HealthCare Voice

Video Summaries of Candidate Interviews Leads To Greater Success

Video Summaries of your search firm’s recommended candidates can help organizations avoid a costly leadership miss-hire; not video conferencing, which is widely overused in executive search, but edited video summaries of your recruiter’s in-depth face-to-face interview with the candidate.

Using videoconference technology to conduct the defining interviews that will be used to select their recommended candidates is a big mistake, the purported cost expense savings notwithstanding.  Reviewing an edited version of the interview allows the client to make an informed decision as to which of the four or five candidates on the panel should be invited for a site interview.

The proof is in the record of success.  Clients who have used search firms that incorporate video summaries as part of their candidate presentation say that it is “incredibly helpful” in selecting the right candidates .  “In the past, we had to rely solely on the recruiter’s judgment, and in many larger firms, the partner has only limited exposure to the candidate in the screening process,” one CEO said who asked that I not use his name out of concern that there might be negative repercussions.  Anyone who understands how most large consultancies work -- and search firms are consultancies -- knows that the partner is a rainmaker first, a client relationship manager second, and a working consultant a distant third. 

Providing clients video summaries is a game changer in the client-search firm relationship.

The CEO continued that over a seven-year period and 12 searches, “having the videos helped us avoid some big mistakes.  Over that period of time we only had one candidate who did not work out and that individual left after two years and the search firm provided a replacement.”  He is not alone in his assessment.

The cost of a miss-hire at the executive level is extraordinarily costly, from 50 to 500 times the failed executive’s annual base compensation, depending on the size of the company and the that individual’s scope of responsibility.

Using videoconference interviews between the recruiter and candidates for the final panel is penny wise and pound foolish.

© 2011 John Gregory Self

Seed Newsvine

Rethink Is Possible AND Necessary

There is a troubling strain of conventional wisdom that suggests that nurse-doctor relationships are dysfunctional, and that is one big reason for our unacceptable problems of quality of care.

Karen Bartholomew, RN, an international speaker and healthcare culture expert and Dr. Joseph Bujak, a speaker and consultant on physician relationships, clinical quality and patient safety, writing in Hospital Impact, claim “that the two most important people responsible for our patients’ care frequently never talk to each other, and when they do the interchange is often dysfunctional.

“No wonder 22 patients die an hour from avoidable harm.”

What makes this article more disturbing is their assertion that changes in medical practice over the past 20 years leave “physicians and nurses lamenting that it was ‘better’ in the old days.”

The authors point to structural changes in both the practice of medicine and hospital operations as reasons for this unacceptable breakdown in communication.

Physicians – “Physicians have progressively become more sub specialized, diffusing responsibility and challenging the ability to integrate care.  Coverage groups expanded, reducing the number of days on-call so that the primary attending physician is often unreachable.”  The authors point to physician rounding – sometimes before the patient is even awake – and the demands for improved productivity mean that there is little or no time for the physicians to locate the primary nurse.  “Sadly, physicians often don’t even know the names of the nurses who care for their patients.  How easy it is to be disrespectful of someone who remains anonymous – especially over the telephone.”

Nurses – The structural changes in hospital operations have also adversely impacted nursing.  “Twelve hour shifts make the continuity of care more difficult.  Only 40 percent of the nurse’s work is actually nursing – they are performing clerical duties, locating missing medications, trying to find equipment or on the telephone on hold.”  In a typical patient care cycle, the authors point out that “one nurse admits (the patient), another gives care, and yet another discharges in 48 hours – another example of why failed communication is the number one cause of medical error.”

But all is not lost.  Ms. Bartholomew and Dr. Bujak argue that structural changes can also make things better, a rethink of the physician-nurse relationship: 

1. The expansion of hospital intensivists and hospitalist physicians is reducing the number of doctors who are involved in complex cases
2. Team rounding is becoming more prevalent
3. Physician availability for an entire shift improves the frequency of nurse-physician communication
4. Situation-Background-Assessment-Recommendation/Request (SBAR) is “improving the nurses’ understanding, supporting their professionalism, and helping them prevent the entrapment of physicians when a lack of necessary information precludes good communication
5. Personalization of the nurse-physician relationship is essential.  Physicians should know the names of the nurses they deal with, and nurses should insist on identifying themselves before each encounter
6. Brief weekly – at least monthly -- education opportunities for nurses provided by a physician
7. Charge Nurse presentation of a case scenario at weekly physician rounds – an unheard of practice at most institutions, the authors say
8. Executives must lead what will amount to a cultural transformation at most hospitals “by insisting on daily communication, physicians knowing nurse names, creating joint education and celebratory venues and bedside rounding and actually living the values of the organization by zero tolerance of disruptive behavior -- same rules for all roles”

It has taken a long time for healthcare quality to slip to these disturbing levels in quality and safety, and our turnaround will not be “on a dime.”

The bigger question will be whether hospitals can sustain the focus that will be required to make these kinds of changes in an era of unprecedented cuts in funding that will prompt more focus on costs and productivity.

These valuable eight points are more of inside the box solutions. 

I wonder how we will manage the nurse-physician relationship outside the box – when we are forced to redesign how we deliver care because can we cannot sustain what we are doing now.

A healthcare system “rethink” is not only possible, it is necessary.

© 2011 John Gregory Self

Seed Newsvine

Leaders Who Are Bullies: No Excuse for Bad Behavior

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

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

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

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

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

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

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

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

For the victim, quitting is not always an option.

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

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

© 2011 John Gregory Self

Seed Newsvine

Words and Actions Matter

Words matter.  Actions fulfill the promise of those words.  When a leader’s actions do not match his or her words, he/she is creating an environment that will compromise their achievements, damage their brand and, worse, limit the success of the enterprise.

At the core of what makes a talented executive a great leader is authenticity.  When a leader is perceived to be anything less than authentic, the consequences can be far reaching.

In healthcare, that environment can trickle down – actually it cascades – to such deeply important issues as quality of care, patient safety and customer satisfaction.

Why would anyone want to be admitted to a hospital where the work environment is dysfunctional, where the leader is seen in less than favorable terms – an executive fraught with inconsistency, yearning to be liked at the expense of respect, a shouter,   an abuser or a bully? 

These characteristics may be the extreme, but it is surprising how little it takes for the culture of the leadership to reach an unhealthy tipping point.  In challenging times, with financial, regulatory, and competitive pressures accelerating at breath-taking speeds, CEOs must be mindful of not only many complex issues and relationships,  they must also ensure that their authenticity gauge is working correctly.

© 2011 John Gregory Self

Seed Newsvine

Curiosity Killed the Cat But Saved the Recruiter

What makes a good recruiter? How do you define a good recruitment program?

As increasing numbers of healthcare systems, hospitals and other providers focus on reducing costs by bringing the executive search function internally, there are important factors to consider in identifying the person to handle your director-level and executive recruitment projects as well as for developing a process that will yield results that are better than the average recruiting agency.

Consider these points in developing your interview process:

1. Employment of hourly or supervisory personnel, given the numbers of people hired in most organizations each year, emphasizes the process. Successful executive search also relies on process and judgment, but requires more in-depth analysis and research.

2. Focusing only on a candidate's experience is a mistake. The high turnover of candidates recruited from outside an organization – estimated at 50 percent in 24 months in several studies – is typically not due to organizations hiring inexperienced managers and executives.

