear signs that changes are in the air. In a little noticed Business Week article in January, the CEO of global search consultants Heidrick & Struggles predicted that annual revenue would shift from 95 percent from traditional executive search services to 50 percent. He is cutting costs, moving his firm into new service lines, and repositioning the company as a leadership advisory organization. He predicted that the largest losses in the executive search space will come, not from the high end CEO and board recruitment projects, but the lower echelon – in the $300,000 range and below, precisely in the space where the majority of healthcare assignments originate.

3. Out are contingency recruiters that are fee, not value driven. Some hospitals will pay 23-to 30 percent of a candidate’s first-year salary to a recruiter who does little more than provide a resume. In are recruiters who will accept lower fees to provide candidate sourcing services to augment internal resources.

4. Out is the tendency to use multiple recruiters. In will be the firms that can legitimately provide recruiting support from the C-Suite to the Director level, allowing hospitals to focus on price and quality for the services they receive.

These are unsettling times for everyone. Hospital leaders are certainly not thrilled with significant cuts in reimbursement that they know are coming over the next 15 years. They know that ultimately it is Medicare that represents the biggest problem with the U.S. deficit. They know they must reduce their operating expenses.

What healthcare leaders need today are not “business-as-usual” consultants, but creative business partners who will help them reduce costs and improve value.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch</strong>. He is an active member of Linked In and a frequent editorial contributor.

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Dysfunctional Recruiting, Clinic Management Adds To Healthcare Costs

A valued CEO colleague and friend recently shared an amazing story. A multi-specialty clinic that is located adjacent to his 140-bed community hospital had recruited more than 40 physicians over the past ten years, an impressive number given the rural nature of the community.

Unfortunately, 30 of the 40 left the practice and the community. Others are on the verge of calling the moving van.

The reasons for the turnover are among the top 10 in the annals of dysfunctional physician recruitment: a compensation plan that clearly favored the senior partners whose productivity was slowing as they enjoyed their status, a misdistribution of Medicaid and uncompensated patients to the new recruits, and an arrogant managing partner who refused to listen to reasonable advice from the hospital’s leadership team, all the while bullying his partners into silence.

The clinic’s leaders were only too glad to take the hospital’s help when it came to providing hundreds of thousands of dollars in net-income guarantees and relocation assistance, but when it came to listening to the counsel of the hospital’s leadership team regarding strategies for eliminating or dramatically reducing the turnover, well, the managing partner was not interested. In fact, you might say they were downright rude.

What a shame. The hospital no longer is willing to underwrite the cost of recruiting for what could have been a powerhouse multi-specialty clinic. They are building their own group despite the angry protests from the clinic board that the hospital is engaging in unfair competition. The clinic’s senior partners, who seem to know everything they needed to know about management, clearly had not thought this issue through.

I am betting they never bothered to calculate their financial losses from such a horrendous turnover: more than $10 million down the drain.

That loss must be one of those hidden expenses that seem to drive up the costs of healthcare.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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Onboarding For Physicians: An Overlooked Opportunity

This post is the final installment in a series of columns on Onboarding, the process of acquiring, accommodating, assimilating, and accelerating new team members, whether they work within the organization or, in the case of physicians in private practice, are independent contractors. Today’s question is why would a health system or hospital invest in onboarding a physician they recruited for private practice?

There is obviously a host of reasons. For the purpose of this column, let’s focus on the obvious: that it makes economic sense. We are entering a healthcare era of increasing competition where the battle for talented physicians is intense and shortages are a reality. This competition will produce a new range of expensive challenges for health systems and hospitals that could affect market position or even their very survival.

While some hospital executives struggle with the question regarding who their customer really is – the physician or the patient – for the time being, we need to cut this debate short.

It is the physician. Occasionally the patient, but primarily most admissions come from physicians who are members of the active medical staff. Yes, these same physician customers can be our competitors, frequently in the same day. The physicians become our competitors when they actually admit patients to the specialty hospital, or ambulatory care or imaging center in which they have invested and realistically expect a distribution of profits versus the dreaded cash call.

