As a healthcare executive whose mission is to consult organizations during transition periods, I’ve found there’s a common denominator in nearly all of the healthcare organizations I’ve served. As an interim CEO or CFO, making hard and even unpopular decisions is part of the territory. My function is to identify issues, work toward consensus, help stabilize and pave the way for the permanent executive(s). By working on-site and full time, issues that are “under the hood” rattle like a silver, twin-bell alarm clock.
As many reflect in anticipation of the New Year, it seemed like an ideal exercise to review my assessments for any trends. Perhaps by bringing these into the open, healthcare organizations can be aware of possible culprits.
Some of my clients are surprised to hear the roots of their organizational issues are buried in governance and/or culture.
By nature, healthcare leaders tend to be problem solvers who react to given crises. When issues arise faster than executives can solve them, performance declines and turnover increases. Although focusing on fixing the problem is tempting, it can be more vital for the remaining leadership team to take heed of the governance or culture that allowed the problems to develop, exist and persist.
When we address issues that pertain to governance and culture, “problems” usually dissolve.
What is governance?
Set in the board room, governance relates to the tone and direction of the organization. Governance can make or break the leadership team. In healthy governance:
- The organization’s vision and supporting strategic action have direction.
- Board members provide ample support.
- The board provides adequate feedback to ensure the leadership team is on track.
- The board seeks resolve and presents a united front (even though disagreements can occur behind closed doors).
I worked for a hospital system with a representative-style board. That is, instead of board members pledging to their fiduciary duties, they represented diverse, divisive factions. Unfortunately, a rating agency noted this organization had the highest CEO turnover at the time in the U.S. healthcare industry. When an organization has individuals in leadership positions who may pursue their self-interests instead of the organization’s mission, there are bound to be problems.
What is work culture?
Culture can be described as the collective attitudes and behaviors characteristic of a particular social group. We can relate it to an organization’s values and morals. Many things unravel when a culture becomes toxic. In this context, we’re talking about an environment that has become flawed to the point that dysfunction is the organization’s sense of normalcy.
Organizational performance can be measured by calculating the sum of performance of everyone in the organization, including leadership. Work ethic declines when employees see tolerance of substandard performance and bad outcomes among peer leaders. It follows the domino effect. They ask, “Why should I take risks and work above the minimum requirement if my organization isn’t holding anyone accountable?”
Symptoms of decline
Some examples of a culture heading south include:
- Increasingly complex and expensive problems (e.g., material)
- Unfavorable accounting adjustments and restatement of audits
- Joint Commission citations
- Reductions in employee, patient and physician satisfaction
- Poorer clinical outcomes
- CEO turnover
The power of a good culture
A good organizational culture builds momentum. Leaders improve their performance and their peers challenge them to keep getting better. People like to win. A winning team naturally will cleanse itself of toxic losers because they poison the culture well and drag down the entire team.
How can we change our organization’s culture?
Unfortunately, I’ve learned that changing a toxic culture without introducing a new cast of characters is a fool’s errand. In order for culture to change, people must change. For better or worse, we are who we are and generally resist change.
The TV character Adrian Monk said, “I don’t mind change. I just don’t want to be there when it happens.” Along these lines, I highly recommend Change or Die by Alan Deutschman. This book documents the research of Dr. Dean Ornish, a professor of medicine at University of California. Dr. Ornish found that even when faced with a virtually certain prognosis of death, only a very small proportion of people change destructive lifestyle habits.
If humans generally won’t change their ways when faced with a death sentence, what makes us think they’ll change when it involves their employment?
The secret is reflection. If your organization faces recurring issues:
- Be proactive; stop chasing problems.
- Turn your attention to the board room and leadership team.
- Assess your organization’s level of accountability.
- Get the right team on the field.
- With your new players in place, support, encourage and hold them accountable.
Turnarounds aren’t easy. But in the long run, your organization, board, staff, patients and community will appreciate the change.
Raymond A. Snead, Jr., D.Sc., FHFMA, FACHE, offers more than 40 years of experience. He has served as interim executive and interim CFO in a variety of healthcare‐related enterprises and healthcare organizations, where he also consulted. His doctorate in healthcare administration dissertation, “The contribution of interim executives to the healthcare industry,” was the first ‐‐ and remains the only ‐‐ research of its type in the healthcare industry. Reach him at 904-606-5744 (office) or email@example.com.