Healthcare executives today are expected to achieve significant progress on a wide range of goals. For many, this means managing a large portfolio of clinical, financial and strategic initiatives.
Unfortunately, many healthcare leaders struggle with managing multiple projects at the same time. The solution is not to work harder but to work smarter by mastering three leadership “levers.”
1. Top-down Strategic Alignment
The heart of every successful initiative is a strategic vision for improving performance. But just because you have a strategy, it does not mean you have strategic alignment. Many initiatives fail because they are not aligned with the organization’s true strategic priorities.
For example, a surgical services director launches an initiative to expand same-day surgery in the hospital OR; however, the C-suite strategy is to increase quality and reduce costs by shifting same-day procedures to ambulatory surgery centers and focusing the inpatient OR on complex, high-revenue surgical service lines. Sooner or later, the director’s same-day surgery initiative will collide with this strategic obstacle.
To leverage top-down alignment, the OR director could focus instead on reducing clinical variation in complex inpatient surgeries. Success here would improve quality, outcomes and profitability in the procedures that are becoming the heart of inpatient strategy.
The principle of top-down alignment also applies to financial strategy. All directors and managers must be aware of the organization’s strategic financial plan, which is a subset of the strategic plan. The most common pitfall here is failing to show how an initiative will deliver return on investment.
Assume the OR director described above aims to create a spine surgery program focused on advanced minimally invasive techniques. So far so good, since this is aligned with the strategic plan. The director’s pro forma financial statement for the program shows an average ROI of 18% per year over five years; however, finance leaders point out that the pro forma fails to account for capacity issues. Once they factor in a required $3 million capital project to build another surgical suite, the ROI is reduced to 2%. This initiative will not get a green light.
For a counter example, look once more at the clinical variation reduction project noted above. Under many realistic scenarios, an initial outlay of approximately $200,000 could yield an apparent ROI eight times that amount—and the clinical goal ties into the strategic plan. This is a pure example of top-down alignment.
2. Bottom-up Change Management
Another reason healthcare projects fail is that they do not have the support of the individuals impacted by the initiative. Effective leaders know how to propel initiatives forward by creating and leveraging “bottom-up” support. Three steps are key:
Identify the “burning platform:” Begin by working with stakeholders to articulate the problems with the status quo, and then convene facilitated sessions for different stakeholder groups to build the case for change.
Articulate the future vision: The ideal vision helps everyone see and understand how an initiative will change both their work and the outcomes they achieve. This can be accomplished by showing how the initiative will impact people, processes, technology, financial outcomes, patients and the community. A strong vision includes targets for specific performance measures, demonstrating how the current-state problems highlighted in the burning platform will be resolved.
Fill in the activation plan: Start with a high-level timeline showing key milestones, and then work with project managers and select stakeholders to fill in the details of execution and gain leadership approval.
3. End-to-End Measurement
Most healthcare leaders know the aphorism “You only get what you measure.” Many initiatives, however, lack a comprehensive plan for collecting and sharing measurement data. To increase your initiative’s probability of success, consider the following:
- Establish both process metrics (such as percent project completion) and outcome metrics (for instance, percent reduction in direct costs).
- Determine the data sources for each metric as well as the frequency of reporting progress against goals.
- Regularly communicate results to all providers and staff impacted by the initiative.
Depending on the project, choose between eight and 12 metrics for setting goals, optimally from verifiable benchmarks. Selected metrics should represent relevant impact areas (people, processes, finances, etc.), and they should be the most important measures that the organization wants to achieve.
The best way to leverage end-to-end measurement is to create a performance scorecard that highlights key metrics and goals and tracks individual and group progress.
For example, scorecards are very effective at communicating cost and quality goals to physicians. Scorecards show providers how they compare monthly to targets for each metric and how they are trending. Well-designed scorecards also highlight how providers compare to their peers (blinded or unblinded). In our experience, physician scorecards can drive significant improvements in very short timeframes, typically three to four months.
Finally, make it a habit to test the assumptions behind these metrics. Directors and managers should reassess their targets and outcomes on a regular basis, perhaps quarterly or half-yearly depending on the importance of the metric.
Rising to the Occasion
The healthcare industry is demanding more of its leaders than ever before. By mastering the skills of top-down strategic alignment, bottom-up change management and end-to-end measurement, healthcare executives can both increase their personal effectiveness and improve their organizational results.
Source: From an article by John Malone, principal (jmalone@luminahp.com), and Steven Berger, LFACHE, FHFMA, principal (sberger@luminahp.com), Lumina Health Partners, Chicago.
Editor’s Note: A version of this article was published in the March/April issue of Healthcare Executive magazine.