Leadership Variance

Reducing Leadership Variance - The Key to Achieving Better Outcomes and Greater Operational Efficiency

I recently wrote an introductory article on Leader Standardization and Repetition where I shared my belief that organizations have a difficult time gaining and sustaining high performance when they are ineffective at standardizing leadership. Since that time, I feel the need for leader standardization is even greater. In fact, physicians are so committed to reducing clinical variance in their practice patterns for quality outcomes that it’s time for the rest of us to match that commitment by reducing leader variance.

Questions to Ask Yourself

Consider these questions when thinking about the leadership at your organization:

• When your leadership team exits a departmental meeting, how confident are you that the message you have intended for leaders to take back to their department is actually delivered?
• How confident are you that leaders will provide the answers you prefer when they are asked tough questions by employees?
• How many different interview systems does your organization use?
• How variable are the skill sets of your leadership team?
• How confident are you that patients and families experience excellent care in all parts of the organization?
• Are you confident that physicians consistently receive excellent service from all staff members?
• Do you ever hear a nurse say, "I will work in any unit except____________?"
• Do you notice that some leaders in your organization perform well while others do not, although they all work in the same environment?

My conclusion is that the most successful CEOs and organizations know how to align the goals, skills, and behaviors of all employees to the broader organizational goals. Better alignment of resources creates greater success in achieving operational results.

Our national learning lab of organizations provides a continuous source of feedback on what is taking place in healthcare. When I talk to organizations about using a standardized process that provides better outcomes (whether it is for employee selection, communication of pre- and post-visit phone calls, etc.) I often find a major barrier to implementation is a leader’s strong desire for autonomy in providing leadership for their particular work area.

While organizations have no problem standardizing a purchase order, position request, or budget process, I find most organizations struggle deeply with the standardization of leadership behavior. And while I understand that feeling, my question to those who fight leadership standardization is this: Is your autonomy more important than achieving your organization’s desired results? And since organizational goals cascade from the organization's mission, is your autonomy more important than the organization's mission?

The Case for Reducing Leadership Variance

I believe a case can be made for reducing leadership variance in health care. Consider the graphic below, which shows how this works in health care, and how this process coincides with findings on organizational performance by author James Collins in the book Good to Great. It also supports the Health Care Flywheel^® I created a few years back.

The first step is to adopt a leadership evaluation system based on objective organizational goals. (This, of course, encompasses employee selection and leadership placement.) The next step is to develop leaders' skill sets to achieve the goals outlined in the leader evaluation.

Once goals are aligned, we standardize leadership behaviors to meet them. Many of these behaviors are based on best practices identified at high performing organizations. Studer Group calls them "Must Haves^®." Once leaders are trained, implementing the Must Haves^® and using standardized communication tools (e.g. standardized agendas communication boards, employee forums), we find that a gap begins to appear between three categories of employees: high performers, middle performers, and low performers. The gap becomes increasingly uncomfortable as it widens. In fact, the organization will hit a wall where progress slows (or even moves backwards after initial results) until low performers are de-selected out.

It is crucial that organizations have a method to re-recruit high performers, continue to develop middle performers and move low performers out of the organization. If not, the organization falls into the trap of grabbing on to the next hot trend, buzz word or program of the month.

Once behaviors have been aligned, we find the Healthcare Flywheel^® has picked up enough momentum to drive more standardization of best practices and accelerate greater innovation. There is now an opportunity to begin harvesting valuable intellectual capital from employees. Engaged leaders begin to offer break-through ideas for process improvements in technology and other areas as they take the organization to the next level. They may look for ways to proactively reduce steps in the registration process or cut medically unnecessary days. Leaders at one hospital determined that an inexpensive bio-med hook-up would allow the IV machine to signal nurse pagers, thereby reducing call light time from five minutes to just one minute!

Reducing variance in leadership is crucial if we are to support and optimize the goals of improved clinical outcomes. We cannot have one without the other. Let me explain…

When I spoke recently at the annual conference of the American Medical Group Association (AMGA), I was impressed by the attendees' dedication and focus on improving clinical outcomes for patients. From safety measures to best practices, each speaker described the need to decrease variance in practice patterns (without, of course, compromising opportunity for breakthroughs in clinical care).

One presenter made a great point: When a physician does not adjust his or her behavior and processes to align to identified best practices for patient outcomes, he or she is choosing personal autonomy over the best clinical outcomes. The key message was that reducing variance in treatment improves clinical outcomes if aligned with demonstrated best treatment protocol. Clinicians understand that lower variance among clinical practices (and better alignment to proven clinical pathways) maximizes excellent clinical outcomes.

As health care leaders, clinicians' commitment to reducing practice variance is music to our ears. Who among us has not spent time attempting to get members of our medical staff to use the same standing orders or come to consensus on standardized equipment and clinical pathways? From my own experience as a hospital leader, I know that if every surgeon uses the same instruments, the organization will have a better advantage in negotiating with suppliers. I remember a particular meeting I once had where I tried to persuade our hospital’s ED physicians to standardize their procedures so the ED staff would not have to learn a different system for each physician. When clinical practices are standardized, staff members are consistent and operational efficiency and clinical outcomes are improved.

If we agree that reducing clinical variance is a best practice for patient outcomes, what does lack of standardization and alignment on best leadership practices cost us in operational efficiency and outcomes?

Top 5 Ways to Reduce Leadership Variance

How does an organization reduce leadership variance? While I recommend many things be standardized, here are my top five suggestions for a strong start:

1. Use a common agenda. While we recommend that organizations organize agendas by the Five Pillars (People, Service, Quality, Finance and Growth), the most important thing is that there is a standardized agenda used by all leaders throughout the organization. First, this approach aligns all staff to the same organization-wide goals, thereby connecting to the vision and mission of the organization. Second, it provides a single mechanism to cascade communication to staff so all employees understand the critical success factors both in the organization and in their individual work areas.
2. Align the evaluation process to the pillars or your organization’s critical success factors as mentioned earlier.
3. Ensure that each leader leaves every department meeting with a packet of information he or she can share with staff so that every employee hears the same information.
4. Choose a single common selection method for hiring new staff. We suggest that all applicants be asked at least two to three of the same behavioral-based questions regardless of the job for which they are interviewing. We suggest these are geared toward values and ownership.
5. Collect from leaders the tough questions they hear from staff. Work with leaders to develop ways they can respond uniformly across the organization when they receive these questions. We find that if there are 100 leaders in an organization, there may be a multitude of answers given to the same question depending on the leader. This exercise accomplishes many goals. It provides leaders with skills to address these questions, which builds confidence and also gives evidence of the organization’s desire that all leaders have the information they need to respond to staff questions. For more information on this topic, read the Insight from last month about Building A Mature Leadership Team. The outcome is much greater consistency in communication and much less time spent on rumors.

If you commit to reducing leadership variance in your organization by implementing just these few suggestions, I am confident you will be rewarded with better clinical outcomes, greater operational efficiencies, and greater innovation. Watch the Healthcare Flywheel^® spin!