3. Personality of the candidate matters. Personality is not a component of the resume.

4. Curiosity may have killed the cat, but it also has saved more than a few recruiters from making costly mistakes. Ask the questions that are begging to be asked.

5. Don’t rely on just the traditional or base questions. Look for details or events in the candidate’s earlier life that helped shape who they are today.

6. Explore their failures. Everyone has had their flops, career disappointments or performance flameouts. Investigate what happened and why but the main point is understand what the candidate learned from the situation.

7. Know what the hiring authority wants. Develop a deep understanding of their personality and style, performance expectations, problems in the division or department and hurdles that must be overcome to achieve success (what will success look like?). 

8. Candidates should be told the salary range before organizations invest time – the candidate’s and the recruiter’s –in going through the interviewing routine. (I am amazed at how many stories I hear of candidates, primarily at the management and director level, who currently earn more than the top end of the employer’s range and no one bothered to address that important issue until the end of the recruitment cycle.)

9. Be prepared. Once the primary screening interview is over, it is too late, or too embarrassing, to re-interview and follow-up on all those issues that jumped off the paper like a flashing strobe light once the telephone call has ended.

10. Be sure your references include secondary sources – those recruiters develop in the candidate interviews, especially for those candidate employment tenures where there may be issues that should be resolved. Remember, smart candidates – which may or may not be the best candidates – will provide references that are usually positive. No one is perfect. Address all the issues.

 

© 2011 John Gregory Self

Seed Newsvine

To Be Or Not To Be...TRANSPARENT

Transparency in recruiting is essential, yet many organizations, and their recruiters, play fast and loose with the term or ignore it altogether.

Lack of transparency in the recruitment process is one of the principle reasons that more than 50 percent of all candidates recruited from outside an organization quit, are pushed out, or are fired within the first 24 months, according to employment industry studies.

In more than 17 years in the executive search industry, I have heard candidates describe horror story after horror story regarding how the truth about a company, a job or even the compensation plan was covered up or, at times, distorted. When a frustrated candidate approached her new boss about an intractable problem that would dramatically affect her tenure – the boss replied with words to the effect:  If we had told you the truth you would not have taken the job.  If I had $10 for every time I hear that line from candidates, I would be on financial easy street.

Some CEOs and/or their well-intended but misguided minions will cover up any number of issues to avoid admitting the worst kept secret in the world:  that they have problems – from leadership dysfunction;  the bloody and brutal nature of inter-office politics; the management silos that squash innovation, drive up costs and harm patients; and the immovable barriers that stymie performance. The inventory of issues are endless.  In some organizations so is the list of problems that everyone knows but are not allowed to disclose to potential new employees.

Some organizations decry the practice of being deceived by fraudulent references but will go to great lengths to cloak the truth about their shortcomings to their potential employees.  It is as if the companies are playing a massive and costly game of “you figure it out.”  This practice is not just limited to a few complex hospitals or other healthcare service businesses.  It is a widespread problem across all sectors.

For companies who are honest about their issues, who practice full disclosure, they typically are able to recruit and employ candidates who stay longer and produce greater value. Honesty contributes to a sense of belonging for employees as well as a deep pride to be working for a company who walks the talk.

I can think of no reason for any organization to engage in a recruiting process that is anything less than completely transparent about the good, the bad and the ugly of an organization.

The upsides in this environment are endless.

© 2010 John Gregory Self

Seed Newsvine

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

Seed Newsvine

Just Another Management Fad...

One of the most common lies in business -- right after "the check is in the mail” --  is "our employees are our biggest asset."

Year after year, that maxim is repeated over and over -- it shows up in hundreds of annual reports of hospitals across the nation.  While some forward-looking healthcare organizations have taken steps to change, re-titling the Vice President of Human Resources to Chief Talent Officer or Chief Human Capital Officer and referring to their employees as associates or partners, the vast majority of healthcare businesses actually treat their employees not as an asset -- the estimated 70 percent of the net worth of their enterprise -- but as an expense that must be controlled or even outsourced.

Hospitals, like their business counterparts in other sectors, struggle with the concept of employee empowerment. Programs, initiatives and campaigns to change how we view and treat our workers come and go like so many fads and the books that tout them.

Why does this matter?

The industry's ability to design new and more cost-effective ways of delivering care will depend largely on our human capital.

It seems that the command and control approach to management is just one more fad.  It just lasted longer than most.

© John Gregory Self

Seed Newsvine

Defining Success at Each Stage of Interview Process

What is the definition of success in recruitment?

Hiring the right candidate.  That is a non-starter.  But the question is how do you measure success in each step of your recruitment process that will produce that right candidate?

Before diving into the process metrics, I want to, again, reiterate a strongly held view: that candidates be provided a position description or position prospectus with sufficient detail for them to understand the job, the criteria, experience requirements, performance deliverables and the salary range.  Given that the recruitment process has been described as the equivalent of getting married after four or five dates, I firmly believe that the best way to mitigate the risks that are inherent in this time sensitive process is to provide more, not less, information.  Weaker candidates tend to “de-select” if they know the position is above their pay grade – their experience and current skills.  Moreover, a great deal of time is wasted in the search process, by both internal and external recruiters, because the process is advanced with candidates who frequently are not aware of the salary range.

Virtually every executive or management recruitment process is comprised of two or more interviews. At JohnGSelf Associates, here is how we define success in each phase.

    1. Resume Review -- You finish the round with a panel of candidates with the credentials, skills, and relevant experience who have submitted their resumes and reviewed a position description or a position description outlining the key elements of the opportunity.  Hopefully the resumes will be of sufficient quality that the researcher or recruiter can easily track past accomplishments.  Each resume should be graded and only the top candidates should advance to the next round.  The researcher or recruiter who evaluates the resumes should complete a brief written analysis, preferably online as part of an integrated recruiting information system, highlighting areas of concern or those that will need clarification if the candidate advances.

    2. Telephone Interview – When you have completed the telephone interview round of the search, you should have a group of candidates, any of whom you could invite for a face-to-face interview.  They know the salary range; they understand the scope of responsibility and the performance expectations.  Most importantly, they have been told about the culture of the organization, how decisions are made, and what challenges they must overcome in order to achieve success.  You will know that these candidates have the relevant experience and a record of success in a similar situation.  From this group, subject to background checks, you will select the highest rated candidates for site interviews.  Some organizations will check three or four references prior to the face-to-face interview, but in a “high volume” internal recruiting environment, this may not be practical.  If you use a behavior and values tool like DiSC^© we recommend that you have the candidates who will be invited for site interviews to complete this  so that it can be available for that phase. Recruiters who lack the experience in using one of these tools should seek counsel from someone who understands the tool to ensure that it is used appropriately in framing questions to be asked during the site interview. Success at this stage is having seven to 10 candidates from which you can select three or four for a site interview. Time is now of the essence.  The best candidates are in demand.  You do not want to have a search in which you have only one remaining candidate because the other candidates have withdrawn for whatever reason.  Competition among the candidates is important.

    3. Face-to-Face/Site Interview – This interview should explore, clarify and confirm key elements of the candidates prior accomplishments, their style and how their “presence/chemistry will fit with the organization’s existing culture.  Measuring a candidate’s commitment and passion for success is a very important component of this interview.  The interviewer(s) must fully engage in what is known as “active listening” – suspending other tasks, focusing on the candidate, listening not merely to the words, but the feeling content, and asking for clarification of candidate comments. 

