Driving Leadership Development in Healthcare: The Challenges, The Opportunity, and Imperative

1. Driving Leadership Development in Healthcare: The Challenges, The Opportunity, and Imperative Marie E. Sinioris, National Center for Healthcare Leadership Robert G. Riney, Henry Ford Health Systems Allan L. Weisberg, National Center for Healthcare Leadership October 9, 2007 SHRM Foundation Thought Leaders Retreat

2. When we realize the everlasting truth of “everything changes”, and find our composure in it, we find ourselves in nirvana • - Shunryu Suzuki

3. The Transformation Mandate • Healthcare leadership needs to be prepared for its biggest challenges with intensifying demands on the industry for excellent outcomes and better value - Michael Porter, Redefining Health Care, 2006

7. The significant problems we face cannot be solved at the same level of thinking we were at when we created them - Albert Einstein

8. Challenges in Healthcare Leadership • National Summit on Future of Education and Practice in Health Management and Policy, 2001 • Industry Challenges (cost and quality) • Succession/recruitment • Mentorship declines • Mid-advanced career education offerings • Practitioner-academic collaboration • Diversity

9. Evidenced Based Leadership Development Improved Leadership Improved Organizational Performance Improved Health Status NCHL Vision Optimize the health of the public through leadership and organizational excellence.

10. NCHL Strategy • Span the industry reaching comprehensively across: • Career levels: career-entry, mid-career, advanced career • Industry sectors: providers, suppliers, insurers, policy • Professional disciplines: administration, nursing, medicine, behavioral health, pharmacy • Academia and Practice • Develop programs based upon sound research and global best practices • Focus on rapid development, testing, and deployment of programs • Accelerate adoption of best practices through learning collaboratives and benchmarking • Systematically evaluate programs to assess learning outcomes and performance improvement – evidence based management practice • Broad Dissemination to the fieldvia collaboration

11. What is unique about healthcare leadership? • Values-based, mission-driven industry • Breadth of “customers” literally encompasses the entire population – local, regional, national, international • Demand and supply dynamics for critical talent requires that leaders create climates that attract and retain top talent in a highly competitive market • Complexity and mix of independent constituencies requires higher levels of influence and consensus-building than most leadership roles

12. Social sector Leaders are not less decisive than business leaders . . . They only appear that way to those who fail to grasp the complex governance and diffuse power structures common to the social sectors. • — Jim Collins, Good to Great and the Social Sector: • A Monograph to Accompany Good to Great, 2005

13. Skill Knowledge Behaviors Attitudes Values Other Characteristics COMPETENCYAny characteristic of a person that differentiates outstanding from typical performance in a given job, role, organization or culture Baseline Necessary for top performance but not sufficient Distinguishing characteristics that lead to longer-term performance and success

14. The Competency Study Process Relationship between methods & validity of results HEAVY DUTY RESEARCH-BASED MODEL (35+ BEI’s) FULL-SCALE BEI- BASED MODEL (20+ BEI’s) INVESTMENT $$$ HYBRID MODEL (5-15 BEI’s) BENCHMARKING EXPERT PANEL + BENCHMARKING + STRATEGIC INTERVIEWING GENERIC MODEL EXPERT PANEL TARGET R O I TIPPING POINT/ ALGORITHM CRITICALITY/PRECISION & VALIDITY OF RESULTS

15. Benchmark Findings • Health • Pharma/biotech • Insurance • Global Leaders • In-depth Interviews • 84 Total • Career Stages • Professions • Future Vision • IOM Agenda • Futurists What defines today’s best health leaders? What will the 21st Century require? What can we learn from others? + + NCHL Competency Research What technical and behavioral characteristics create outstanding performance? NCHL Competency Model

16. Three Domains of the NCHL Model

17. Influence 4. Develops behind the scenes support 3. Uses indirect influence Target Level 2. Anticipates impact of actions or words Degree of Sophistication 1. Engages audience Competency levels increase by degree of difficulty Scaled Competencies

18. NCHLCompetencyModel by CareerStage

19. Integrated Learning Model

20. NCHL Integrated Learning Model Executive Level Learning Modalities Managing Managers Managing Others Managing Self Transformation People Execution

21. One system grounded in world-class research and execution of leadership development: • NCHL’s evidence-based approach to leadership development focuses on action learning for healthcare leaders • GE’s proven approach to leading change and sustaining a performance culture Nursing Medicine Administration Institute for Transformational Healthcare Leadership Leadership development programs “equip” healthcare leaders to be successful throughout their careers Senior Executives Managers of Managers Front-Line Managers Operating Cycle Recruitment & Selection Learning & Development Performance Management Strategic Alignment Values & Competencies Talent Review & Succession Preparing leaders to innovate and drive high performance

