Wake-Up Call
Leads To
Organizational
Transformation
Physician
Executive, July-Aug,
2008 p28
Wake-Up Call Leads
To Organizational
Transformation
(Change). Nick J.
Paslidis.
Full Text: COPYRIGHT
2008 American
College of Physician
Executives.
We've all heard the
buzzwords--organizational
transformation,
corporate
compliance, culture
change,
transparency. We may
tire of the jargon,
but as pressure
continues to mount,
organizations--particularly
those viewed as
performing public
service--are being
forced to rethink
old habits, find
truly measurable
ways to evaluate
performance, and
become more
accountable in every
aspect of their
operations.
The Arkansas
Foundation for
Medical Care (AFMC)
was thrown into that
process head-on two
years ago, and while
the evolution is
ongoing, the initial
revolution appears
to have been
successful. Our
saving grace: the
staff's underlying
commitment to the
organization's
mission and survival
seems to run deeper
than petty
differences or
resistance to
change.
For more than three
decades, AFMC had
been steadily
performing its
duties as the
state's peer review
and quality
improvement
organization for
Medicare. Its
mission and
contracts expanded
to include similar
work for Medicaid,
and it grew from a
handful of employees
to a staff of more
than 150 with
corporate offices in
two cities.
The company and its
various services
earned the trust and
support of state
legislators,
numerous agencies
and health care
organizations, and
health care
providers across the
state. However,
rapid expansion
resulted in some
fragmented
outgrowths, the
company had no
structured plan for
capitol expansion
and the organization
as a whole had
become somewhat
comfortable and
complacent.
As the 21st century
began, AFMC and
other quality
improvement
organizations
entered a period of
increased
expectations,
stagnant funding and
heightened scrutiny.
In 2005, as the
Senate Finance
Committee eyed the
finances and
corporate behavior
of nonprofit
organizations
nationwide, AFMC
found itself caught
in the spotlight.
The committee found
fault with some of
AFMC's longstanding
practices, and more
seriously, with a
contract that
appeared to present
a conflict of
interest. Local
media sniffed out
the story, and AFMC
found itself
responding to
demands for
information and
internal and
external calls for
change.
Administrators and
staff at all levels
were clearly shaken.
Morale was sinking,
and many employees
were working long
hours to comply with
requests for
information from the
Senate and media. In
the absence of clear
internal information
streams, stress
levels mounted as
rumors spread among
the staff.
The company's chief
executive officer
had announced his
upcoming retirement
long before the
investigation and
media coverage
began. Several
promising candidates
had applied. As a
long-time board
member and former
chairman, I believed
in the company, its
mission and its
capabilities and
knew how dedicated
many staff members
were.
After much
deliberation, I
withdrew from the
board and decided to
apply for the
position. Several
months and
interviews later, I
was offered the
position and
accepted.
Newly hired
corporate executives
are often advised to
take some time
assessing the
corporate
environment,
determining key
players and making
changes gradually. I
quickly realized we
did not have that
luxury.
We had to change
dramatically,
appropriately--and
immediately.
The Revolution
Begins
For years, AFMC has
encouraged health
care providers to
embrace positive
change, foster open
communication,
streamline
processes, measure
outcomes and
continuously
evaluate
performance. We
advocate voluntary
reporting of
performance data and
stress improving
processes rather
than assigning blame
and punishing human
error.
Yet--being all too
human ourselves--we
were busy improving
quality for others
and did not always
follow our own
advice, until
circumstances forced
us to do so. We
needed to become
more transparent in
our finances,
rebuild internal and
external trust, and
find new methods of
measuring our own
performance.
Still, we had done
many things right.
The board of
directors and
management had
foreseen the push
for corporate
accountability among
nonprofits and
government
contractors, and had
already made plans
for a corporate
compliance program.
With AFMC under
federal scrutiny,
the program took on
a new urgency.
To begin
implementation, our
human resources
director put
together a committee
of employees charged
with performing a
strategic analysis
of AFMC's
organizational
governance, ethics,
accountability and
integrity.
We wanted the staff
to be realistically
and candidly
represented, so we
carefully selected
employees who were
not overly
antagonistic, yet
did not shy away
from conflict. In
the end, we chose
eight employees with
diverse experience
and backgrounds. No
senior managers were
included, to
encourage employees
to relax and speak
openly.
Within a few weeks,
the newly christened
ETHOS Task Force
developed an ethos
statement and
drafted a corporate
compliance policy
and a detailed
conflict of interest
policy. The policies
were sent to the
executive team and
the board of
directors, who
quickly reviewed and
approved both
documents.
