• We begin today with a look at the importance of creating a formal communications plan to help you become a more effective manager or senior leader. The pace of change is accelerating and the speed with which executives must act poses daunting challenges, especially to those who work in smaller business enterprises.
  • We will conclude by taking a look at the challenges that small and rural hospital governing boards face in selecting a new Chief Executive Officer. We will focus on three concepts governing boards should consider when undertaking this, the single most important decision they will make.

Leadership has never been an easy career pursuit but with today’s dynamic economy the challenges of being an effective leader are particularly acute, especially in those industries that are experiencing dramatic transformation with their business models. Healthcare, the news business, publishing and retail, for example, are all facing daunting challenges. Did you know that the US has lost more jobs in the retail industry than the whole of the coal industry? In the news business, where digital platforms have disrupted traditional advertising revenue and content distribution models, thousands of journalists have been laid off and hundreds of newspapers, including my former employer, The Houston Post, were driven from the market. In radio broadcasting, once a focal point for creating communities of similar interests, there are fewer live announcers, especially in smaller communities. Local disc jockeys and announcers are being replaced with programming computers that provide music, public affairs shows and weather information at lower costs than the old radio production model.

Every day, the Amazon delivery teams bring in dozens of packages to my building in Dallas. Several times a day they deliver everything from books and small appliances, to laundry detergent and paper towels and even items for the food pantry, all merchandise we once only bought at a retail store.

In healthcare, as reform realigns economic incentives, patients are being moved away from traditional acute care facilities — the big box hospitals — to more appropriate, less costly settings for diagnostic evaluation or even definitive care. This shift in care management will only escalate as controlling this nation’s enormous spend on healthcare services becomes an economic necessity.

These pressures on rural and community hospitals which are an essential part of the nation’s healthcare delivery structure, can be more intense, necessitating an acceleration in the pace of change to ensure survival.

Not only are these changes impacting the healthcare business model, but they also pose threats to those executives who are not sensitive to how these changes will impact their leadership style. Some executives talk about change but continue to operate as if change has no bearing on how they lead and communicate with their teams.

The truth is that executives rarely think about how they communicate. It is an automatic, something they do instinctively based on years of experience. In my years of interviewing executives, it is rare to find someone who has taken the time to create a communication structure and a plan.

While this may seem counterintuitive, leaders in smaller organizations like rural and community hospitals must be more adept than their colleagues who toil in larger corporate structures in metropolitan areas. They have to do so much more with less, and, typically, they have to do it faster.

One of the core competencies of leadership is communication; senior leaders must be excellent communicators.

Communication is about sharing information but it is also about seeking clarification when there are questions that are unanswered or when the situation is unclear.

Today I want to share my four pillars of effective leadership communication:

First, be strategic. You must always be thinking ahead. Leaders and managers cannot afford to take anything for granted. You cannot delay because the pace of change can, and probably will, overwhelm your ability to respond, especially if you have a habit of kicking the can down the road for a more convenient time to share information. To be an effective strategic communicator you must anticipate and understand how events will affect your team and those with whom you must collaborate. If this is not a natural ability you must plan in advance.

Second, you must maintain ongoing communications. In a fast-moving environment there is always the risk of management assumption — one or more of the parties in the project chain assume certain facts or make the wrong calculations based on inaccurate or poorly communicated information. Regularly scheduled communication updates with your superior and direct reports are critical, especially in times of intense activity — the roll out of a new service line, the change in a major vendor, or changes that produce a significant increase in activity.

Third, follow-up is essential. In mission critical scenarios, confirming the details of a meeting and the decisions made, especially highlighting action items that must be addressed, can sometimes make the difference between success or a mess. Even if it is a quick email, this can ensure that faulty assumptions are avoided and that action items are addressed in a timely manner.

And finally, be structured. Create a communications process and style that is consistent with a highly reliable leadership model. Your superior, your peers and direct reports will value that consistency. Always have an agenda with the goal of advancing the ball. Everyone hates meetings to discuss what happened in the last meeting. Afterwards, distribute the minutes of the meeting with action items and accountability specifically spelled out. In the end, effectively communicating information with clearly performance expectations is a bedrock of success.