22. Critical Success Factors • Shared vision – leadership and organizational transformation • Accountability for learning and performance outcomes • Information for evaluation, continuous feedback and benchmarking • Commitment of resources, time, and energy

23. Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice, and discipline. • — Jim Collins, Good to Great and the Social Sector: • A Monograph to Accompany Good to Great, 2005

24. Henry Ford Health Systemand National Center for Healthcare Leadership Robert G. Riney Executive V.P./Chief Operating Officer Henry Ford Health System October 9, 2007

25. Coming together is a beginning; • keeping together is a progress; • working together is success. • -Henry Ford

26. Henry Ford Health System Overview • Henry Ford is one of the nation’s leading comprehensive health systems, providing acute, specialty, primary and preventative care services, backed by excellence in research and education.

27. Creating the “Leadership Development Experience” at Henry Ford Health System • In 2003 HFHS joined NCHL as a LENS member. • Recently we had the opportunity to more fully leverage the power of that relationship. • Over the last 7 months HFHS and NCHL have come together to create a Leadership Development Experience for the Executive team at HFHS. • By integrating with internal programs we have been able to offer a comprehensive approach to leadership development. • Our leaders are enthusiastic and engaged and there appears to be a renewed spirit around the importance of leadership development and talent management.

28. “Leadership Development Experience” • The “Leadership Development Experience” process encompasses the identification of competencies, leadership simulations, 360-degree feedback tools, climate surveys, group and individual development plans, and executive coaching opportunities. • Each of these elements will be linked to performance management, talent reviews, and succession planning. • This process incorporates many of our own initiatives and is managed internally to create a true sense of ownership and sustainability within our organization.

29. “Leadership Development Experience” • As our Executive team progresses through their own “Leadership Development Experience” we have the opportunity to create a stronger culture of openness around leadership and coaching. • Currently we are completing the assessment phase and have begun the executive coaching feedback sessions. • We will conclude the initial phase in October with a clear development plan for our leadership team. • Together the Executive team and the HR leaders will evaluate this process and determine how to best roll out the experience to other levels of leadership within the organization. • The following slides outline our current Leadership Development process for our executive team.

30. “Leadership Development Experience” INDIVIDUAL FEEDBACK GROUP FEEDBACK DEVELOPMENT AND ONGOING PERFORMANCE MANAGEMENT ASSESSMENTS Performance Management: Aligning and developing leader competencies and skills to enhance overall capabilities in achieving individual and organizational goals.

31. ASSESSMENTS - Group Simulation Experience (teams of Executive Leaders) - Group Feedback Sessions (same teams from Simulation) Provided by The LEAD Center

32. The LEAD Center • In 2006 HFHS invested in developing our own leadership simulation center. This center is referred to as: The LEAD Center (Leadership, Evaluation, Assessment, and Development). • The Center is a “Cognitive Simulation Center” aimed at assessing and developing leaders’ decision-making skills as they pertain to strategic thinking, creativity, vision integration and execution, and crisis response. • The LEAD Center specifically addresses innovation, teamwork, conflict resolution, the act of engaging stakeholders, change management, crisis resolution, and strategy development. • This Leadership Development Framework will incorporate the use of the LEAD Center as both an assessment tool for group feedback and as a development tool for individual growth.

33. ASSESSMENTS - Group Simulation Experience (teams of SET members) - Group Feedback Sessions (same teams from Simulation) Provided by The LEAD Center - Leadership 360 Degree Evaluation - Organizational Climate Survey (cultural audit) Provided by NCHL

34. National Center for Health Care Leadership (NCHL) • NCHL’s vision is that an integrated leadership development system model will lead to improved leadership and organizational performance resulting in improved health status. • NCHL’s mission is to be a catalyst for industry-wide collaboration to assure that high quality, relevant and accountable health management leadership is available to meet the needs of 21st century health care. • In 2003 HFHS made a commitment to work with NCHL as a member of the Leadership Excellence Network (LENS) to further develop HFHS leadership capabilities. NCHL works with a collaborative group of progressive healthcare systems across the country all dedicated to evidence based learning and development.

