Every hospital has access to the same technology and process advancements. Not all achieve their goals. I’ve worked with enough hospitals to know that the most important predictor of performance is the strength of the leadership group. This is even more so the case today as we face the shifting sands of healthcare reform. A few variables are making it even more difficult:
- Increasing Turnover. Healthcare executive turnover is high and increasing. Average CEO tenure is just over five years.
- Increasing Compensation. Hospital executive pay continues to increase rapidly. Bringing in a senior leader, even at the Director level is a significant investment.
- Increasing Risk. The demands on hospital leaders are more diverse, and more intense, than ever before. From a recent article in Becker’s Hospital Review: “Hospital administrations and executives are experiencing, and will continue to experience, increasing changes to the healthcare system. Accountable care organizations, bundled payments, physician alignment, health IT initiatives, service line affiliations, reducing readmissions — they all create a carousel of issues that hospital executives must be able to balance. “
A bad hire, at this critical juncture, will adversely impact not only an organization’s current performance, but its future, and perhaps, its survival.
- Unique Leadership Demands. More than other industries, the healthcare executive must accept that those around him or her are the real experts. The various hospital functions and technical components are beyond the ability of any single hospital leader. They can never understand the intricacies of all hospital clinical, technical, operational and financial functions. Each area/profession has a great deal of autonomy. Then add the complexities of the independent medical staff that drive much of the business and revenue but is not immediately accountable to hospital leadership.
- A shortage of talent. On top of all of this, it is becoming more difficult to find talented individuals with the right mix of skills and experience.
Even in the best of times, healthcare’s approach to identifying, selecting and developing leaders has been less than ideal. Perhaps we were able to get away with it when margins were good, physician-hospital relationships weren’t so dynamic and challenging, no one was tying payment to quality, and developing completely new care delivery and payment models.
The traditional hit or miss approach simply won’t cut it anymore. There is too much at risk. Why wouldn’t an organization want to bring as much objectivity as possible to this process? Other industries would never leave these decisions to chance. Just like we are adopting new technologies and processes from other industries, it’s time to adopt their more diligent, and successful, approaches to selecting and developing, leaders.