ISE Magazine February 2019 Volume: 51 Number: 2
By Casey Bedgood
As the healthcare industry continues to evolve and adapt to high levels of uncertainty due to reimbursement structures, governmental regulations and ever-changing customer expectations, the industry is unknowingly redeﬁning the basic qualities and requirements of its leaders.
Over the last few years, the healthcare industry has arguably seen more change than any other time in history. Subsequently, more is demanded from leaders than ever before as reimbursement has declined, costs have increased and customer requirements have become the centerpiece driving future relevancy, or lack thereof.
Much of the healthcare business portfolio is shifting from traditional brick-and-mortar hospital-based care to newly adopted retail and technology-driven healthcare delivery models. The old perspective of “build it and they will come” is quickly evolving into strategies around taking care models directly to customers in venues, locations and for prices they prefer.
As a result, the healthcare industry has seen near record turnover rates among top leadership as the new requirements of the market and customers, in addition to the rate of change required to maintain market relevancy for hospitals and health systems, has outpaced the ability of some leaders to adapt in markets across the country. Recently, one of the industry’s top national information-sharing outlets re-ported that CEO turnover was hovering around 20 percent nationally.
Thus, the new tagline regarding healthcare leadership is transformation related to integrating innovative visions for continuous change, global or system approaches to change management and the ability to pivot organizational direction and outcomes with minimal time and resources.
deal high-performance state, barriers to change
In healthcare, the main focus is achieving excellence in service, cost and quality of care provided to customers. Fortunately for consumers, but unfortunately for some providers, only those organizations able to achieve goals for service, cost and quality will determine their own destiny and ensure long-term relevancy. Once goals are attained, the enterprise must be able to reach for higher levels of success, eventually performing in the 90th percentile.
Another vital element of high performance is knowledge transfer within the organization. As healthcare market disruptions increase, higher performing organizations are tasked with developing innovative methods to share knowledge with internal stakeholders, external customers, potential partners (i.e., former competitors/potential future partners) and other industry-leading healthcare enterprises.
Recently, a large multihospital complex health system in the South-east embarked on two required sys-tem level changes simultaneously by pursuing ISO 9001:2015 certiﬁcation while implementing a new document control system. Both initiatives were completed in 15 and 16 weeks, respectively. The ISO efforts required stakeholders to produce over 20,000 deliverables over the 15-week period, while the document control system implementation for 12,000 documents required over 120,000 deliverables in the ﬁrst six-to-eight weeks of implementation.
Both endeavors were required regulatory items intended to pivot the organization toward high performance and drive signiﬁcant outcomes in service, cost, quality and safety. Although these initiatives were successful after a lot of hard work, the change curve for the organization denotes that 50 percent of the organization was the catalyst for change, 40 percent was resistant and the remaining 10 percent was change neutral.
Much of the resistance to change in healthcare is related to the hierarchical bureaucratic nature of the business model and decades-old cultural perceptions that hospitals of old will always be the desired destination. In the last few years, evolving customer requirements, technological advancements and ﬁnancial downward pressures have proven healthcare organizations that cannot change quickly, innovate to route market disruptions and implement transformational change quickly will face ﬁnancial insolvency and an uncertain future. Trans-formational healthcare leaders of the future will have to ensure organizations remain nimble, actively pursue change and scan the horizon for transformational growth opportunities.
The transformational leader of tomorrow
The instability and evolution of the healthcare environment leads to the question: What core competencies must current and future healthcare leaders master to achieve and sustain long-term relevancy as leaders while the industry evolves? The transformational healthcare leader must possess, integrate and master at minimum four core competencies as follows:
Process improvement expertise. In today’s healthcare environment, change management is fast becoming one of the most valuable skills in the market as organizations are required to reduce costs (i.e., waste), improve proﬁtability, create efﬁciencies and achieve high customer satisfaction faster and at higher levels. These attributes are no longer valuable just for internal organizational turnarounds or optimization but are highly prized to prime health systems and hospitals for strategic partnerships, including, but not limited to, joint ventures, mergers and acquisitions.