Here is how our
compliance program
looks today:
• A full-time
corporate compliance
officer--oversees
the program, working
closely with the CEO
and legal council
• The conflicts
review committee--an
executive committee
of the board of
directors, works
with the compliance
officer to make
decisions and
develop corrective
action plans when
needed
• Education and
training--providing
general compliance
information and
training to
employees, board
members and
contractors
• Disciplinary
action--enforcing
appropriate
disciplinary actions
against employees,
board members or
contractors who
violate compliance
policies, applicable
laws or regulations
•
Monitoring--auditing
and assessing risk
to identify
potential problems
•
Investigation--investigating
identified problems
and developing
appropriate
corrective action
plans
•
Self-reporting--informing
appropriate outside
authorities when
criminal, civil or
administrative law
is violated
The program has
played a key role in
our organizational
transformation by
defining ethical and
legal behavior for
AFMC employees,
board members and
contractors.
The development of
the program was a
meaningful
accomplishment for
staff members and
leadership for still
another reason: it
proved how quickly
and effectively we
are capable of
working when
everyone involved
recognizes the
importance of the
task at hand.
Restructuring For
True Teamwork
Policies can go only
so far in changing
the culture of an
organization. We
realized it was now
time to take a hard
look at the
structure of our
organization. Were
there any barriers
to teamwork,
efficiency and
productivity?
The answer was yes.
Years of
unstructured growth
had resulted in a
multi-layered
bureaucracy with
management silos and
a number of
employees who were
not being utilized
to their full
potential.
A first step was
flattening the
reporting structure
of senior management
to promote teamwork
and communication
between senior
management team
members. The team
began meeting
regularly, and each
member reports on
achievements, issues
of concern and plans
for the member's
department or area.
Discussion and
constructive
conflict is
encouraged, and
disrespect for
fellow team members
is not tolerated.
The forum has
fostered more open
and productive
communication
between senior
managers, which has
spread throughout
the organization.
To further the
development of a
team-oriented
culture among the
entire staff, we
have launched
several new
interdepartmental
teams, similar in
structure to the
ETHOS Task Force,
and expanded on
previously existing
ones.
We now have teams
focusing on employee
wellness, workplace
safely and emergency
planning and even a
"fun committee,"
charged with
planning enjoyable,
low-cost events to
build staff
camaraderie.
These committees are
actively engaged in
their missions and
help build new
relationships
between departments.
Just as important,
they give
participants a
chance to practice
communicating
effectively on a
team and managing
healthy conflict
productively.
Measuring
Performance, Not
Popularity
Like many
organizations, AFMC
had long depended on
annual evaluations
by employees'
supervisors to
provide formal
feedback to
employees and
determine merit
raises. We clearly
needed a less
subjective method of
measuring an
individual's
performance--one
that would directly
link each employee's
success to the
success of the
company as a whole
and evaluate overall
performance based on
measurable goals.
We are now in the
process of
implementing
"performance
metrics"--setting
measurable, specific
performance goals to
determine an
employee's success.
AFMC's senior
management team
members have already
started setting
performance goals
for their next year
of employment.
Managers will be
held accountable for
these goals during
their 2008 annual
review. Evaluation
scores will include
three levels of
achievement based on
the level of success
in meeting stated
goals.
All other employees
will begin setting
performance goals in
2009. The first year
is expected to be a
learning process;
the system may be
modified based on
any problems or
challenges we may
encounter.
The ultimate goal is
to integrate
individual goals so
that they are in
congruence with
corporate goals. We
work directly with
the board of
directors to set the
overarching goals
for AFMC, which are
directly reflected
in goals for senior
management team
members and all
staff members.
The system is
designed to further
promote a team
culture rather than
one of competition;
the success of
employees, managers
and departments is
interrelated. We are
forced to recognize
that we are
dependent on each
other and must work
together for the
good of AFMC--and
ourselves.
Communicating
Through Change
The importance of
clear, appropriate
internal and
external
communication during
any kind of
corporate crisis
must not be
underestimated. On
learning that we
were under federal
and media scrutiny,
we decided as an
organization that
transparency was the
best strategy.
We began sending
regular updates to
our partners and
stakeholders in the
community on what
was happening and
how we were
responding. We did
not avoid questions
but answered them
honestly and as
positively as
possible, thereby
preserving critical
and longstanding
relationships.
Transparent internal
communication has
been just as crucial
and perhaps more
challenging. Several
staff members
expressed fear and
uncertainty on
hearing of the
investigation and
media coverage, and
rumors quickly
circulated. Since
AFMC takes great
pride in recruiting
top performers who
are passionate about
their work, we could
not afford to
neglect our most
valuable commodity.
An employee survey
revealed mixed
feelings about
management and
confirmed that
employees were still
confused and worried
about AFMC's future
and their own. We
quickly took steps
to provide accurate
information and
dispel myths and
rumors.
