Knowledge Center: Case Study
Healthcare and Life Sciences
Transforming culture in healthcare: An interview with Methodist Le Bonheur CEO Gary ShorbSubscribe to Healthcare and Life Sciences 5/14/2015 Regina Salvucci
Methodist Le Bonheur Healthcare is an integrated, not-for-profit, faith-based healthcare system in Memphis, Tennessee. An eight-hospital system with $1.6 billion in revenues and 12,500 associates, Methodist engaged Senn Delaney, a Heidrick & Struggles company, in 2010 to drive a “Power of One” cultural transformation throughout the organization.
“It was a number of years ago that we really decided that the vision for the organization needed to be one that created a health care system that was one of the best in the country,” says CEO Gary Shorb. “We knew that the missing ingredient was our culture; that we really had to address that. You can have all the best talent, the best plans and you can have the best strategy, objectives and goals. But without the culture piece being absolutely right, we were not going to achieve the kind of results we needed to achieve. It is the magic, if you will, that makes everything else work.”
Goals of the Power of One culture
- create a system mindset so that decisions are made for the greater good
- create a consistent, patient-centered brand experience across all hospitals and systems
- improve teamwork and interaction among the senior leaders as well as other leaders within hospitals within the corporate structure
- improve financial performance
- increase patient satisfaction
- improve employee engagement scores
By focusing on the Power of One, Methodist took an already positive and healthy culture to the next level by creating a system mind-set that encourages making decisions for the greater good, building and broadening accountability, and handling tough issues through open and candid dialogue.
Consequently, the executive team has seen better strategic alignment, improved annual planning and budgeting, broader system thinking, a climate of trust and engagement, and the sharing of best practices. These elements give Methodist a strategic advantage in an increasingly competitive and volatile market.
There was improvement on every goal. The system is in the top five percent in the nation on associate satisfaction. In clinical quality, scores are in the top quartile. The system went from a BBB bond rating with Standard & Poors and Moody’s to an A+ rating. Patient satisfaction scores achieved top quartile. It was ranked one of the 2016 Best Workplaces in Health Care, by Great Place to Work® and Fortune magazine. For the second year in a row, it was named to Becker's Hospital Review 2016 list of its 150 Great Places to Work in Healthcare in the United States. Le Bonheur Children’s Hospital became among only 7% of hospitals in the country to have earned the distinction of Magnet status in 2016 by the American Nurses Credentialing Center
Regina Salvucci, Senn Delaney partner and Healthcare Practice leader, spoke to CEO Gary Shorb about leading the culture-shaping journey.
Watch the video interview.
The following is an edited version of the interview.
Q: Methodist Le Bonheur Healthcare has a strong mission and vision. Can you tell us about those and how they connect to culture?
Gary Shorb: As a faith-based organization, that commitment to mission really shows itself in a number of different ways. We have a great commitment to the underserved. We are the largest provider of healthcare to the uninsured as well as the Medicaid population. We care for a huge poor population. We take a lot of pride in that.
It was a number of years ago that we decided that the vision for the organization needed to be one that created a healthcare system that was one of the best in the country.
And that dialogue started with Jim Collins, the author of Good to Great. We got with Collins and tried to follow his road map of disciplined people, disciplined thought, and disciplined action. We did that for a number of years, yet we still weren’t really moving the organization as quickly as we thought we could. I mean, we were good, but we were certainly not great.
We knew that the missing ingredient was our culture. You can have all the best talent, the best plans, and the best strategy, objectives, and goals, but without the culture piece being absolutely right, we were not going to achieve the kind of results we needed to achieve. It is the magic, if you will, that makes everything else work. I don’t think you can overemphasize its importance.
Q: What specifically did you want to change about how the system operated and how you worked internally?
Gary Shorb: We had a reputation of being good at nursing — probably the best in the community with bedside nursing. And we had a reputation of being very committed to the entire community and providing value.
But when you compared us with national standards on the clinical quality front; or with HCAHPS [Hospital Consumer Assessment of Healthcare Providers and Systems] scores, a measure of patient satisfaction; or with even our own internal measures from associate feedback surveys, we weren’t in the top quartile. We were still languishing in the midrange. And those were the indicators we were paying attention to.
