The Connection Between Goal Alignment and Skin in the Game

By Penelope Elebash

Healthcare organizations today realize results matter more than ever. Since joining Studer Group in 2005, I’ve watched evaluations for healthcare leaders evolve significantly. The days of setting a subjective set of goals totaling 15+ items just won’t get an organization where it needs to go to achieve best-in-class results.  In fact, recent data shows the probability of hitting desired outcomes is far higher with eight or fewer metrics.  Each healthcare organization is accountable for outcomes and the leaders within it should be, as well. If not us, then who?

What Gets Measured Ultimately Gets Improved

Measuring leader outcomes alone typically isn’t enough. There is a common factor of success: organizations achieve the most sustainability when evaluations are 100 percent based on leader outcomes. Consider the scenario where organizations measure results but still evaluate at year-end on competencies or behaviors. I’ve enjoyed watching our partners evolve with this thinking over the years. For example, standards of behavior for leaders have grown into an expectation versus something they are evaluated on. Some organizations put even more skin in the game by tying evaluations to compensation. In fact, Studer Group partners with a national health system where leader evaluations dictate 100 percent of their incentive compensation.

Studer Group focuses on ensuring the right leaders have the right objective goals for their specific job titles and that goals are assigned meaningful weight. A set of four to eight objective metrics with weights based on importance ultimately should drive a leader’s evaluation, and potentially their compensation, to produce the best results long term. I recently coached an organization where the CNO had 40 percent weight on improving the results of readmissions across the organization. In my experience, weighting a goal at 30 percent or higher assigns urgency and importance to that goal, and notes where leaders should focus their time. By weighting a metric like readmissions so highly for this particular CNO, she embarks on a journey to determine what ultimately is driving readmissions, focusing on the overall Care Transition process and aligning the leadership team appropriately to drive that overarching measure.

At Studer Group, every evaluation is tied to measurable, weighted goals. As a leader, I personally have a goal weighted at 60 percent of my evaluation. Simply put: I don’t question what matters most to the outcomes I’m responsible for or where to spend my time. Because of this explicit direction, my mid-year or year-end evaluations are never a surprise. I have a numeric score based on my metrics and weights that I track throughout the year, and I know that score equates to my year-end evaluation. Now, to achieve my specific outcomes, I must engage and align with those I work with and create a team that is clear on vision (and they have goals that help drive the result, as well). It’s up to me to determine what skills I need to accomplish goals. It’s also entirely up to me to work with my leader to remove barriers that might prevent me from achieving my goals, and it’s my responsibility to determine the actions I need to execute consistently to produce the right set of results. Activity shouldn’t matter more than outcome. Evidence shows high-performing leaders want to know what’s expected of them, what the priorities are, and they want the training or skills to be successful in achieving those priorities. Focused leader training every 90 days keeps organizations accountable and moving toward the results they desire.

In your organization, can you say that every leader going into year-end knows exactly where they stand? And furthermore, can you confidently answer the following questions?

  • Do I remain a leader in your organization if I fail to hit those results year over year?
  • Do I receive my full incentive if I don’t hit those goals?
  • Can I still get a favorable year-end evaluation if I have results like high turnover, poor department financials, low quality or patient experience, or lack of other outcomes that matter to our organization’s future?

If your answer was “yes” to any of those questions, your organization may be sending a mixed message. Leaders must change behaviors to change results. Sometimes the right things are in place across the board, but if the outcomes aren’t there, perhaps it’s a lack of consistency in execution. Accountability and skin in the game help leaders modify to get to the right outcome. Health system leaders I speak with daily are talking about raising the bar. Just setting objective goals on the evaluation is no longer enough to sustain results. Those results need to represent something greater for each leader. We see the best results when the overall evaluation score drives at least 80 percent of an evaluation and/or full incentive.

Below is a good example of an objective, weighted goal dashboard that was pulled from Studer Group’s Leader Evaluation Manager® database. The leader can easily see which goals carry the heaviest weights, and where most of the leader’s time should be focused. The red, yellow and green status quickly shows results so the leader can monitor their progress throughout the year.

What’s in it for the accountable leader?  Aside from the obvious “no surprises” evaluation, when you hold someone accountable for an outcome, you honor their ability to chart the course forward.  Nobody fights their own ideas.  While the likelihood of adopting the evidence-based practice is much greater if the emphasis is on the outcome, fostering ownership for individual leaders can work wonders for the future of your organization.  In particular, the action planning elements help separate the duties of leader and direct report.  Leaders don’t care to be micromanaged, and no one wants to be a micromanager.  If a leader knows what is expected of them, they can create a plan of their own and keep it consistent, which allows them to just “go”.

Regardless of where you are in your fiscal year, it’s never too late to ensure you have the right goals in place to drive and sustain organizational change.

Over the past twelve years with Studer Group, Penelope Elebash has worked with hundreds of organizations hardwiring accountability processes that help sustain results. Through commitment to the Evidence-Based LeadershipSM framework, in particular leader accountability, Penelope leads Studer Group’s Next Level Partnership team, spending time in the field to ensure partnerships meet the results of today and the future.

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