At this stage, success is defined as having two or three candidates, any of whom could successfully do the job and deliver long-term value for the organization.

^© 2010 John Gregory Self

  Seed Newsvine

Onboarding Leverage

Most recruiters do not involve themselves in the Onboarding process.  The absence of Onboarding principles in a search firm's system is a characteristic of the "Transactional" search model that has been in use for more than 50 years and is still widely practiced today.

Transactional search is an "order filling" process.  Clients tell the recruiter what they want and the firm's junior recruiters fill that order with a panel of candidates. Transactional search is already showing signs that it is out of date as businesses adjust to the "new normal" economy.  Studies show it is a hit-or-miss approach with costly consequences.

"Transformational Search" is a search model built on Onboarding principles and, if properly designed and implemented, will produce far better results. More cost effective results.

I encourage you to learn more about Onboarding and the benefits of incorporating this critically important practice into your search process.  

George Bradt, a leader in this field, outlines some important points for the Onboarding process in his recent blog. 

Onboarding Leverage.

Seed Newsvine 

A NEW FOCUS: Executive Recruiting, Talent Acquisition & Career Management

When I began this blog some 149 posts ago, I wrote about recruiting, leadership, healthcare reform, career management, politics of healthcare, quality and patient safety, etc.  Virtually everything that touched healthcare and captured my attention made it into this blog. As a former newspaper writer, I have thoroughly enjoyed getting back into the routine of writing, and in learning about how to blog.  It has certainly helped me sharpen my focus on a range of issues.

While I enjoy the writing, and the critical process it takes to produce a blog, I am not doing this to perfect my writing skills.  I am looking for engagement.  Over time I noticed that the posts drawing the most attention and comment were not on the politics of healthcare reform, or even the substance of the legislation. Nor did readers seem too interested in thinking about what the healthcare delivery system of the future would look like.   Rather, people responded to things that mattered to them personally -- career management, how to develop and sustain networking relationships to enhance their job search, and how to be more effective in telephone and face-to-face interviews.  Hospital Chief Executives and their human relations executives were more interested in how they could reduce the costs of acquiring the talent and be more effective. 

This makes sense.  We have entered a new economy, one that will be characterized not by big growth bubbles that generate heady financial times with low unemployment and accelerating consumption that seem to bring out the worst in us, but a resetting or our economy with new expectations regarding pay, benefits and time/life balance.  We are in the midst of a resizing.  Given our national debt and the war on terror, all things economic may not return to the “old” normal for another 10 years or so.  With Medicare moving to become the big driver of our national debt, hospitals must develop a laser focus on costs.  

Human capital, the biggest portion of a hospital's expense budget and the single most important contributor to an organization's net worth, is now more important than technology. This will profoundly change the way we approach recruitment and how we manage our talent.  For healthcare workers, career management and job searching skills will be more important as health systems resize to reduce costs.

As I thought about those issues over the weekend, I realized that while I had written numerous blogs on executive recruiting, talent acquisition and management as well as career management, there is much more to cover and there is a great interest in these subjects.

I encourage you to submit your suggestions for blogs as well as your questions on everything from recruiting strategies to resume construction, how to prepare for interviews and how to make each new hire a valued and productive asset sooner rather than later.  

If you want to email me, write to: [email protected].  Or you can post a comment or question at this site. 

 © John G. Self, 2010

Seed Newsvine 

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.

Seed Newsvine

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]

Seed Newsvine

Communication Blockages in Onboarding

George Bradt has again focused on a very important aspect of recruiting, integration and retention. These are all interrelated issues and CEOs and HR VPs who do not come to grips with these issues are placing themselves, unnecessarily so, at risk.

I encourage you to read the blog and subscribe.  

Communication Blockages in Onboarding.

Communication Blockages in Onboarding.

Meanwhile, look my latest post tonight when I will announce my career plans.

Thanks for reading, and thanks for your continued support.

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.

Seed Newsvine

My first job was working in my parents’ upscale and very successful retail bakery in Tyler, Texas.  I washed pots and pans -- lots of pots and pans -- helped the bakers, and made deliveries, primarily the wedding cakes.  In the marrying season, it was common for my father to produce 12-15 major cakes every weekend.  

The holidays were a grind – especially Thanksgiving and Christmas – but they are marked by a family and devoted employees working together to serve customers.  There were grueling hours.  But there was laughter and a sense of purpose.  Today, my memories are filled with some of the greatest memories and smells of a lifetime! 

My dad once picked me up at school a couple of days before Thanksgiving.  He had been making pumpkin pies.  He was driving a new car that the local Chrysler dealer was trying to sell.  It was so new; it still had the plastic shipping covers over the seats.  Remember how new cars use to smell?  It was such a distinctive blend of new fabric, plastic, rubber, and steel that people called it “that new car smell.”  Not this time.  All I could smell was pumpkin pie.  “Dad, I said, you are going to have to buy this car.  No one else in this county is going to want a new car that smells like Pumpkin Pie.” 

I recently saw a LINKEDIN discussion where people were asked to share important lessons from their first job that they use today.  This intriguing question led me to reflect on my childhood and youth. 

Working with my father, I learned some important life's rules and important lessons of business.  He died in 1989 but today, he remains my True North. 

Lloyd Self’s Five Rules:

1.  Do what is right, even when no one is looking .

2.  The customer comes first.  Honor that.  It is not just a rule; it is who you are. 

3.  The customer is not always right.  See rule #2. 

4.  Quality counts. 

5.  We all make mistakes.  We all get tired.  We all want to cut corners because of time or fatigue. When that happens, remember rules #1 and #2.

 In more than 16 years of interviewing and watching CEOs and other senior executives as a partner in an executive search firm, I have added another very important rule.

6.  Respect your employees as if they were your customers.  You will get more for your money.  Do not yell at, bully, or criticize your employees, especially in public.  There is no room in any company for an abusive leader.

2010 has finally arrived.  2009 and a very traumatic decade have exited the stage for the historians economists, and pundits to dissect.

 As we begin this new decade, we should all pause and reflect on our  performance, our behavior and our values over the past 10 years.  As I made my own review, I thought of my of my father and his admonition that I had almost forgotten amid the economic carnage that was 2009:   We all have far more control over our lives -- our success or failure -- than other person, any competitor or any politician. 

I hope that this next 10 years will be known as the decade of personal and professional accountability. 

 Our country will be better for it.

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

 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. 

Seed Newsvine

A high performing Director of the Lab for a 565-bed hospital announced her resignation.  The Vice President responsible for overseeing the department consults with the Chief Operating Officer and Vice President of Human Resources and then contacts several contingency recruiters to identify potential candidates.

 Five weeks later, a close friend of the now departed Lab Director – the Director of Pharmacy who was considered to be one of the best department managers in the organization – also resigns.

 It would take six months before a suitable replacement for the Lab Director could be found.  It was another month before they reported for work after a costly relocation.  During that time two section managers and the night supervisor also resigned.  What had been a star department failed to meet its contribution margin for the next five months as the new director made changes and recruited replacements.

 The search for the new Director of Pharmacy lasted only four months.  The Assistant Director successfully ran the department during the transition but then resigned when she was not promoted.  The replacement Director resigned 14 months later for family reasons.  They were unable to sell their house and the hospital’s interim living arrangement expired and was not renewed based on a long-standing board policy.

