Creating an Environment of Excellence: Q&A With Henry Ford Health System CEO Nancy Schlichting

Nancy M. Schlichting is CEO of Henry Ford Health System in Detroit, a nationally recognized $4 billion healthcare organization with 23,000 employees. Henry Ford Health includes the 1,200 member Henry Ford Medical Group, five hospitals, the 600,000-member Health Alliance Plan, 32 primary care centers and many other health-related entities located throughout southeastern Michigan.

Nancy Schlichting discusses how Henry Ford Health System remains top-performingIn November, Henry Ford was named a 2011 Malcolm Baldridge National Quality Award recipient, one of America's highest honors for innovation and performance excellence. Henry Ford was one of only four 2011 recipients and the only organization awarded in Michigan. Henry Ford was also recently selected by the National Quality Forum and The Joint Commission to receive the prestigious 2011 John M. Eisenberg Patient Safety and Quality Award. Henry Ford is one of two honorees nationwide in the Innovation in Patient Safety and Quality local level category.

In order to lead a large, award-wining health system, Ms. Schlichting, administrators, medical staff and Henry Ford employees work to create and maintain a culture of excellence. They emphasize accountability, transparency and effective communication. Here Ms. Schlichting discusses how creating an environment of excellence with employee engagement and clinical achievements positions Henry Ford as a top-performing health system year after year.

Q: The Baldridge Award is one of America's highest honors for innovation and performance. It clearly indicates Henry Ford's position as a great health system. What did that recognition mean to you and the Henry Ford system?

Ms. Schlichting: Receiving the Baldridge award was an incredibly powerful experience and an amazing way to recognize our employees. When the Baldridge representatives came to Henry Ford for the site visit, they talked to about 1,200 individuals. You cannot cram for or fake that — the employees were genuinely engaged and excited, they blew the examiners away. Even now, when I talk with physicians, volunteers or board members, the Baldridge is all they talk about because they are so proud. It is like being a part of a University that has a winning basketball team. We do not have a sports team but we do have a Baldridge team.

Q: It sounds as if Henry Ford employees are extremely engaged in the system and proud of their work. What do you think has led to that level of employee buy-in?

NS: To create an environment conducive to high performance, it is important that we grow as an organization and focus on our employees. We like to call it a career for life. Henry Ford is such a large system, it allows employees to come in as a nurse for the hospital and end up working for the insurance company. We try to offer a whole host of opportunities for employees to develop their careers. That is how you get great employee buy-in. When people feel the organization cares about them and communicates with them as individuals, they become more accountable for results. It is important to make people feel good every day and not just by what we say to them, or by what we do for them, but how we make them feel.  

You also need to create an environment that allows people to be their very best, no matter what their focus. You create that environment through many methods — how you communicate; how you share the hospital or system's vision; how you involve employees in the strategic planning process and how you seek employee input on important decisions. You want your staff to feel that they are a very important part of the organization.

Q: Can you elaborate on how you share the vision for Henry Ford and involve your employees?

NS: We communicate in 100 ways. We always say that with communication you are never done and never perfect. Everyone receives communication differently so you need to communicate in a variety of ways — we try to be innovative. We have a daily morning post that gives employees and physicians updates — including news from local media and national media. We also share information through the internet, through the system intranet and through video casts — we try to make it fun and interesting. We also hold town hall meetings and focus groups to gauge the employee understanding and interest.

Q: Beyond employee engagement, what do you think it takes to be a great or top-performing hospital?

NS: Three major things are important. The first is to have a culture of excellence. The second is to create an environment to encourage people to reach their full potential and finally, a very strong focus on performance. We set high goals and aspire to be a top-performing organization. We hire individuals that share that vision and are stimulated and excited by it. [Excellence comes from] the leadership team you put together and the strategies you create to engage people. Setting high goals will drive changes that will improve performance. Incremental goals do not push people to achieve as much. Instead, you should set high goals so you are always seeking to be the very best.

Q: Henry Ford is recognized for clinical excellence in areas such as cardiovascular surgery and cancer treatment, among others — how do you think Henry Ford has managed to achieve clinical excellence in so many areas?

NS: We have managed to achieve success in all those areas because of our culture around innovation and the core competencies we have fostered. Those things attract people who are interested in developing excellent clinical programs.

We have medical programs with physicians who are outstanding leaders. Clinical leadership is important for attracting talent. When you have talented and outstanding leaders, they are constantly focusing on improvement and research — they are constantly teaching others and raising the bar. A medical mission that focuses on clinical quality is also helpful. In addition, we have received great philanthropic support helping us to establish great clinical programs.

Q: What do you think helped Henry Ford to reach such a high level of performance?

NS: There are many things we have done over the years to achieve this level of performance. Setting high goals for all 30,000 employees, physicians and volunteers is important. At end of day, it comes down to everyone's individual and collective effort. It is about focusing on the needs of the organization and its employees. It is about taking care of the people who take care of people — being attentive and accessible — listening and engaging.  

I also believe we have made good strategic investments over the years. All of our investments in the past ten years have shown a good return. We were able to build a brand new hospital, [West Bloomfield Hospital], in a mature market in an innovative way. I hired [Gerard van Grinsven] from the Ritz-Carlton luxury hospital chain to run the building of West Bloomfield. He saw things in the [hospital's development] that healthcare leaders may not have seen.

We have also been risk takers. We are in Detroit — not an easy market. Yet, we have made investments in Detroit. We have become a driver for the community through incentivizing employees who live in Detroit. We have also maintained a can-do attitude in a tough economy.

Q: You were with Henry Ford when it underwent a dramatic financial turnaround about ten years ago. What could organizations currently facing hard times learn from Henry Ford's experience?

NS: During a financial turnaround, you are dealing with a burning platform. We had to make difficult decisions such as reducing 10 to 15 percent of our work force in core business units. Frankly, the most important aspect of the turnaround was that we never wanted to go through it again. That mindset has been a tremendous motivator for cost-management and our focus on quality and service. No one in the system wants to relive those days during the turnaround. At the time, we had to better align our cost structure with the realities of revenue, which was tough. Sometimes it is alluring to have an optimistic view about revenue — that you can put off tough decisions because it will be better down the road. Instead, we stepped up and dealt with the challenges and the tough decisions.

Q: What is your management philosophy or style?

NS: The essence of my job is to create an environment where my employees can reach their full potential. That idea guides what I do every day. When patients tell me that they have received the best healthcare at Henry Ford and that it changed their life, it is music to my ears. We are a leader in the healthcare industry and that is a privilege.

Q: What is the best piece of advice you have been given?

NS: I have received a lot of great advice because I have had some of the greatest leaders as mentors. In that regard, I remember years ago I ran into Sam Tibbetts, who was the chair of the American Hospital Association where I was completing an administrative fellowship. He asked me, "Nancy, why are you in this field?" I came up with an answer about how I was interested in healthcare and so on. His response to me was, "You know, Nancy healthcare is all about people." I have never forgotten that conversation. It has really guided me; the idea that healthcare is all about people. Healthcare professionals work in the most stressful and difficult of jobs. The outcomes of their work affect lives. We take care of people in anxious, life-threatening situations and at the most memorable times in their lives. We have to remember that every day. It is easy to come into the hospital, get into a routine and think it is all normal. However, it is not normal. I have that idea at the core of me and I am grateful it came early in my career.

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