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Encourage and Develop a Culture of Innovation

Philip Betbeze, for HealthLeaders Media, August 10, 2009

A "hunkering down" mentality has crept into boardrooms and executive suites across the nation.

Recently, healthcare organizations have spent time and energy looking for ways to shave costs. Layoffs of valued employees have followed, and in extreme circumstances, entire service lines are being looked at as a way to trim the fat as reimbursements have declined.

But cutting the fat will only get you so far, says Matt Krathwohl, executive director of performance at Memorial Hospital South Bend, and featured "Culture" panelist at the HealthLeaders 09: Hospital of the Future Now conference in October. It's a short-term solution to a long term problem, which is to say, not a solution at all.

Instead of focusing on cost-cutting, Krathwohl and the executive team at South Bend believe that the independent hospital's long-term survival depends on innovation. To that end, in conjunction with South Bend's board of directors, Krathwohl has developed a program called Innovisits, in which key hospital employees take structured visits to companies outside the healthcare industry to learn different ways of approaching problems that are common to all organizations.

"That's one of our goals--to bring strategies from outside healthcare to healthcare," he says.

Teams of 3-4 people have visited such longstanding business luminaries as Procter & Gamble and General Electric, "but we've found that small companies are much more nimble," he says. Not to mention that they are more similar in size to South Bend as well

One of the hospitals board members is also on the board of a community bank which had done pioneering work at one of its branches in developing a positive and rewarding customer experience program.

"They're a service business, as is healthcare, so learning the things they did has helped us," Krathwohl says. "We took a team of 3-4 people, talked to the team members of the branch and learned from them about how they are more competitive now."

In service to the innovation goal, South Bend has created an "innovation center," called the Day of Innovation Café.

"Say you get back from another conference and you've heard some great innovators like Tom Peters or Jack Welch," says Krathwohl. "But then you get back to your desk and it's back to business."

"So what do you do with that information? How do you implement change? We help them translate."

The hospital has also developed an "Adventure Center," "where we seek strategic relationships with companies inside and outside healthcare. For instance, he says, "why do we want to build back-end systems when we could find a strategic partner?"

Why indeed? Anyone can cut costs. It takes leaders to innovate your way to a solution to expensive problems.


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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