 Far too many health systems and hospitals are playing the talent management equivalent of Russian roulette in the event – unlikely or not – that a key Vice President, Director, or Manager will be recruited to a cross-town rival or across country for a sizeable increase in pay and scope of responsibility.  Or worse, they left because they felt unappreciated and/or saw no opportunity for future professional growth.  It is an interesting contradiction in priorities when an organization spends hours each month and each quarter reviewing financial, operational and clinical performance data but spends almost no time on management succession.

 The case example clearly shows that this breakdown can lead to costly financial setbacks and a decline in morale, which frequently ignites greater turnover.  In the new healthcare economy, with lower rates of reimbursement from Medicare and commercial payers, CEOs can ill afford to take anything for granted, especially the organization’s human capital.  It is also noteworthy that both departing Directors reported to the same Vice President, a long-term executive with more than 28 years of leadership experience who was planning for retirement.

 In a time when most organizations are focused on investing capital for data management, including the implementation and integration of Electronic Medical Records into existing platforms, far too many are neglecting a less costly investment in human capital.

 With intensifying competition for the best talent, and with turnover rates beginning to rise in certain competitive markets – which will surely spread to other markets as the economic recovery takes hold – a more focused commitment on human capital will enhance an organization’s performance and strengthen its net worth. 

 An integrated Total Onboarding Program, with a best-in-industry recruiting process, and talent mapping are two of the best investments healthcare providers can make. 

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. 

Seed Newsvine

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].  

Seed Newsvine

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.

Seed Newsvine

IMPORTANT NOTE TO MY SUBSCRIBERS: HealthCare Voice is ending our association with Feedblitz. We are now happy to be part of the FeedBurner/Google family. If you are currently receiving HealthCare Voice via the FeedBlitz email or through a Feedblitz RSS feed to a browser/reader and you would like to continue receiving the blog, please resubscribe by choosing the appropriate FeedBurner button in the left column of the blog. We apologize for the inconvenience. We value your subscription and we hope you will continue to read the blog. Thank you for your interest and support. - John G. Self

I met with a trusted advisor on Friday in the lobby of a downtown Dallas skyscraper. We were discussing my Personal Positioning Statement, and the changing healthcare environment. For months, I have been carefully following and blogging on the Congressional debate on reform. Listening to the political rants of television’s chattering experts regarding waste, soaring costs, and budget deficits, I realized that this noise was raising my own level of frustration. And it showed.

An eternal optimist, I was actually becoming very negative regarding the course of the debate as well as the agenda of the various experts who would purport to speak the truth. My colleague and friend suggested that it was time to move on. My negative focus regarding the current state of the debate on reform was not enlightening anyone. She was right. She usually is.

As I walked into the cool afternoon sun, I experienced a moment of clarity. All the political yelling and shouting aside, I realized that one of two things will happen:

1. Congress will pass a healthcare reform bill. CMS will reduce payments to hospitals, physicians and other healthcare providers to pay for the bill.

2. Congress will stumble yet again and healthcare reform will die. Congress/CMS will reduce payments to hospitals, physicians and other healthcare providers to solve the critical deficit crisis.

So, the real take away here is that healthcare service providers will get less money. The outcome may not be fair, but in the words of an old Texas wag that I have often quoted in many of my speeches, “If you want fair, come to Dallas in October. It’s called the state fair.”

We cannot control either outcome. Therefore, I think the best course of action is for healthcare executives to take charge of their own destinies. I think the central question is: How can CEOs proactively reduce costs ahead of an era of lower payments from CMS and, eventually, commercial providers?

All is not lost, believe me. This is not a time for wringing of hands and gnashing of teeth. I truly believe that this is a time for innovative leaders to shine. And I believe they will.

There are dozens of reports circulating through news publications, on talk shows and through the halls of Congress about the waste in healthcare. These reports do a disservice to the thousands of hospital CEOs who worry about these very issues. However, to a great degree, these healthcare leaders are trapped by a so-called “system” that was built around years of poorly designed reimbursement programs, complex government regulations, and special interest exemptions. We cannot control the flow or content of these reports and studies any more than we can control what Congress does.

It is time to move on to those things that really matter day in and day out.

What CEOs and their teams can control is the quality of patient care, customer service, and patient safety. CEOs can also control their costs. One very important area where CEOs can drive out costs and build value is the human capital component. There is big money to be saved in this arena. The good news is that it does not begin or end with cutting salaries.

Actually, there is an amazing amount of hidden cost in healthcare recruitment, orientation, and retention programs that never appear on a financial statement. But these costs are there, and there is a lot to be gained from examining the process, piece by piece; from position descriptions, recruitment and onboarding, to employee satisfaction and the turnover rate. Each portion of an organization’s human capital component will yield some important savings if you apply the correct performance metrics.

Focusing on this critical aspect of healthcare operations will help CEOs recognize an untapped reservoir of efficiency and good will with their employees.

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.

Or, you can follow him on Twitter at Self_JohnMarch.

Seed Newsvine

Rarely – if ever – can companies sustain long-term success using an industry business model that is essentially more than 50-years-old without experiencing a challenging transformation.

The executive search model certainly has enjoyed a long and profitable run. Yes, there have been some technological advances but by and large the search industry still works as it always has: Identifying talent for client firms and charging fees based on a percentage – usually 30 to 33 percent of the successful candidate’s first-year cash compensation.

At JohnMarch Partners, we believe that the new economy, characterized by fewer people with jobs, reduced consumer spending, a clouded business outlook due to continuing concerns over the size and role of government, and a spiraling national debt is going to play a major role in changing how search firms conduct business. There will always be executive search projects that command top fees such as those for public companies offering salaries of more than $500,000. But if 2009 has taught us anything, it is that the search business model is vulnerable.

Across the board, firms are reporting significant drops in revenue. Many smaller firms are barely hanging on, while major firms are laying off and restructuring operations.

While this transformation of executive recruitment will affect many industrial sectors, healthcare will be particularly hard hit simply because many health systems and hospitals, among the largest users of search firm services in the healthcare sector, will face major cutbacks in Medicare and Medicaid funding as part of healthcare reform. Even if reform fails legislatively, the cuts will still come, due in large part to an actuarial hell caused by a flood of new beneficiaries into the Medicare program and not enough people working to fund their claims.

For more than 50 years, search consultants have enjoyed a reasonably consistent, predictable and very profitable way of life. Nothing lasts forever. There is change in the air.

Transformation of the executive search business model is not about the discounting of professional fees but rather a focus on helping clients to identify and recruit top candidates while helping manage their talent acquisition costs with innovative approaches.

At JohnMarch Partners, we anticipated these changes. We have developed and expanded our portfolio of services that will afford health systems, hospitals, physician group practices and other healthcare providers the flexibility to select services that will enable them to achieve this important goal.

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]. He is an active member of Linked In and a frequent editorial contributor.

Or, you can follow him on Twitter at Self_JohnMarch.

Seed Newsvine

The cost of employee turnover, that hidden operating expense that rarely finds its way into financial statements, is in the healthcare industry spotlight as hospital and physician group practice executives grapple with ways to reduce their costs in anticipation of significant cuts in Medicare payments that are in the pipeline.

Since more than 78 million Americans will be entering the Medicare system over the next 20 years, and with the Medicare Board of Trustees projecting that the Hospital Insurance Trust Fund will be bankrupt in eight years, the outlook for more severe cuts in payments to doctors and hospitals is a foregone conclusion. While the argument is true that simply cutting Medicare payments to healthcare providers is not healthcare reform, it is an economic reality.