This changing physician/customer landscape is frustrating for hospital CEOs. Hospital leaders seeking to solidify their physician relationships should focus on the physician’s underlying need – to improve financial security for their families and to enhance the quality of their medical practice experience.

While it is not realistic to assume that all of the physicians you recruit will forever resist the investor-owned lure of promises of higher profits and a more efficient work environment, CEOs are beginning to realize that an effective onboarding program – backed by a real commitment to a physician/customer-centered business model – will mitigate the risks. Like executive or employee onboarding programs, a physician program should not be a one-day, one-time experience. The first day should include a review of the hospital’s strategy, including their medical staff development plan, and a review of the organization’s mission, vision and values in terms of how those elements of the organization’s culture are integrated into all levels of the organization on a day-to-day operations and decision making. Meetings with key members of the leadership and management team with whom the physician will interact on an ongoing basis can be another productive part of a first-day schedule. Lunch with the Chiefs of Service and Medical Executive Committee who will emphasize the organization’s focus on quality and safety, and a special end-of-the-day dinner with key physicians, executives, and wives is a nice way to complete the first day of what should be an ongoing, relationship-centered process.

All physicians – but especially new recruits – should be assigned to a member of the executive leadership team who will take ownership of the relationship, much like bank officers nurture customer relationships.

Physicians, especially younger physicians and those who are starting out in practice are typically not equipped with necessary business skills. They do not always understand the importance of banking relationships. Practice and human capital management are generally not included in the pre-med degree plan and certainly is not part of the medical school curriculum. My 33 years of healthcare leadership experience has shown that the wizened physician practice veterans do not always take the time to coach the new recruits. In one rural group practice that has recruited 40 physicians over the past 10 years, more than 75 percent of the doctors who were recruited to the community at great expense have left the organization and the community, as the result of a strong non-compete provision in the employment contract.

Like executive and employee onboarding, a similar program tailored to the needs of your new physicians is an important strategy to maximize their community benefit and eliminate costly turnover.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm.

A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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ONBOARDING: An Essential Program For Winning Organizations

Onboarding is a new human capital management program that is rapidly gaining popularity with business leaders in all sectors who really understand that their employees are their most important asset.

What is onboarding? For most human resource executives the term is self explanatory. For the purpose of this column, a formal definition is in order. Believe it or not, Wikipedia explained the concept in a succinct manner without the typical consultant jargon common among those who want you to buy their onboarding program.

“Onboarding is the process of acquiring, accommodating, assimilating and accelerating new team members, whether they come from outside or inside the organization. The prerequisite to successful onboarding is getting your organization aligned around the need and the role.” For more information, visit Amazon and review, “Onboarding, How To Get Your Employees Up To Speed In Half The Time,” by George Bradt and Mary Vonnegut.

If the definition of executive search is the process of getting married after four or five dates, and truth be told that is exactly what candidates say the recruitment process is like, then why would an organization spend thousands or hundreds of thousands of dollars on recruiting a key executive or manager without giving much thought to onboarding the individual into the organization to accelerate their contributions and to ensure a long and successful tenure?

If the cost of a miss-hire is conservatively estimated to be between 50 to 200 times annual salary, depending on title and scope of responsibility, why would an organization just throw together a new employee orientation program that is frequently more about signing paperwork with an uninspiring Power Point presentation describing benefits, rules and regulations – this is how you get fired here -- blandly delivered by an HR assistant, not an engaging program designed to get employees up to speed while learning about their new professional home?

In a blog on the four deadliest sins of onboarding programs, author/blogger/consultant David Lee quotes Rex Castle a senior executive with a Lubbock, TX bank:

“…you sign and sign more paper than you would if you were buying a house, and then you walk out thinking, ‘Man, I hope I don’t get fired, but at least I know how to get fired’.”

