As hospitals and health systems evolve to meet changing reimbursement and delivery system demands, so too must the organization’s leadership. The shift toward value-based care and population health management places new demands on the organization, requiring new competencies and skill sets in the C-suite.
“With a change in strategic direction often comes the need to assess and develop new competencies,” says Andrew Garman, CEO of the National Center for Healthcare Leadership. “It’s important for organizations to determine whether leaders in their current roles have the right competencies and skills.” If it’s determined that certain skill sets or competencies are lacking, this can be addressed through leadership development activities or the creation of a new leadership role.
Hospital boards should work closely with the senior leadership team to identify the skills and competencies necessary for organizational success. Key competencies to succeed under value-based payment models differ from those needed to succeed under the volume-based reimbursement system. The new competencies may include risk mitigation and actuarial expertise, the ability to make decisions and act decisively, innovative thinking and change management. “These are competencies that organizations should make a commitment to evaluate,” says Mark Madden, senior vice president of executive search for B. E. Smith.
Madden suggests that organizations routinely conduct formal leadership assessments. “A formal, scientific assessment evaluates competency, leadership style and cultural fit,” Madden says. “Organizations have a tendency to rely upon informal assessments based on observation. The challenge is that these assessments are based on personal observation, rather than on scientific data, and are open to human error.” Garmen agrees. “It’s best practice to have some development feedback on an annual basis that is not part of the annual review process,” he says. Madden agrees.
“People will rate their peers differently for development purposes than for assessment purposes,” he says.
The leadership assessment is most successful when aligned with the organization’s strategy and leadership development process. Alignment of these processes will heighten focus on the organization’s goals and objectives and help in their attainment. Madden notes that the leadership assessment process also is an essential component of succession planning because it determines leadership bench strength and identifyies candidates for future leadership opportunities.
Senior leadership support is critical, Garman says. “Many organizations do not take leadership assessment seriously, but it’s one of the better investments organizations can make,” says Garman. “An investment in diagnostics is one that tends to be well-spent.” If senior leadership doesn’t drive the process, it will not succeed.
Case Study Regional Health, Rapid City, S.D.
Leadership assessment is closely tied to organizational strategy and leadership development at Regional Health. President and CEO Brent Phillips says the key to the leadership assessment process is knowing what the organization wants to accomplish. In the case of Regional Health, it’s “helping patients and communities live well.” The organization’s goals include enhancing the patient and family experience; continuous improvement in quality and safety; physician and caregiver engagement; and community and financial stewardship. “When we assess our leaders, it’s to gauge their understanding of our goals and to assess their ability to function in an ambiguous, ever-changing environment,” Phillips says. The leadership assessment process looks at individual strengths and weaknesses. “We also look at where our leaders want their careers to move,” he says. Through leadership development, one-on-one executive coaching and other tools, the organization works to enhance its leadership skill set. “We focus on both individual and group development,” says Phillips. “Each team member must be a highly effective individual, but equally important is working together as a team.”