One of the most important jobs of a governing board — whether it is a large corporation in a major metropolitan area or a small rural community hospital — is selecting a Chief Executive Officer. While finding the right fit for a CEO to lead a complex, multi-site enterprise is no small order, I believe the challenges facing board members overseeing a rural community hospital are much more daunting.

Big corporations compensate their members for their time. They are supported with staff resources to help them discharge their duties. Governing boards in smaller enterprises do not have that luxury. Most volunteer their time. They have full-time jobs and there are limited support resources available to guide them through the process.

There is a significant risk in hiring a new leader. If you are a board member looking at statistical success rates across all industrial sectors, at large and small companies, there is a stunning number that has remained about the same for the past 2o years: 40 percent of new executive hires usually leave within 18 months. The cost associated with that level of leadership turnover is staggering. Most studies conclude that the cost for a miss-hire or an early resignation, ranges between 100 and 200 times the executive’s annual salary. For a small business that is a terrible financial hit. In my 20 years of leading executive searches I have seen once successful community hospitals closing because of one poor hiring choice combined with an astounding reluctance by the board to admit they made an error, all evidence to the contrary.

So here are three concepts board members should consider when faced with making their most important decision:

  1. First, be strategic. Where does the board want the hospital to be in five years? If, as a board member you do not know, or there is no consensus on the board regarding their vision, bring in a competent interim CEO and address that important vision issue first. Hire someone who can facilitate a board discussion on a where do we go from here vision. Sometimes a good outside recruiter can help the board find that strategic vision — I have successfully performed that role on numerous occasions — but here is a cautionary note: most search consultants are transactional. They see their job as finding three or four candidates the board can agree on, with the goal of getting the them to hire one. The only strategic vision many recruiters have for a specific client is whether they can develop additional search engagements from the organization.
  2. Second, be honest with yourselves. Finding the right great CEO takes time, a lot of time. A good thorough search should take 45 to 6o days to identify and vet potential candidates. Interviewing can take another month, depending on scheduling. If, as a board, you cannot devote the many hours it takes to identify the best candidates, then consider hiring an experienced recruitment advisor to provide staff support, from candidate sourcing to screening and comprehensive vetting. Boards who are loath to invest the money with a recruiter to guide them using the rationale that somehow we will make it work typically find themselves conducting a new CEO search every couple of years. Requesting that HR post job vacancy advertisements with the expectation that will lure top candidates is a risky proposition. Many times the best candidate for your organization is not an active candidate and probably would not respond to an employment ad. You should also be honest with yourselves about the strengths and weaknesses of the organization. Bet transparent with the candidates. Transparency begets transparency.
  3. Finally, establish standards of performance for yourselves and the search firm. If you do the search internally or you go outside and hire a recruiter, establish specific performance expectations, from how the candidates will be sourced, to screening and performance vetting. For example, one area where many boards fall down is in the vetting process. It is important to conduct a comprehensive background check of your finalists and to thoroughly check their references. So here is an example of a performance standard the board should establish:

References. There must a minimum of four — one or two former superior (bosses), a peer, and a subordinate. These individuals must be able to speak to the candidates’ performance at previous employers. Be sure to ask questions about the performance claims made by each candidate. Today, fabricating academic and professional credentials is a rarity. Exaggerating successes is much more common. In other words, follow President Ronald Reagan’s advice: trust but verify.

When deciding which firm to hire, ask about their process including how much time the recruiting who will be leading the search will spend on site, getting to know the board, the staff and community stakeholders. That is a function that cannot be done on the telephone or videoconference call. If the recruiter is reluctant to invest the time, they will not be able to understand your organization’s culture and that could very well lead to a very expensive miss-hire.

If you are a board member and would like additional information on the CEO search process, email me at asktherecruiter@johngself.com.

That’s it for this week. Next week we will look the important role a comprehensive onboarding program plays in reducing costly turnover.