There are more than 5,100 hospitals in the U.S. today. Those that cannot transform their operations and dramatically reduce costs may find themselves in bankruptcy or out of business.
That is why something as mundane as reducing employee turnover is so important.

There are hundreds of studies that have analyzed the economic impact of turnover, and executive mis-hires. For nurses, the projected replacement cost ranges from $3,000 in one “conservative estimate” to more than $60,000 for a specialized ICU or perioperative clinician. The consensus estimate is between $25,000 and $45,000 per nurse.

In hospitals that recruit and train 80 RNs a year, the estimated turnover cost is between $2 and $4 million a year. When you include dietary workers, nurse aides, lab and imaging technicians in the those costs quickly move north of $5 million a year. For some hospitals, the cost of turnover is equal to their operating margin for an entire year. At one large east coast hospital, executives estimate their turnover costs are more than $12 million a year, at a minimum.

The cost of leadership turnover ranges between two to three times their annual base salary, according to conservative projections. The average CEO tenure in 2006 was only 43 months, according to a study from the American College of Healthcare Executives. At some investor-owned corporations, that average tenure is considerably lower. With an average base salary of $175,000, the cost of CEO turnover for one investor-owned corporation is more than $8.7 million. Today, that may be viewed as a cost of doing business, but in a new healthcare economy where you must reduce costs to a level approaching Medicare Minus in order to make a margin on the flood of new seniors into the program, these turnover costs will be harder for investors to swallow.

Hospitals and physician group practices are in for a bumpy ride as they work to transform themselves – with or without Congressional “healthcare reform.”

At JohnMarch Partners we have transformed our business model to provide clients with flexible portfolio of recruitment solutions that will enable them to choose all or part of our executive search process – whatever suits their needs.

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]. He is an active member of Linked In and a frequent editorial contributor.

Or, you can follow him on Twitter at Self_JohnMarch.

ahref="http://technorati.com/faves?sub=addfavbtn&add=http://healthcarevoice.typepad.com/healthcare_voice">

Seed Newsvine

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.

Seed Newsvine

CHICAGO (March 23, 2009) – As the American College of Healthcare Executives (ACHE) convenes its annual education Congress today, the military is out in force. These healthcare executives from the military’s highly regarded Medical Service Corp (MSC) run our Army, Navy and Air Force hospitals and ambulatory clinics at bases throughout the U.S. and around the world.

They are gathering with thousands of their civilian counterparts for four days of intense education covering topics such as quality, patient safety and satisfaction, physician-hospital alignment challenges, regulatory compliance, finance and even reimbursement. Military officers attend the same classes with their civilian counterparts because there are so many similarities between the two types of healthcare operations. Yes, there are some differences but those are far fewer – and minor in scope – than most civilian healthcare CEOs or their recruiters would imagine.

In addition to attending the myriad of educational sessions, many of the military personnel are here for career networking. Dozens are preparing to transition to, hopefully, a similar role in a civilian healthcare sector.

These officers are some of our best and brightest. They know how to lead. They know how to execute and produce anticipated results. They know how to work with physicians, manage to budget and compete for revenue. They have the same education and professional credentials as their civilian colleagues. Many have had the opportunity to pursue additional degrees and in-depth training programs to sharpen their leadership skills, their analytical ability, or to master the latest thinking concerning health system design and delivery.

The military does NOT cut corners when it comes to investing and developing their leaders.

Why, then, are these proven leaders not viewed as a choice “catch” for the executive teams of healthcare organizations in the U.S.?

The answer is that they face a wall – a formidable barrier -- built of years of accumulated myths, a lack of understanding of how military hospitals operate, or, often, even a preference for “safe” candidates, those candidates whose background and career path is like their own.

Some of these myths include:

1. Most military officers hold, on average, four jobs in their first seven years following retirement.

Yes, a study reported these results. However, those numbers are significantly skewed by including the officers from combat and support divisions where the command structure and leadership style are, in actuality, markedly different from the MSC, according to former officers I have interviewed and who have successfully completed the transition.

2. The military’s leadership structure, the privileges and the forced respect of commanders creates unreasonable expectations that are incompatible in the civilian workplace.

This myth usually draws the biggest smiles – even some hearty laughs – from military healthcare executives. On average, 65-70 percent of all employees at military healthcare installations in the U.S. and overseas are civilians. That fact alone illustrates why there is much less of the formal military culture in their hospitals – less saluting and less commanding personnel to perform.

3. MSC executives have a captive workforce that is compelled to follow orders. This makes running a military hospital much easier than a civilian facility.

This, too, is incorrect (See number 2 above). MSC civilian employees need and want the same type of inspiration, coaching, mentoring, and encouragement as their counterparts in civilian hospitals. Issuing commands, shouting orders, dictating performance, or other types of command behavior that is more evident in combat units does not work in military hospitals, Walter Reed included.

4. Military healthcare executives do not understand civilian labor relations issues.

Not true. Surprisingly, the civilian workforce at military hospitals in the U.S. and at many bases around the world, are unionized. Colleague and friend, Col Tom Driskill (retired), who was Chief of Staff at Walter Reed and Trippler Army Hospital in Honolulu, among others, said that labor negotiations in the military could be every bit as tough as those in a civilian closed shop union environment. Officers who do not maintain effective labor relations will have a tough time meeting their performance targets, and this could materially affect their career outlook.

5.The military does not hold its hospital executives to the same standard of accountability.

This myth is wildly off target. MSC officers know that they might survive one bad performance review, but not two. Two poor performance reviews typically means you will not advance to the next rank. In the military if you do not advance, you retire, you are asked to leave or you are forced out. If you do not qualify for retirement at that point, you will lose everything that you have invested in your career investment.
The military’s culture on accountability is tough. It is unforgiving. And it is very different from the civilian hospital culture where the “up or out” mentality does not exist. While this can potentially create transition problems for some officers, this can be handled through an effective “onboarding” program.

Are there bad leaders in the MSC? Yes, as is certainly the case within civilian healthcare organizations. Nonetheless, civilian leaders need to take a hard and long look at the MSC’s deep pool of talent. They will find great leaders with solid work experience who can and will deliver exceptional value.

They are, after all, among our best and brightest with solid work experience.

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 leadership experience in public relations, national marketing and business development and as Chief Executive Officer of hospitals, and consulting firms, Mr. Self is highly regarded for his keen insight into business culture and the types of leaders who will succeed. You can contact Mr. Self at 214.220.1234 or [email protected].

ANN ARBOR, Michigan (March 18, 2009) I am at the University of Michigan to speak to graduate students in the nation's top ranked healthcare graduate management program. My host is outstanding teacher and friend, Dr. Christy Harris Lemak. Over dinner, we exchanged stories about our beloved industry, the leaders who have contributed so much, and some of the funny stories that we have encountered through our disparate careers.

As we enjoyed a wonderful meal, I mentally recalled one those classic moments that, if it had been told on the Tonight Show with Johnny Carson by someone with far more talent than me, would have made that infamous anniversary show reel of spectacular highlights.

It was a wonderful, hilarious moment for me. For the "victim," the newly appointed Director of Materials Management at Methodist Hospital in Memphis, it was a bleak, career limiting moment.