Onboarding programs are still skeptically viewed by some organizations as an unnecessary expense. It would be safe to bet that these are the very organizations which apply the same level of financial analysis to the equally important management development programs. Executives who believe that – who allow that point of view to rule in their organizations -- are destined for significant challenges unless they can change the culture.
So this begs three big and a very important questions:

1. If employees – now defined as human capital in the world of consultant speak – are our most important resource, why do we play Russian Roulette with the sizeable investment we make in recruiting them to our organizations?

2. Why aren’t more healthcare organizations investing in gold-plated onboarding programs to ensure success and reduce costly turnover?

3. Why is any of this important at a time when the public seems more concerned with government spending and the overall cost of healthcare, not whether a particular institution invests in its people?

Well, let’s start with the escalating costs of healthcare and the increasing number of stories about the inefficiencies of hospitals and the incredible waste that exists in far too many of our top-tier medical centers. While no one knows for sure what the economics of healthcare reform will be, it is a very safe bet that the federal government will make additional Draconian cuts in Medicare payments to hospitals. Hospitals will be forced to dramatically cut costs and redesign processes. Ironically, this will lead to an increase in turnover within the executive suite which is an important reason for organizations to develop an effective onboarding program.

There are so many areas in a hospital where expenses can be cut. One area that is frequently ignored is the money spent on miss-hires and employee turnover. For many larger hospitals, this is a HUGE number. For example, if your RN turnover is 60 nurses in a year, the cost is conservatively estimated to be around $2.7 million. Conservatively. If the turnover includes key clinical personnel in the OR or ICU, that number WILL be higher. If you botch a mission-critical executive hire, with a base salary of $300,000, human capital experts conservatively estimate the cost of this mistake to be between $500,000 and $ 1 million. In the case of a recent CEO termination at a health system, the cost to the healthy system was estimated to be more than $4 million, including lost opportunity time and the losses the now departed CEO piled up with questionable judgment and poor execution. That number is still being counted and could easily top $5 million before all is said and done.

Onboarding may be an expense, but it is an expense that the well managed healthcare system can ill afford to do without.

Thankfully, onboarding is moving front and center in the human capital business.

Over the next week, I plan to write about onboarding – when it starts, how it should be structured within the organization and how healthcare organizations should measure its success.

I hope you will share your thoughts.

This is an important concept to master. Effective leaders cannot afford to be on autopilot on this one.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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Recession Be Damned: RN Shortage Looms, Hospitals Scramble

DALLAS (July 30, 2009) - We are the middle of a deep recession. The staggering job losses – and the rising unemployment rate – seem to be in direct conflict with this factoid: hospitals need RNs. This issue may have fallen from public view, but healthcare organizations know that this is a real problem – today and for the future.

Cheryl Clark, one of HealthLeaders Media’s excellent writers, reports today negative trends that may surprise those who are not involved with patient care on a day-to-day basis.

“By next year, more than half of the nation's registered nurses will be over age 50 and many will be considering retirement.

“Surveys reveal that 116,000 registered nurse positions are now unfilled in U.S hospitals; another 100,000 job vacancies exist in nursing homes. Although the recession has caused some nurses to delay retirement, the aging demographic means an increasing demand for nurses looms, and may outpace the supply of nursing school graduates.”

Ms. Clark reports that it cost more than $36,000 to replace a departing RN. Other industry staffing specialists say that cost can be more than $50,000 when you include the cost of recruitment. Highly specialized nurses in areas where the shortage is more profound, the replacement costs may approach $75,000. These so-called “soft” costs can, in reality significantly impact an organization’s bottom line.
Hospitals have dealt with this challenge for years. However, many are now investing in creative retention strategies to address the looming crisis that, in fact, has been looming for so long, no one can remember when we weren’t concerned.

What are your thoughts? What is your organization doing to reduce the rate of turnover AND improving the professional satisfaction for your RNs?

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or [email protected]. Or you can follow him on Twitter at Self_JohnMarch.

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