Q: As you started thinking about the culture journey for your system, what were some goals you had in mind?
Gary Shorb: Well, as part of the overall vision, we certainly wanted to be recognized in journals like U.S. News & World Report. We also did not provide a consistent patient experience in every one of our branded sites of service. Getting a system in place that ensured that we were having some consistency in the patient experience was very important.
We also wanted some quantitative measure to ensure that our associates were satisfied. And we knew culture shaping was key to that. Patient experience is not going to be any happier than the level of satisfaction of the associates you are working with. So it’s really critical to get that piece right. And we knew culture was key.
Q: What areas did you want to see improved as a result of the culture work?
Gary Shorb: To have a successful organization, you need outstanding financial results or at least to achieve your financial goals, which is tied to market share. So that was very important.
Our organization wasn’t really thinking as a system. We had a lot of silo decision making going on. Our communication processes, which contributed to that silo thinking, needed to be improved. The teamwork was not where it needed to be. The interaction among the senior leaders, the leaders in hospitals, and those in the corporate structure needed to be improved.
We were good on the clinical quality side, but, again, a lot of process improvement was needed to take us into the top quartile.
Q: What are you seeing today as a result of the work that you’ve done on culture? How have those metrics improved?
Gary Shorb: We have seen improvement on every front. We are now in the top 5 percent in the nation on associate satisfaction. In clinical quality, almost every one of our quality scores is in the top quartile.
We have gone from a BBB bond rating to an A+ bond rating with Standard & Poor’s and Moody’s. Our patient satisfaction scores also are achieving top quartile. It’s taking a little bit longer than we thought or any of us would like, but it’s really moving in the right direction.
Q: What external recognition have you received?
Gary Shorb: Well, I mentioned one of our goals was to be listed in U.S. News & World Report as an outstanding hospital. We are the best in the region on the adult side. And Le Bonheur is listed as one of the top children’s hospitals nationally. There were only three recognized hospitals in Tennessee — St. Jude, Le Bonheur, and Vanderbilt. We take a lot of pride in that distinction. We also achieved level-one trauma status. We have gotten many accolades for the work we’re doing in diversity, especially in supplier diversity. We are in the top 5 percent in the Morehead Associates feedback survey.
Q: How does it all tie back to the mission?
Gary Shorb: The execution of the mission is dependent upon your financial success. And the financial success is dependent upon commercial market share. So the better the patient experience, the more commercial market share we will receive and have received. And as a result, we are benefiting greatly financially. We are ahead of budget this year, as we were in each of the previous five years. And as I mentioned before, our bond rating continues to improve.
Balanced with commercial market share, we see thousands of uninsured patients and, of course, Medicare patients. They won’t come to us unless the culture is right. We know that, and we’ve got to continuously improve it. The culture work we have done is really what’s driven a lot of the volume improvement over the past few years. So it is all tied together.
Q: How important is the Power of One initiative — the cultural transformation — from the top of the organization to the front lines?
Gary Shorb: It’s really critical. To have the ultimate patient experience, everybody has to be aligned and committed to providing that experience and embracing patient and family–centered care.
I got a letter yesterday — just more anecdotal evidence of how far we have come — from an individual who was with us last week going through surgery and talking about everyone’s smiles and caring attitude but particularly talking about a transporter who was moving him to surgery and how the transporter’s kind words and thoughts calmed his heart and spirit and enabled him to go into surgery in a better frame of mind.
Q: If you had to narrow it down, what part of this initiative are you most proud of?
Gary Shorb: I think it’s the experience improvement that we have seen throughout the system and the fact that we have a leadership team who really does show, every day, a commitment to achieving that. It really has exceeded my expectations. And I am really proud to have the evidence that demonstrates this journey is working and working extremely well.
Q: What are some keys to success that you would share with other healthcare CEOs on how to lead culture successfully?
Gary Shorb: First and foremost, the CEO and his or her direct reports need to be totally committed. That commitment level really sustains the effort and gets you the kind of results you need. Second, culture is extremely important. If you don’t get the culture piece right, you are not going to achieve the goals that you’re laying out for the organization.
We really almost missed the fact that culture is the key ingredient. It is the magic that makes everything else work. I don’t think you can overemphasize that in terms of its importance.