The year was 1978. I was the national marketing manager for Rocky Mountain Helicopters' hospital based air ambulance program. I just had lunch with Texan Chester Ayres, a vice president of the Methodist system who had once worked for LBJ at his Austin television station. We had just returned from a lunch where martinis had been consumed. We were both catching flights -- me to LA for a closing dinner at Memorial Medical Center in Long Beach. Chester was flying to New York.

We returned to the Methodist Hospital central unit to fetch my luggage. We had plenty of time, but Chester, a Texan with the bark on, who still had plenty of political stories to tell, wanted to get to the airport so we could continue our conversation over additional adult beverages. Standing between my luggage and Chester's determination to get to the airport was the aforementioned Director of Materials Management, holding court in the main hallway wearing a flashy plaid sports coat on his first day on the job. When he found out who I was, he immediately launched into a lecture on how he was going to control the bid and specification process. Once he got started, he would not shut up. Chester became more impatient by the moment. Finally, he started rubbing the lapel of this awful plaid jacket.

After a few minutes, this fashion king stopped talking – thankfully – looked down at Chester’s hand and asked: “Do you like my coat?”

Chester quipped, “Son, somewhere in Tupelo, Mississippi there is a '57 Chevy that ain’t got seat covers.”

Sudden Silence. I grabbed my bags and we fled the scene. We made it to the airport in time for one more great story about former President Johnson. On the down side, I don’t think the new Director lasted too long at Methodist.

Life is full of amazing stories. And some very clever punch lines. In these tough times, we need to remember that important fact.

Listen for the stories and laugh when you can.

John G. Self, Chairman and Founder of JohnMarch Partners, is the Firm’s senior client advisor. A 32-year veteran of the healthcare industry, he is a former investigative reporter and crime writer for a major daily newspaper. Candidates and clients say he is one of the most thorough executive recruiters working in the healthcare industry.

True North: Life's Rules From My First Job

My first job was working in my parents’ upscale and very successful retail bakery in Tyler, Texas.  I washed pots and pans -- lots of pots and pans -- helped the bakers, and made deliveries, primarily the wedding cakes.  In the marrying season, it was common for my father to produce 12-15 major cakes every weekend.  

The holidays were a grind – especially Thanksgiving and Christmas – but they are marked by a family and devoted employees working together to serve customers.  There were grueling hours.  But there was laughter and a sense of purpose.  Today, my memories are filled with some of the greatest memories and smells of a lifetime! 

My dad once picked me up at school a couple of days before Thanksgiving.  He had been making pumpkin pies.  He was driving a new car that the local Chrysler dealer was trying to sell.  It was so new; it still had the plastic shipping covers over the seats.  Remember how new cars use to smell?  It was such a distinctive blend of new fabric, plastic, rubber, and steel that people called it “that new car smell.”  Not this time.  All I could smell was pumpkin pie.  “Dad, I said, you are going to have to buy this car.  No one else in this county is going to want a new car that smells like Pumpkin Pie.” 

I recently saw a LINKEDIN discussion where people were asked to share important lessons from their first job that they use today.  This intriguing question led me to reflect on my childhood and youth. 

Working with my father, I learned some important life's rules and important lessons of business.  He died in 1989 but today, he remains my True North. 

Lloyd Self’s Five Rules:

1.  Do what is right, even when no one is looking .

2.  The customer comes first.  Honor that.  It is not just a rule; it is who you are. 

3.  The customer is not always right.  See rule #2. 

4.  Quality counts. 

5.  We all make mistakes.  We all get tired.  We all want to cut corners because of time or fatigue. When that happens, remember rules #1 and #2.

 In more than 16 years of interviewing and watching CEOs and other senior executives as a partner in an executive search firm, I have added another very important rule.

6.  Respect your employees as if they were your customers.  You will get more for your money.  Do not yell at, bully, or criticize your employees, especially in public.  There is no room in any company for an abusive leader.

2010 has finally arrived.  2009 and a very traumatic decade have exited the stage for the historians economists, and pundits to dissect.

 As we begin this new decade, we should all pause and reflect on our  performance, our behavior and our values over the past 10 years.  As I made my own review, I thought of my of my father and his admonition that I had almost forgotten amid the economic carnage that was 2009:   We all have far more control over our lives -- our success or failure -- than other person, any competitor or any politician. 

I hope that this next 10 years will be known as the decade of personal and professional accountability. 

 Our country will be better for it.

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

 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. 

Seed Newsvine

CASE EXAMPLE: Talent Mapping, Management Succession Reduces Costs, Losses

A high performing Director of the Lab for a 565-bed hospital announced her resignation.  The Vice President responsible for overseeing the department consults with the Chief Operating Officer and Vice President of Human Resources and then contacts several contingency recruiters to identify potential candidates.

 Five weeks later, a close friend of the now departed Lab Director – the Director of Pharmacy who was considered to be one of the best department managers in the organization – also resigns.

 It would take six months before a suitable replacement for the Lab Director could be found.  It was another month before they reported for work after a costly relocation.  During that time two section managers and the night supervisor also resigned.  What had been a star department failed to meet its contribution margin for the next five months as the new director made changes and recruited replacements.

 The search for the new Director of Pharmacy lasted only four months.  The Assistant Director successfully ran the department during the transition but then resigned when she was not promoted.  The replacement Director resigned 14 months later for family reasons.  They were unable to sell their house and the hospital’s interim living arrangement expired and was not renewed based on a long-standing board policy.

 Far too many health systems and hospitals are playing the talent management equivalent of Russian roulette in the event – unlikely or not – that a key Vice President, Director, or Manager will be recruited to a cross-town rival or across country for a sizeable increase in pay and scope of responsibility.  Or worse, they left because they felt unappreciated and/or saw no opportunity for future professional growth.  It is an interesting contradiction in priorities when an organization spends hours each month and each quarter reviewing financial, operational and clinical performance data but spends almost no time on management succession.

 The case example clearly shows that this breakdown can lead to costly financial setbacks and a decline in morale, which frequently ignites greater turnover.  In the new healthcare economy, with lower rates of reimbursement from Medicare and commercial payers, CEOs can ill afford to take anything for granted, especially the organization’s human capital.  It is also noteworthy that both departing Directors reported to the same Vice President, a long-term executive with more than 28 years of leadership experience who was planning for retirement.

 In a time when most organizations are focused on investing capital for data management, including the implementation and integration of Electronic Medical Records into existing platforms, far too many are neglecting a less costly investment in human capital.

 With intensifying competition for the best talent, and with turnover rates beginning to rise in certain competitive markets – which will surely spread to other markets as the economic recovery takes hold – a more focused commitment on human capital will enhance an organization’s performance and strengthen its net worth. 

 An integrated Total Onboarding Program, with a best-in-industry recruiting process, and talent mapping are two of the best investments healthcare providers can make. 

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. 

Seed Newsvine

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].  

Seed Newsvine

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.

Seed Newsvine

At Last Clarity: Time to Move On to the Things that Matter Most

IMPORTANT NOTE TO MY SUBSCRIBERS: HealthCare Voice is ending our association with Feedblitz. We are now happy to be part of the FeedBurner/Google family. If you are currently receiving HealthCare Voice via the FeedBlitz email or through a Feedblitz RSS feed to a browser/reader and you would like to continue receiving the blog, please resubscribe by choosing the appropriate FeedBurner button in the left column of the blog. We apologize for the inconvenience. We value your subscription and we hope you will continue to read the blog. Thank you for your interest and support. - John G. Self

I met with a trusted advisor on Friday in the lobby of a downtown Dallas skyscraper. We were discussing my Personal Positioning Statement, and the changing healthcare environment. For months, I have been carefully following and blogging on the Congressional debate on reform. Listening to the political rants of television’s chattering experts regarding waste, soaring costs, and budget deficits, I realized that this noise was raising my own level of frustration. And it showed.

