Second opinions Featured

8:00pm EDT March 26, 2010

Pamela Davis knows a thing or two about taking risks to expand her company.

She knows you can’t be timid if you’re going to become the first hospital in Illinois to build all private patient rooms. You can’t be timid if you’re going to allow open visiting hours when everyone else sets a strict block of time. And you certainly can’t be timid when you call the FBI to blow the whistle on corruption that separates you from growth.

By 2003, Davis, as president and CEO, had already led Edward Hospital & Health Services through significant growth by investing in renovations, expansions, cardiovascular and cancer centers, two health and fitness centers, and two off-campus medical facilities.

But when she sought capital approval from the Illinois Health Facilities Planning Board for a new medical office building, she hit a roadblock. An investment banker called advising her to use a certain contractor if she wanted approval. She brushed it off, only to have her proposal turned down. Then, the contractor approached her directly, urging her to use his firm.

Davis reported the activity to the FBI, who wired her home and office and, in some cases, her person. Her tapes contributed to a snowball of “pay-to-play” convictions that ultimately led to the indictment of former Governor Rod Blagojevich.

Now, Davis is applying the lessons learned back into her business — the lesson being: It takes risk to expand a company.

“The combination of calculated risk and appropriate planning has resulted in huge business success,” Davis says.

But it isn’t a solo effort that amped Edward from serving less than 37,000 patients in 1987, right before Davis stepped in, to more than 440,000 in 2007 or revved the hospital to 2008 net patient revenue of $459.8 million. It’s really a cultural approach, where Davis starts by building an environment where her employees can contribute input and information so she can analyze whether risk is appropriate. That requires getting employees involved and making herself approachable.

“You’re never going to have perfect information or the ability to say that something is black and white in this world anymore,” she says. “So one of the best skills for a leader is to be able to analyze what information you have. You have to make some predictions about the future and then based on the combination of those two, you have to be willing then to make a decision, and that means taking risk.

“Risk obviously then opens you up for success or failure. But the responsibility a leader has to the organization is that you must take appropriate risk in order to succeed and have innovation.”

Elicit input

Many of the risks that boosted Edward ventured into uncharted territories. So it wasn’t a matter of seeing what others were doing and trying to adapt it; it was a matter of doing things differently.

You can’t really prescribe that kind of thinking or train people to stretch to new heights, but you can encourage it.

“The easiest decisions are those that you can base on statistics and on what others are doing,” Davis says. “I find it much more fun to look at the statistics if they’re available but not so much at what others are doing if they’re all doing it the same. That’s where creativity comes into play.

“I don’t know if you can teach creativity or not, and I don’t know if you can make people comfortable taking risks if they’re not a risk taker. What you can do is set the environment for those natural qualities to be utilized. You set an environment where you’re able to use those things.”

The first step is finding employees who are innately comfortable pushing boundaries and innovating. Davis uses behavioral interviewing, or questioning candidates specifically about the characteristics she wants in a position.

“We actually describe the type of behaviors that we want here and try and interview for those, asking people are they open-minded, describe a situation that they were involved in making change, describe some way in which you suggested an innovation and how did you do that,” she says.

Once you’ve discovered naturally innovative people, the next step is establishing an environment where they can shine.

If you want your employees to contribute ideas and get involved in your decision-making process, you have to provide opportunities. A good place to start, especially if you have 4,100 employees like Davis, is with the employees who will be most affected by the decision.

“We involve employees in making decisions and getting their input, and we do that at the unit level,” she says. “If we’re going to do a renovation, we will have the individuals who will be working in that area work actively with us and the architect on how that should be designed.”

Davis offers opportunities for employees to get involved on rotating committees either within their units or in other areas, such as business development or safety. She also organizes focus groups where, along with potential patients, previous patients and their families, employees can respond to ideas she’s considering. But it’s not all abstract talk, especially if the changes will be tangible. For example, she’ll set up mock rooms for staff and patients to walk through, see and feel the changes and respond to how those might affect them.

The key to keeping employees involved is reinforcing their ideas. When you receive input, recognize the employee who gave it with a simple thank you — whether or not the idea will be rolled out.

