5 Things the Most Extraordinary Hospital CEOs Do

There isn't a trusted scorecard to accurately assess a healthcare CEO's performance. But there are a handful of skills the most remarkable leaders know and demonstrate every day in the C-suite. Quint Studer, founder of Studer Group, says he's observed five skills and abilities that the most effective hospital and health system CEOs predictably demonstrate.

1. Extraordinary CEOs objectively diagnose the organization's ailments. The ability to properly identify and assess problems is the foundation of healthcare. Much like physicians and other healthcare professionals, CEOs are expected to properly diagnose the "illness" before they can apply the "cure."

The best hospital and health system CEOs objectively identify problems within their organizations and constantly push employees to improve or maintain top performance. Why isn't this a habit among all CEOs? Proximity and poor estimation, says Mr. Studer.

"Leaders can sometimes be 'too close' to the organization to objectively assess its performance," he says. "As a result, they'll overestimate and think their leadership and the hospital's performance is better than it is."

For example, in a recent Studer Group survey based on responses from more than 300 hospital and health system CEOs, a number of leaders identified clinical quality of care as their organization's number one strength. Upon closer inspection of those organizations' quality metrics and information, Studer Group found many of those CEOs had overestimated their clinical performance.  

Such overconfidence is fairly common among CEOs, he says, and it's a major flaw that will wreak havoc throughout the hospital or system. "Top CEOs have a responsibility to objectively self-assess themselves and their organization," says Mr. Studer. "That's critical."

2. They drive variability out of leadership. Much has been written about variation within healthcare delivery and clinical care, but variability within management and administration has received far less scrutiny. That's too bad, says Mr. Studer, as leadership inconsistencies at any level can harm employee morale, turnover, talent selection and hiring.

"When we ask CEOs to evaluate their senior leadership teams, we ask them to measure consistency in system-wide leadership practices on a scale of one to 10," he explains. "The average we see is a 5.5. We recommend CEOs and senior leaders sit down and decide which leadership practices are absolutely mandatory — and then, standardize them."

One common problem? Meetings. "There are too many meetings that are too long and not well-organized," says Mr. Studer. "Yet, despite these problems, most leaders do not follow meeting templates or agendas. When inconsistencies like this linger at the top of the organization, they tend to trickle down throughout the rest of the hospital or system."

What's more, a single executive who strays from standardized procedures can hold the entire organization back. Mr. Studer says he worked with 11 executives at an organization that wanted to reduce its turnover. Even though turnover decreased and stabilized, the rate was still higher than what the organization set out to reach. "When we dug into it, we found we had one senior leader who didn't follow the new program," says Mr. Studer. "The turnover rate stagnated because that senior leader wasn't following agreed-upon practices."

3. They align their outlook with their organization's outlook.
Say you called 20 hospital CEOs and another 20 hospital managers, supervisors and directors and asked these two groups, "Will the healthcare environment in the next five years be very difficult, difficult, the same, easy or very easy?" Mr. Studer says most CEOs and executive team members respond with "very difficult" to "difficult," while managers are more likely to say "difficult" to "the same."

CEOs and managers have different responsibilities and workloads, so it is to be expected that their outlooks will not match. Yet, this gap in urgency can ultimately make an organization fail. Narrowing this gap comes down to how well CEOs communicate the pressures their organizations face in the moment, as well as those that are on the way.

"CEOs must communicate the healthcare environment to every stakeholder so they can align their sense of urgency," he says. "You can't be successful if four out of 10 leaders aren't willing to change."

4. They don't underestimate how change affects employees. Recently, Mr. Studer visited a hospital that was constructing a new multi-million-dollar facility on its campus. He noted how closely hospital management followed the construction process and tracked its progress. Yet very rarely is such steady and detailed attention paid to changes or initiatives among employees, he points out.

"We micromanage construction projects but we don't micromanage human processes," says Mr. Studer. "That's a mistake, because human change is the key to everything."

Mr. Studer describes four categories of employees. First are the unconsciously incompetent, or those who don't know what they don't know. Then there are the consciously incompetent, or people who know what they don't know; followed by the consciously competent, who are beginning to master the process; and finally the unconsciously competent. Processes come naturally to this last group. They can cook a dish without looking at the recipe.

A major misunderstanding in healthcare management is to assume the organization's high performers, or the unconsciously competent employees, will have the easiest time changing their processes. The best CEOs know this is not so.

"High performers have been doing that process for such a long time, it's become a habit," says Mr. Studer. "They already feel successful, so what they don't want to do is go backwards and feel like they're starting over. CEOs can underestimate how hard a change will be, even for high performers."

This dynamic can explain why a hospital's top-performing physicians may have such a difficult time adjusting their workflow or working with new electronic medical record software, for instance. The four categories also apply to executives, and Mr. Studer says CEOs can apply the same test to their senior management team to determine how each member might react to change.

The most remarkable leaders in healthcare understand the complexity involved in change and take it very seriously, adds Mr. Studer.

5. They consistently manage employee performance. By communicating and upholding clear expectations for direct reports, CEOs can drive a culture of accountability that permeates the entire organization. Tolerating low performers is a fatal flaw for all organizations, but especially for those in healthcare that hold patients' lives in their hands. And along with their ethical obligation to patients, hospitals should address low performers so they do not bring other employees down.

"When we do surveys, we typically find that 8 percent of the people in an organization are not meeting performance expectations," says Mr. Studer. "And 50 percent of that group are not in any performance counseling. There is no documentation in their file showing any form of corrective or disciplinary action."

Incidentally, Studer Group studies have found organizations with leaders who report a high number of low-performing employees also have lower HCAHPS scores.

Part of creating a highly reliable organization is consistently addressing low performance, from the senior level team to hospital staff. The best CEOs uphold the value of accountability to drive performance management throughout the organization.

"These five things not only set a CEO apart from the rest in terms of leadership and vision, but also make our hospitals and health systems safer, financially stronger and more able to quickly respond to the changes facing today’s healthcare industry," says Mr. Studer.

More Articles on Hospital Leadership:

7 Hospital and Health System CEOs: What Disruptive Innovation Means to Me
Health Reform in 2013: What's Happened, What's Left & What it Means for Providers
11 Most Pressing Issues for Hospital CEOs

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