An eternal optimist, I was actually becoming very negative regarding the course of the debate as well as the agenda of the various experts who would purport to speak the truth. My colleague and friend suggested that it was time to move on. My negative focus regarding the current state of the debate on reform was not enlightening anyone. She was right. She usually is.

As I walked into the cool afternoon sun, I experienced a moment of clarity. All the political yelling and shouting aside, I realized that one of two things will happen:

1. Congress will pass a healthcare reform bill. CMS will reduce payments to hospitals, physicians and other healthcare providers to pay for the bill.

2. Congress will stumble yet again and healthcare reform will die. Congress/CMS will reduce payments to hospitals, physicians and other healthcare providers to solve the critical deficit crisis.

So, the real take away here is that healthcare service providers will get less money. The outcome may not be fair, but in the words of an old Texas wag that I have often quoted in many of my speeches, “If you want fair, come to Dallas in October. It’s called the state fair.”

We cannot control either outcome. Therefore, I think the best course of action is for healthcare executives to take charge of their own destinies. I think the central question is: How can CEOs proactively reduce costs ahead of an era of lower payments from CMS and, eventually, commercial providers?

All is not lost, believe me. This is not a time for wringing of hands and gnashing of teeth. I truly believe that this is a time for innovative leaders to shine. And I believe they will.

There are dozens of reports circulating through news publications, on talk shows and through the halls of Congress about the waste in healthcare. These reports do a disservice to the thousands of hospital CEOs who worry about these very issues. However, to a great degree, these healthcare leaders are trapped by a so-called “system” that was built around years of poorly designed reimbursement programs, complex government regulations, and special interest exemptions. We cannot control the flow or content of these reports and studies any more than we can control what Congress does.

It is time to move on to those things that really matter day in and day out.

What CEOs and their teams can control is the quality of patient care, customer service, and patient safety. CEOs can also control their costs. One very important area where CEOs can drive out costs and build value is the human capital component. There is big money to be saved in this arena. The good news is that it does not begin or end with cutting salaries.

Actually, there is an amazing amount of hidden cost in healthcare recruitment, orientation, and retention programs that never appear on a financial statement. But these costs are there, and there is a lot to be gained from examining the process, piece by piece; from position descriptions, recruitment and onboarding, to employee satisfaction and the turnover rate. Each portion of an organization’s human capital component will yield some important savings if you apply the correct performance metrics.

Focusing on this critical aspect of healthcare operations will help CEOs recognize an untapped reservoir of efficiency and good will with their employees.

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.

Or, you can follow him on Twitter at Self_JohnMarch.

Seed Newsvine

Transforming A 50-Year-Old Business Model: Executive Search Industry Faces Change

Rarely – if ever – can companies sustain long-term success using an industry business model that is essentially more than 50-years-old without experiencing a challenging transformation.

The executive search model certainly has enjoyed a long and profitable run. Yes, there have been some technological advances but by and large the search industry still works as it always has: Identifying talent for client firms and charging fees based on a percentage – usually 30 to 33 percent of the successful candidate’s first-year cash compensation.

At JohnMarch Partners, we believe that the new economy, characterized by fewer people with jobs, reduced consumer spending, a clouded business outlook due to continuing concerns over the size and role of government, and a spiraling national debt is going to play a major role in changing how search firms conduct business. There will always be executive search projects that command top fees such as those for public companies offering salaries of more than $500,000. But if 2009 has taught us anything, it is that the search business model is vulnerable.

Across the board, firms are reporting significant drops in revenue. Many smaller firms are barely hanging on, while major firms are laying off and restructuring operations.

While this transformation of executive recruitment will affect many industrial sectors, healthcare will be particularly hard hit simply because many health systems and hospitals, among the largest users of search firm services in the healthcare sector, will face major cutbacks in Medicare and Medicaid funding as part of healthcare reform. Even if reform fails legislatively, the cuts will still come, due in large part to an actuarial hell caused by a flood of new beneficiaries into the Medicare program and not enough people working to fund their claims.

For more than 50 years, search consultants have enjoyed a reasonably consistent, predictable and very profitable way of life. Nothing lasts forever. There is change in the air.

Transformation of the executive search business model is not about the discounting of professional fees but rather a focus on helping clients to identify and recruit top candidates while helping manage their talent acquisition costs with innovative approaches.

At JohnMarch Partners, we anticipated these changes. We have developed and expanded our portfolio of services that will afford health systems, hospitals, physician group practices and other healthcare providers the flexibility to select services that will enable them to achieve this important goal.

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]. He is an active member of Linked In and a frequent editorial contributor.

Or, you can follow him on Twitter at Self_JohnMarch.

Seed Newsvine

COST OF TURNOVER IN HEALTHCARE: Hidden Expense Finds The Spotlight

The cost of employee turnover, that hidden operating expense that rarely finds its way into financial statements, is in the healthcare industry spotlight as hospital and physician group practice executives grapple with ways to reduce their costs in anticipation of significant cuts in Medicare payments that are in the pipeline.

Since more than 78 million Americans will be entering the Medicare system over the next 20 years, and with the Medicare Board of Trustees projecting that the Hospital Insurance Trust Fund will be bankrupt in eight years, the outlook for more severe cuts in payments to doctors and hospitals is a foregone conclusion. While the argument is true that simply cutting Medicare payments to healthcare providers is not healthcare reform, it is an economic reality.

There are more than 5,100 hospitals in the U.S. today. Those that cannot transform their operations and dramatically reduce costs may find themselves in bankruptcy or out of business.
That is why something as mundane as reducing employee turnover is so important.

There are hundreds of studies that have analyzed the economic impact of turnover, and executive mis-hires. For nurses, the projected replacement cost ranges from $3,000 in one “conservative estimate” to more than $60,000 for a specialized ICU or perioperative clinician. The consensus estimate is between $25,000 and $45,000 per nurse.

In hospitals that recruit and train 80 RNs a year, the estimated turnover cost is between $2 and $4 million a year. When you include dietary workers, nurse aides, lab and imaging technicians in the those costs quickly move north of $5 million a year. For some hospitals, the cost of turnover is equal to their operating margin for an entire year. At one large east coast hospital, executives estimate their turnover costs are more than $12 million a year, at a minimum.

The cost of leadership turnover ranges between two to three times their annual base salary, according to conservative projections. The average CEO tenure in 2006 was only 43 months, according to a study from the American College of Healthcare Executives. At some investor-owned corporations, that average tenure is considerably lower. With an average base salary of $175,000, the cost of CEO turnover for one investor-owned corporation is more than $8.7 million. Today, that may be viewed as a cost of doing business, but in a new healthcare economy where you must reduce costs to a level approaching Medicare Minus in order to make a margin on the flood of new seniors into the program, these turnover costs will be harder for investors to swallow.

Hospitals and physician group practices are in for a bumpy ride as they work to transform themselves – with or without Congressional “healthcare reform.”

At JohnMarch Partners we have transformed our business model to provide clients with flexible portfolio of recruitment solutions that will enable them to choose all or part of our executive search process – whatever suits their needs.