35. The leadership competencies that are assessed in the 360 degree evaluation are categorized into three categories:1) Transformation 2) Execution 3) People NCHL Continued

36. NCHL Continued • The Organizational Climate Survey assesses a Leader’s skills as it relates to creating a culture of: • Flexibility • Responsibility • Standards • Rewards • Clarity • Team Commitment

37. ASSESSMENTS - Group Simulation Experience (teams of SET members) - Group Feedback Sessions (same teams from Simulation) Provided by The LEAD Center • NCHL • Leadership 360 Degree Evaluations • Organizational Climate Survey (cultural audit) - Leadership 360 Degree Evaluation - Organizational Climate Survey (cultural audit) Provided by NCHL • - Preference Indicator Survey • MYERS BRIGGS TYPE INDICATOR (MBTI)

38. Myers Briggs Type Indicator (MBTI) • This tool assess individual preferences in order to provide better awareness regarding individual style and team dynamics. • The MBTI reports preferences on four dichotomies, each consisting of two opposite poles: • Extraversion and Introversion (Where you prefer to get your energy) • Sensing and Intuition (How you prefer to take in information) • Thinking and Feeling (How you make decisions) • Judging and Perceiving (How you deal with the outer world) • This assessment will be used to enhance the awareness and understanding of team dynamics and enhance an individual’s ability to flex to other preferences.

39. INDIVIDUAL FEEDBACK ASSESSMENTS • INDIVIDUAL LEADERSHIP DEVELOPMENT • HFHS will provide all Leaders with a written comprehensive • Development Package which will include: • 1) Results from all Assessments (NCHL, LEAD Center, MBTI) • Individual Development Plan • a) Executive coaching opportunities • b) Current HFHS University offerings • c) Additional learning opportunities/programs • 90 Day Action Plans • NCHL will provide a facilitated feedback session to review the • Development Package with each Leader in a coaching and feedback • Session to create their Individual Development Plan.

40. GROUP FEEDBACK INDIVIDUAL FEEDBACK ASSESSMENTS • GROUP LEADERSHIP DEVELOPMENT PLANNING SESSIONS (SET) • HFHS and NCHL will co-facilitate a Group Leadership Development • Planning Session with all SET members to: • Review the composite results and identify strengths and • opportunities for improvement in relationship to HFHS strategic • goals and values. • Create a Group Development Plan, organize priorities and • determine action items to support organizational strategies, • goals and outcomes.

41. GROUP FEEDBACK INDIVIDUAL FEEDBACK DEVELOPMENT AND ONGOING PERFORMANCE MANAGEMENT ASSESSMENTS • Leaders participate in ongoing development opportunities identified within their Individual Development Plan. • Leaders participate in a customized Individual Simulation session from the LEAD Center. (one time experience) • Simulation will focus on Leader’s specific strengths and opportunities • for improvement as part of a development opportunity. • Leaders participate in an individual feedback session. • Results will be incorporated back into their Individual and 90-Day • Development Plans. • Ongoing Performance Management • Leaders review 90-Day Action Plan quarterly with development Coach • (TBD). • Leaders report results of their development progress back to their respective • Senior Leader for additional feedback. • Leaders incorporate 90-Day Action Plan activities into annual Performance • Evaluations. All development activity should align with Leader’s key goals • and objectives.

42. Next Steps • In addition to our Executive Team members we currently have 9 high potentials from each of our Business Units participating in the Leadership Development Experience. • Following the completion we will evaluate this process and determine how to roll out this experience as part of our overall Succession Planning strategy.

43. Competency-based Succession Planning Allan L. Weisberg, Senior Vice President National Center for Healthcare Leadership October 9, 2007

44. Succession Planning at Johnson & Johnson • Long history, 40+ years • Disciplined approach, business cycle process, i.e. financial, strategic planning, business planning • Accountability of leaders, no longer need to justify the why • “Bottom up” process goes from operating company to the Executive Committee • Matrix view, i.e. operations, marketing, research, etc., cross-organizational moves • Internal executive search process – cross-organizational, functional/geographic movement is encouraged and expected • Talent is a “Corporate Asset”

45. Elements of Succession Planning at Johnson & Johnson

46. Observations about Healthcare • Why? • No shareholder equity • Careers governed by function as opposed to organizations • Healthcare systems from individual hospitals • Mentality of “buying it” rather than “developing it” • Tenure of CEOs • “Business processes can’t work here” mentality • For a long time, talent management was not valued?

47. Healthcare organizations are getting the message that great leadership is vital to great results • Incredible healthcare challenges • Outside boards • Shortage of current and future talent • Success rate of “external” hires • Exposure to other organizations, i.e. • GE • Johnson & Johnson • IBM • 3M • Need for more business focus and accountability

48. What will it take for healthcare organizations to be successful in developing and retaining great talent? • CEO commitment, backed up by a great HR leader, i.e. actions vs. words • Sticking to it with discipline and rigor • Accountability of all leaders • Talent as a “system-wide” asset • Get started “do a little, learn a lot”