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New York,NY [November 23, 2008] – So the price I paid for chatting up an unsuspecting healthcare consultant at Chicago’s O’Hare airport while awaiting the departure of a flight was to write an essay on what a search consultant should tell a hospital CEO who wants to transform his or her annual report language on human capital into action. It seemed such a small price to pay for the insights he shared regarding his biggest regrets as a hospital CEO.

By way of a reminder, this former hospital CEO said that his biggest disappointment was his failure to come to grips – to understand – the real importance of human capital issues, and how they directly related to his success or failure as a hospital leader. The number of hospital senior executives who focus on human capital issues with sufficient depth of understanding and passion as to make their employees a meaningful part of their market differentiation strategy, is miniscule, he believes. Now a Managing Director for a global consulting firm’s human capital practice, this former hospital executive spends most of his time trying to convert healthcare leaders to the reality that having the best, most engaged workforce is one of the single most important pillars for achieving sustainable success.

As I started to write, I realized that my essay, save my first recommendation, was really a series of questions I would ask a hospital CEO, beginning with whether human capital is addressed in the organization’s long-range plan, and operationalized in the annual business strategy.

  1. How many A, B, and C rated employees do you have? To get to this critical benchmark, complete a top down assessment of your workforce. Bring in a consultant – either an executive recruiter that you trust or a Topgrading© specialist – to collaborate with your team to complete this work.
  2. If you have an abundance of C players, then it is time to ask why your employment team is spending dollars to recruit mediocrity. Is the problem the strategies your in-house recruiters use to source candidates, or the processes they use to screen them? Do you believe you are getting A candidates but far too many turn out to be Cs?
  3. If you have too many Cs — the employees who foul up service excellence, kill your productivity gains, or directly or indirectly contribute to an environment that jeopardizes patient safety — why hasn’t your annual performance evaluation process caught this? Is anyone looking at the results on an enterprise-wide basis, or, are they more focused on the total financial impact of the raises each employee will receive?
  4. If the majority of your employees are A and B players, with a small percentage of Cs, then look at other critical human capital metrics: rate of turnover, vacancies, and your orientation program.
  5. Do you consider leadership development an expense or an investment? How much are you investing in your leadership/management development programs as well as employee education? Do you tie the effectiveness of your leadership and other education programs to performance improvement benchmarks?
  6. Do you conduct a strategic assessment of your human capital – deciding who is ready for more responsibility or promotion, who needs additional attention and who should leave the organization? Or, is this performed on a division-by-division, department basis? If the latter is the case, how are you able to look at the human capital big picture?
  7. How high is your organization’s accountability score? An 8 to 10 indicates that employees know that exceptional performance and accountability are critical to their survival; that there are consequences for everyone in the organization.
  8. How often do you personally make rounds on all shifts? Do you require your senior leaders to make rounds? Your department managers? Is someone from your management team seeing every patient during his or her admission to monitor your human capital performance?

My O’Hare conversation just reconfirms what I have been trying to promote for years. The key to an organization’s success is its human capital. You cannot recruit and retain the best people without a comprehensive soup-to-nuts evaluation human capital development and assessment process that is constantly measuring where your organization stands.
This will not happen through best effort.