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]. He is an active member of Linked In and a frequent editorial contributor.

Or, you can follow him on Twitter at Self_JohnMarch.

ahref="http://technorati.com/faves?sub=addfavbtn&add=http://healthcarevoice.typepad.com/healthcare_voice">

Seed Newsvine

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.

Seed Newsvine

Military Hospitals: A Deep Pool of Leadership Talent

CHICAGO (March 23, 2009) – As the American College of Healthcare Executives (ACHE) convenes its annual education Congress today, the military is out in force. These healthcare executives from the military’s highly regarded Medical Service Corp (MSC) run our Army, Navy and Air Force hospitals and ambulatory clinics at bases throughout the U.S. and around the world.

They are gathering with thousands of their civilian counterparts for four days of intense education covering topics such as quality, patient safety and satisfaction, physician-hospital alignment challenges, regulatory compliance, finance and even reimbursement. Military officers attend the same classes with their civilian counterparts because there are so many similarities between the two types of healthcare operations. Yes, there are some differences but those are far fewer – and minor in scope – than most civilian healthcare CEOs or their recruiters would imagine.

In addition to attending the myriad of educational sessions, many of the military personnel are here for career networking. Dozens are preparing to transition to, hopefully, a similar role in a civilian healthcare sector.

These officers are some of our best and brightest. They know how to lead. They know how to execute and produce anticipated results. They know how to work with physicians, manage to budget and compete for revenue. They have the same education and professional credentials as their civilian colleagues. Many have had the opportunity to pursue additional degrees and in-depth training programs to sharpen their leadership skills, their analytical ability, or to master the latest thinking concerning health system design and delivery.

The military does NOT cut corners when it comes to investing and developing their leaders.

Why, then, are these proven leaders not viewed as a choice “catch” for the executive teams of healthcare organizations in the U.S.?

The answer is that they face a wall – a formidable barrier -- built of years of accumulated myths, a lack of understanding of how military hospitals operate, or, often, even a preference for “safe” candidates, those candidates whose background and career path is like their own.

Some of these myths include:

1. Most military officers hold, on average, four jobs in their first seven years following retirement.

Yes, a study reported these results. However, those numbers are significantly skewed by including the officers from combat and support divisions where the command structure and leadership style are, in actuality, markedly different from the MSC, according to former officers I have interviewed and who have successfully completed the transition.

2. The military’s leadership structure, the privileges and the forced respect of commanders creates unreasonable expectations that are incompatible in the civilian workplace.

This myth usually draws the biggest smiles – even some hearty laughs – from military healthcare executives. On average, 65-70 percent of all employees at military healthcare installations in the U.S. and overseas are civilians. That fact alone illustrates why there is much less of the formal military culture in their hospitals – less saluting and less commanding personnel to perform.

3. MSC executives have a captive workforce that is compelled to follow orders. This makes running a military hospital much easier than a civilian facility.

This, too, is incorrect (See number 2 above). MSC civilian employees need and want the same type of inspiration, coaching, mentoring, and encouragement as their counterparts in civilian hospitals. Issuing commands, shouting orders, dictating performance, or other types of command behavior that is more evident in combat units does not work in military hospitals, Walter Reed included.

4. Military healthcare executives do not understand civilian labor relations issues.

Not true. Surprisingly, the civilian workforce at military hospitals in the U.S. and at many bases around the world, are unionized. Colleague and friend, Col Tom Driskill (retired), who was Chief of Staff at Walter Reed and Trippler Army Hospital in Honolulu, among others, said that labor negotiations in the military could be every bit as tough as those in a civilian closed shop union environment. Officers who do not maintain effective labor relations will have a tough time meeting their performance targets, and this could materially affect their career outlook.

5.The military does not hold its hospital executives to the same standard of accountability.

This myth is wildly off target. MSC officers know that they might survive one bad performance review, but not two. Two poor performance reviews typically means you will not advance to the next rank. In the military if you do not advance, you retire, you are asked to leave or you are forced out. If you do not qualify for retirement at that point, you will lose everything that you have invested in your career investment.
The military’s culture on accountability is tough. It is unforgiving. And it is very different from the civilian hospital culture where the “up or out” mentality does not exist. While this can potentially create transition problems for some officers, this can be handled through an effective “onboarding” program.

Are there bad leaders in the MSC? Yes, as is certainly the case within civilian healthcare organizations. Nonetheless, civilian leaders need to take a hard and long look at the MSC’s deep pool of talent. They will find great leaders with solid work experience who can and will deliver exceptional value.

They are, after all, among our best and brightest with solid work experience.

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 leadership experience in public relations, national marketing and business development and as Chief Executive Officer of hospitals, and consulting firms, Mr. Self is highly regarded for his keen insight into business culture and the types of leaders who will succeed. You can contact Mr. Self at 214.220.1234 or [email protected].

Somewhere in Tupelo, Mississippi...

ANN ARBOR, Michigan (March 18, 2009) I am at the University of Michigan to speak to graduate students in the nation's top ranked healthcare graduate management program. My host is outstanding teacher and friend, Dr. Christy Harris Lemak. Over dinner, we exchanged stories about our beloved industry, the leaders who have contributed so much, and some of the funny stories that we have encountered through our disparate careers.

As we enjoyed a wonderful meal, I mentally recalled one those classic moments that, if it had been told on the Tonight Show with Johnny Carson by someone with far more talent than me, would have made that infamous anniversary show reel of spectacular highlights.

It was a wonderful, hilarious moment for me. For the "victim," the newly appointed Director of Materials Management at Methodist Hospital in Memphis, it was a bleak, career limiting moment.

The year was 1978. I was the national marketing manager for Rocky Mountain Helicopters' hospital based air ambulance program. I just had lunch with Texan Chester Ayres, a vice president of the Methodist system who had once worked for LBJ at his Austin television station. We had just returned from a lunch where martinis had been consumed. We were both catching flights -- me to LA for a closing dinner at Memorial Medical Center in Long Beach. Chester was flying to New York.

We returned to the Methodist Hospital central unit to fetch my luggage. We had plenty of time, but Chester, a Texan with the bark on, who still had plenty of political stories to tell, wanted to get to the airport so we could continue our conversation over additional adult beverages. Standing between my luggage and Chester's determination to get to the airport was the aforementioned Director of Materials Management, holding court in the main hallway wearing a flashy plaid sports coat on his first day on the job. When he found out who I was, he immediately launched into a lecture on how he was going to control the bid and specification process. Once he got started, he would not shut up. Chester became more impatient by the moment. Finally, he started rubbing the lapel of this awful plaid jacket.

After a few minutes, this fashion king stopped talking – thankfully – looked down at Chester’s hand and asked: “Do you like my coat?”

Chester quipped, “Son, somewhere in Tupelo, Mississippi there is a '57 Chevy that ain’t got seat covers.”

Sudden Silence. I grabbed my bags and we fled the scene. We made it to the airport in time for one more great story about former President Johnson. On the down side, I don’t think the new Director lasted too long at Methodist.

Life is full of amazing stories. And some very clever punch lines. In these tough times, we need to remember that important fact.

Listen for the stories and laugh when you can.

John G. Self, Chairman and Founder of JohnMarch Partners, is the Firm’s senior client advisor. A 32-year veteran of the healthcare industry, he is a former investigative reporter and crime writer for a major daily newspaper. Candidates and clients say he is one of the most thorough executive recruiters working in the healthcare industry.