“That’s where you give positive reinforcement,” Davis says. “If they’re not implemented, that’s not a failure. We show tremendous appreciation and support for people who are willing to come forward with ideas and so people feel good about coming up with ideas. They know not everything can be implemented, and that doesn’t even mean it’s a bad idea, [but] we just have limited resources and time. But it’s fun for people to be a part of the culture and contribute their ideas.”

Fortunately, you can recognize ideas without acting on all of them. Through a Good Saves Program, all of Davis’ employees’ cash-saving ideas are posted online so they can see their ideas whether they are implemented or not.

However you decide to garner input, the underlying lesson is that you give employees a voice — and listen to it.

“You can take a very creative and innovative person in an environment where they would not be able to use those skills and that would be a shame,” Davis says. “The environment here is that we want people to think. We want people to have suggestions and new ideas and to then work within a process so those things that are worthwhile can be implemented.”

Be approachable

It’s no use asking for input if you’ve built yourself up on an executive pedestal that employees have to scale before connecting with you.

Davis strives to keep herself approachable so employees can saunter up to her in the cafeteria for a quick conversation. But approachability isn’t just about keeping a first-name basis with everyone. In some cases, it may mean recognizing that not everyone will know you by name, so you must initiate by reaching out to everyone.

“First of all, I don’t always wear my name tag,?

D; she says. “So I talk to people who may or may not even know that I’m the president.”

After you’ve set the ball in motion, you can rely on word-of-mouth, at least to some degree. But back up what employees say by directly reinforcing how you want them to interact with you.

“I think that stories are told between employees, that she’s easy to talk to or she’s open,” Davis says. “When people see that I’m in the cafeteria and somebody says, ‘Hey Pam,’ that sort of sets the stage that it’s OK for other people to do that, as well. When I make rounds, I say to people, ‘Look, please say hello to me when you see me,’ so it sort of just becomes the norm.”

In order to make that happen, you have to give employees the chance to see you out and about. You’re not going to seem approachable, or even accessible, if you sit behind closed doors all day.

Like the rest of her managers, Davis conducts rounds where she walks around various departments and chats with employees. She follows a template for questions but makes them open-ended to invite discussion and input. She’ll ask, for example, “What things are working well and why? What changes would help you do your job more effectively?”

Davis also offers opportunities for employees to have intimate meetings with her. Employees can sign up for Coffee with the President, and then 10 to 12 names are randomly drawn to meet with her. In those settings, the key to encouraging input is creating an open environment. That boils down to two words for Davis: open communication.

“[It’s] allowing people to ask questions and have you respond,” she says. “You just have to set that style of open, two-way communication.”

At the onset of a meeting, explain the kind of communication you expect, as Davis does for her sessions of Coffee with the President.

“I tell everyone when they come that there are no rules in the forum except that I’d like to have everyone talk,” she says. “I tell them that what we’re looking for are common themes that might make a difference for everyone. For example, parking would come up.

“So then we would follow up with an e-mail to all employees saying at one of the Coffees with the President there was confusion over parking, and here’s what we have now done to rectify that. Once people see that there’s some action and that there’s no punishment, there is no problem with having people come prepared with ideas and information that they want to share.”

That follow-up piece is crucial. When employees hear directly from you — whether in face-to-face meetings or through weekly e-mails — what becomes of their ideas and how you used their input to make your decision, it reinforces the fact that you are listening.

Talking about employees’ ideas makes you seem accessible for future ideas — especially when you share ideas that didn’t quite cut it in reality. Employees will admire the humility it takes to share failures as well as successes.

“You have to be able to be wrong and acknowledge that,” Davis says. “If you’re never wrong, you’re probably not making enough decisions. In fact, the statistics do support that you have to do a lot of new things in order to have one of them succeed. And that requires some humility.

“We tell stories about the successes and things that went wrong. When there’s no punishment having tried something and having it fail, that really sets the stage for taking appropriate risk.”

How to reach: Edward Hospital & Health Services, (630) 527-3000 or www.edward.org