Master transformational leaders such as black belts should be measured on results they achieve based on a seven-point scale. The ﬁrst three points are tied to basics of completing the black belt course, passing the rigorous exam and completing a successful project within one year of course completion with signiﬁcant cost savings. The next phase of black belt mastery relates to impacting the industry outside of the four walls of the organization by publishing initial project results in a national venue to share knowledge and allow others to learn from the experience.
After publishing comes high level black belt functions such as compiling a list of successful cross-functional projects, impacting measurable change outside of the black belt’s area of comfort (i.e., business unit) and saving many times the change agent’s salary within the ﬁrst few years from receiving the credential. All seven tollgates are equally important and essential for transformational leaders to drive and sustain successful cross-functional change in today’s complex health-care environment.
Operational experience. The transformational leader will need in-depth knowledge of healthcare operations ranging from ﬁnance, leadership and support services to regulatory requirements and how these respective functions integrate. The true value of this characteristic is measurable operational results such as leading signiﬁcant turnarounds in key performance indicators, facilitating high levels of change among many leaders and staff, and creating or shaping a vision for change management programs across complex systems with signiﬁcant beneﬁts. Holding a position with a title no longer sufﬁces; the ability to achieve results in tough environments has become the minimum bar.
Clinical experience. To lead transformational change, healthcare leaders will need a minimum of a few years of clinical exposure with high levels of competency in patient-facing environments. The base of healthcare delivery models is clinical services; top leaders who do not possess a ﬁrsthand understanding of how executive decisions impact patients will ﬁnd it difﬁcult to become transformational leaders and change agents. Clinical experience also provides great insight into how support services such as pharmacy, supply chain, ﬁnance and others play a crucial role in ensuring customers receive high quality services at the right time and place and for the right cost, which is essential to long-term organizational relevancy.
Integration of operational prowess, clinical expertise and process improvement capabilities. The ideal transformational leader will have to master all three attributes and to integrate them at a moment’s notice to drive excellence in service, cost and quality of services. A lack of mastery in any one area or a combination of the three will hamper leaders’ abilities to achieve and exceed goals, innovate to disrupt markets and competitors, create and foster strategic partnerships and pivot and adapt to unexpected market changes along with sharing knowledge. All are required to attain transformational change for the organization, industry and customers.
Unlocking the code to transformation
Step one in becoming a transformational leader is to complete a self-assessment based on the four foundational requirements of mastering operational experience, clinical expertise, process improvement capabilities and being able to integrate these elements to drive transformational change.
The ﬁrst priority is to ﬁll any identiﬁed gaps with training, experience, coaching and mentoring from a proven transformational leader. (Editor’s note: IISE, for example, offers lean and Six Sigma green and black belts for healthcare.) Eliminating these gaps will ensure a path to long-term success and viability. Ignoring the voids will increase the likelihood your career will become a casualty of the healthcare “war” currently re-shaping the landscape.
Master the art of communication both incoming and out-going. The start and ending point for all transformational leaders in the current environment is to engage the voice of the customer, both internal and external. The true test for transformational change is being able to measure, meet and exceed customer requirements when, where and on the terms they expect. Being quick to listen and slow to speak will ensure the aim of change is on target and will achieve results. Once customer input identiﬁes the direction of de-sired change, leaders should artfully craft the future state and cascade this to all stakeholders to ensure buy-in, engagement, success and to avoid resistance to change.
As leaders and organizations pivot from business-centered to customer-centric perspectives, they will have to recon-sider the basic leadership requirements for those chosen to lead, guide and transform their business. Organizations seeking long-term market relevancy will need leaders with the ability to transform clinical and operational environments by producing high quality outcomes in short time frames with minimal resources in highly complex organizations.
These leaders will be required to masterfully integrate process improvement, operational experience, regulatory knowledge and clinical perspectives to ensure the enterprise not only survives but thrives in the new healthcare world. It is important to note that experience alone will no longer ensure transformational change. The new focus has shifted to the measurable results achieved by leaders and their ability to integrate various attributes to drive outcomes in cross-functional environments. The key to transformational change is the integration of the various disciplines, skills and knowledge bases.
Unfortunately, as in the days of old, these core competencies will no longer be able to stand alone. Successful change agents will be able to integrate all facets of healthcare de-livery and produce signiﬁcant outcomes with minimal re-sources.
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