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A Methodical Approach to Deepening Your Leadership Team’s Bench Strength

HealthLeaders magazine, July 13, 2011

Panelist Profiles

Doug Smith
President and CEO
B. E. Smith
Lenexa, KS

Alan Bradford
Chief Human Resources Officer
Baptist Health System
Birmingham, AL

Veronica Zaman
Corporate VP of Talent Management
Scripps Health
San Diego, CA

Thomas A. DeBord, FACHE President
Summa Barberton Hospital
Summa Wadsworth-Rittman Hospital
Barberton, OH

Philip Betbeze
(moderator)
Senior Leadership Editor
HealthLeaders Media
Nashville, TN

Sponsored by:

BE Smith
www.besmith.com

Roundtable Highlights

HEALTHLEADERS: How important is developing senior leadership continuity, and how do you do that in the face of unplanned departures?

VERONICA ZAMAN: Succession planning has probably never been more important than it is now with the ambiguity surrounding healthcare reform. We've undergone almost a 10-year process of identifying our interim talent because it's expensive to replace good talent with the volatility in the market today. We have found that the discussion and the transparency around what we're doing related to succession planning has just been a jump start. A lot of our talented frontline managers, directors, and those young VPs that are just starting off really seem energized by the fact that they could come to a place like Scripps Health and have a full career there. In fact, a lot of our literature talks about career destination. We really do take that seriously. We want you to join us and build your career at Scripps. And we go internally first when we look at replacing anyone, especially in our more senior levels.

THOMAS DEBORD: All of us have worked really hard to build confidence in our brand within our communities, and having folks in place who can step in is essential to maintaining the trust that the community has in that brand. We have a lot of folks who want to have that sense of belonging in an organization. I started at Barberton almost 23 years ago as the director of accounting and here I am as the president now. It was because I was given opportunities. I worked hard and I felt like I deserved to get the opportunities, but I had somebody helping me along the way.

DOUG SMITH: With healthcare reform, succession planning is low-hanging fruit. If you're not going to get good at succession planning, you're going to have trouble competing. Succession planning does instill a brand in people. Also, it instills a certain amount of pride and it establishes a strong culture, which bleeds into strong satisfaction from patients, improved metrics for quality of care, job satisfaction, and engagement.

ZAMAN: About a year ago, Chris Van Gorder, our CEO, turned our organization on its side organizationally. We're five hospitals and had operated as very independent hospitals. Even though we were a system, we didn't have a lot of standardization and our folks couldn't move around. We have what we call a horizontal operations team now. I'm one of those horizontal folks, but the focus was really on the hospital operations. We pulled our VP of operations from the sites, leaving our chief executives at the site along with the chief nursing executives. We pulled out the VPs and made them horizontal corporate VPs and stepped them into a service-line concept. What we're seeing with our horizontal alignment now is that the system is pulling together and we are achieving standardization. We did it to start to incentivize and to build that next level of executives and to start to groom, mentor, and coach that talent.

SMITH: When we look at the demographics now of folks who are in their first five to eight years, it's a reality that they'll have seven jobs in their career with seven different organizations. So how do we battle that trend of lack of continuity in the context of succession planning? We've focused on that top third of performers within our group, and that's where we are investing our resources. We've had to put a significant amount of discipline around doing it continuously and we have found that our retention among that top third has started to far exceed the rest of our peers.

ALAN BRADFORD: We have a pretty rigorous process for identifying talent. The performance appraisal is the start. But we have a calibration process in which the senior leaders participate, and within that calibration process, we look at competencies and at performance and results. We look at how they have followed through on their talent management plan, how they invested in themselves in addition to what we are willing to invest in them.

HEALTHLEADERS: Isn't it easier to pick up the phone and call a search firm?

ZAMAN: Yes, but then you can't promote from within, and that's important to us. We started to look much more in detail at how we actively looked at promoting from within. We had been much like the traditional organization: Pick up the phone and call the search firm, especially for some of the more hard-to-fill positions. In the last five years we've targeted internal hiring. Our talent line assessment tool, which years ago we only used on senior people, we use on everyone to start to tap into that unknown potential talent.

SMITH: When I first came into the industry I recall the number being 60/40—you recruit 60% of your employees from the outside and 40% from the inside. I'm predicting it's going to look more like 25/75—75% from the inside and 25% from the outside.

HEALTHLEADERS: What's the balance between HR's role in developing educational opportunities versus senior leadership's role?

BRADFORD: Senior leadership, starting at the board, has to support it and be the advocate for it. Many organizations, if you talk to some of our peers, in 2008 they cut every training and development dollar they could find. That's a huge risk. Without that advocacy, you're not going to have the funding to do it or the interest. Fortunately we have a board and a CEO who listens and understands that the cost of not doing it far outweighs the cost of doing it.

DEBORD: It's collaboration between HR and senior leadership. HR certainly has an infrastructure to help make sure that it happens, but it takes the senior leadership and the board to have that vision to make sure that we're driving it through the organization. At Summa, Tom Strauss, our CEO, actually teaches a four-hour class called Servant Leadership. Most of our education is internal. You need senior leaders teaching the classes.

ZAMAN: I'm not an HR person, but what we brought into HR was someone who had the strategic operations and the clinical knowledge base. When the economy took its dive and everyone was looking at saving money, Chris came forward with two mandates. One was that we would not have layoffs. The second piece was that we would continue to support learning and development because without that deep dive into learning and ensuring that we were continuously developing our teams, we would not be successfully positioned in the future. That has allowed us create a continuous learning environment. It's not just about classroom teaching; it is about how you take the knowledge and the development and the learning that we're providing to the bedside.

SMITH: I've been part of cutting training dollars and I've seen my clients cut training dollars. Traditionally, training has been very expensive and we needed to find a way to lower costs but still have the same outcomes. Essentially we've mobilized internally to do development, so the cost has come down, but the return in value has probably increased. The rule of thumb has been that for each dollar invested in development, you get nine dollars back. Today, the input cost is less expensive and the output may have doubled.

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