By Jim Surman, CMC
One of my clients, Raymond Graeca, CEO of the newly-formed three hospital merged healthcare organization (Penn Highlands Health Care System) in Western Pennsylvania, recently shared the attributes and outcomes that he values in a consultant and a consulting relationship at a recent Institute of Management Consulting (IMC) meeting at the Engineers Society of W. PA.
He stated his main considerations included:
- Technical competency – their grasp of the subject matter
- Professionalism – are they serious or “semi-retired” or “in-between jobs”
- Ability to communicate verbally and in writing
- Ability to understand and adapt to a changing environment
- No preconceived ideas and not let bias operate when analyzing problems or making recommendations
- Good listening skills
- Does not “turn the tables” and ask the client to weigh in on a description of their problems or root causes
- Conforms to a very clear set of ethics
- Brings new knowledge to the organization, new ways of analyzing and solving problems
- Values the relationships that they formed
- Helps the client structure the implementation to build accountability within their organization
An example of real leadership: We assisted this CEO in creating an innovative right-sizing plan resulting in $3.6 million in cost reduction. The CEO set aside $500,000 to pay salaries of displaced employees for six months to avoid lay-offs. Employees in this “pool” were assigned non-mission-critical tasks such as backlog filing as well as re-trained to fill positions open due to temporary absences, retirements or voluntary separation. This program had a measureable impact on the back office business (e. g. backlog filing, Preventive Maintenance, etc.) and the future productivity (re-training employees as jobs opened up due to attrition). In a twist of pure irony, there was one employee left unassigned at the end of six months who was retrained in a position that provided value added services to the hospital’s bottom line.
The CEO stated in an interview in the Western Pennsylvania Hospital News, a healthcare trade journal, referring to this engagement stated “empowering our own staff was a benefit that taught us to help ourselves.” He went on to say, “This experience not only teaches you how to help yourself but, this way, you don’t need to rehire a consultant every time you experience changes, get new equipment or begin a new service. More importantly, this was achieved without laying off care givers and support staff.
At the time of the start of the engagement the facility had 840 employees in just the one location. After implementation of our management control system, many operational changes and the addition of 5 new service lines, the total number of employees totaled over 1400. This is a clear example of right-sizing as a positive, and not causing the trauma typically associated with managing resources.
Hospitals are a very labor intensive environment, with budget expenses typically involving 50% in staffing, 35% supplies and equipment, and 15% all other budgeted costs. This healthcare client clearly values the people who work in his organization and it’s a privilege to work with him, solving problems in this very challenging business and struggling with the uncertainty of dramatic changes in the health care industry in economically-challenged locations.
Mr. Surman, CMC (Certified Management Consultant) is the President of “Resource Productivity Institute, Inc.” (A healthcare management consultancy) for the past 20 years, has 9 years of experience with a big 4 Accounting Firm and can be reached by email at [email protected] or by phone at 412 841 6300. He is currently President of the Institute of Management Consulting, W. PA. Chapter (the preeminent international certifying organization for management consultants).
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