In one-on-one
sessions and staff
meetings, we
reassured employees
at all levels that
they were highly
valued and sought
their help in
ensuring that the
coming changes would
be positive.
To give employees a
chance to voice
concerns and hear my
response firsthand,
I worked with human
resources to launch
"Lunch with the
CEO." Approximately
15 employees are
randomly selected
for each monthly
session, and a
healthy, inexpensive
box lunch is
provided.
After a brief
introduction, the
discussion is open
to employees for
questions or
concerns. Any
worries about these
meetings turning
into a platform to
complain proved
within the first few
sessions to be
unfounded. With few
exceptions,
employees asked
intelligent,
thought-provoking
questions and
offered valuable
insights.
Our Intranet became
an effective tool in
sending a consistent
message to employees
at both offices, as
well as for those
who travel, and has
remained so. We also
established an
open-door policy for
all employees,
encouraging
questions,
suggestions and
feedback on plans
that affect them.
As the lines of
communication have
become more open and
active, we have
learned firsthand
that frontline
employees are often
aware of changes
needed and much more
willing to embrace
them if they are
actively involved at
the planning stage.
We have also
confirmed that our
partners in the
community are as
willing as ever to
support AFMC and
work with us in
meeting our goals
for the company and
those we serve.
The Board's Role
One key to any
successful
transformation is
support from the
top. AFMC's board of
directors has always
been vital in
guiding the
company's pursuit of
its mission, but in
years past, the
board was involved
mainly in decisions
affecting the
overall mission,
rather than policies
affecting all
employees or
day-to-day
operations.
As events unfolded
during the last 18
months, AFMC's board
of directors has
risen to the
challenge and taken
an active role in
providing leadership
through the
sometimes turbulent
process of
self-evaluation and
significant change.
Board members have
worked quickly and
cooperatively to
help tailor efforts
when needed and to
quickly approve
necessary policy
changes.
We recently updated
our board of
directors manual,
stressing the
board's increased
responsibility in
providing direction
and oversight, as
well as active
participation in
board and committee
meetings. The
board's role will
continue to develop,
as together we are
committed to keeping
our corporate
membership informed
and engaged in
setting goals and
strategies and
planning for future
growth.
Better Equipped For
The Future
It's no surprise
that AFMC is still
experiencing growing
pains. Staff members
occasionally vent
among themselves,
and a few have moved
on to other
organizations.
Competition between
departments and
individuals
sometimes interferes
with productivity
and effectiveness.
However, each week
seems to bring
another small
victory or success
story: a meeting
that went
exceptionally well,
a new collaboration
between departments
or simply a stronger
sense of how an
individual job or
task benefits the
organization and the
recipients of our
services.
In answering our
wake-up call, we
have not only become
more accountable but
more nimble and
effective. We have
found hidden
strengths and have
uncovered leaders
who needed help
finding a voice.
Our pace of work has
accelerated, but the
sense of urgency we
felt in the
beginning of our
"rebirth" has now
been channeled in a
new direction:
finding ways to form
new partnerships and
build our product
and service line to
thrive in an
increasingly
demanding and
competitive
environment. That
effort is taking on
new importance as
health care quality
improvement
organizations
nationwide are
facing significant
program changes and
competitive bids for
their federal and
state contracts.
Where will we be in
10 years? In the
dynamic health care
marketplace, it is
impossible to say.
But our experience
has yielded more
than a new policy,
structure and
performance
measurement system.
It has given us new
strength and
confidence as an
organization.
Together, we are
better prepared to
meet the future and
whatever changes it
will bring.
RELATED ARTICLE:
AFMC's ETHOS
Statement
Ethics We adhere to
the highest ethical
standards and act
with integrity in
all aspects of our
work.
Trust Our word is
good. We keep our
commitments to each
other and our
constituents.
Honesty What we say
is true and
forthcoming. We are
open in our
communications with
each other and our
constituents.
Ownership We accept
responsibility for
our actions.
Service We strive to
provide quality
service as we pursue
our mission to
promote excellence
in health care
through evaluation
and education.
Understanding and
complying with these
standards benefits
us all.
• Increases
reliability, trust,
quality and
productivity
• Strengthens legal
compliance
• Reduces future
risk and liability
• Reduces negative
publicity
• Increases our
ability to respond
to crisis
By Nick J. Paslidis,
MD, PhD, MHCM
Nick J. Paslidis,
MD, PhD, MHCM is
chief executive
officer for the
Arkansas Foundation
for Medical Care,
the state's health
care quality
improvement
organization. He is
a board member on
the American Board
of Quality Assurance
and Utilization
Review Physicians
and can be reached
at
npaslidis@pol.net.
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