Gwen MacKenzie knew Sarasota Memorial Health CareSystem was a great organization when she joined as presidentand CEO in May 2005, despite the fact that it was losing asmuch as $30 million a year.
The focus of the 4,500-employee organization had been solely to provide good patient care and services, while the financial aspects weren’t always a priority. Everyone assumed thatas big and strong as the organization was, it would be aroundforever.
Yet, behind the curtain, things weren’t as rosy as manythought.
Many employees, including doctors, didn’t know the organization was losing money because the focus wasn’t on thefinances.
“But my position was, it doesn’t go on forever by chance,”she says. “It goes on forever with good solid performance. Myfocus was more performance-based. If we do a good job andmonitor our patient satisfaction, if we have people who like towork here and understand what we are trying to do forpatients, then the financial results will follow.”
Along with shifting attention to data and finances,MacKenzie had to get everyone on the same page and startcommunication between departments. She let everyoneknow how much the organization was losing and why theyneeded to turn things around to keep moving forward.
“You always have to sort of get it to a common understanding, and that shouldn’t be that dissimilar from group to group,including the doctors,” she says. “The common understanding was if we lose $30 million a year, we’re not going to beviable long term as an organization, and the communitycounts on us.”
Look at data
Because efficient customer service results in better customer satisfaction and return business, MacKenzie neededto improve services at the hospital system to grow patientvolume.
One of the areas the community was not satisfied with wasambulance diversions away from the emergency roombecause it was often at capacity.
So she took steps to establish a policy that would guaranteedoctors see patients within 30 minutes of arrival.
“That’s not good for a community when you are turningambulances away,” she says. “What happens in the emergency room world is, if we are on diversion, then it overloads the next hospital, and they go on diversion and thatoverloads the next hospital. Pretty soon, you’ve got everyhospital in the region on diversion and the EMS [emergencymedical service] authority has to say, ‘None of you are ondiversion.’”
In the beginning of the process, MacKenzie met weeklywith her team and different departments and sorted throughdata related to time and efficiency, such as how long it tooka doctor to see a patient. They also looked at auxiliary operations that could affect the ER, such as how long it takes labtests to come back, how long it takes an admitted patient toget to their bed and how long it takes to clean beds.
“So, we never look at anything in isolation,” she says. “Weuse lots of information. The key to that from a leadershipperspective is that you not become paralyzed by information.”
To sort good information from bad information, you haveto continue to look at the information and refine it, but youalso must be open to making mistakes and changing direction when it’s appropriate.
The clues to what needs to be changed will come out ofdiscussions with managers.
“We set a direction, but we’ve had adequate discussion,”she says. “We encourage a lot of debate, but when we getdone, we have a conclusion. It might not be my conclusion;it might be somebody else’s conclusion. But, we have a conclusion and a direction. We don’t leave confused.”
When you get people talking, good things happen, and people come away with a better understanding of what’sexpected of them.
MacKenzie says the 30-minute wait proposal prompted alot of interesting discussion between the departments. Forexample, lab people were accustomed to working in silosand, like many departments in organizations, they were intheir own little world.
The lab people said it took 20 minutes from the time theygot the sample to the time they sent the result back. The labhad no control over what happened before or after those 20minutes.
“People want to segment only into their own little world,”MacKenzie says.
That was until MacKenzie allowed the lab employees to ownthe whole process.
“We gave them the power over the process,” she says. “Andthe lab people came back the next week and said, ‘We understand that. Now, we need to add nine more people.’ We said,‘No, we probably have the right number of resources, but, ifwe don’t, we’ll add them. But now is not the time to addthem, it’s really to look at how you do things.’ Then, theycame back the next week and said, ‘Well, now we get it. Now,when the lab tests come to us, they are going to come in redtubes so we know that it’s the ER, and that we have this commitment to turn it around in this period of time.’”
The key is to explain to the people involved the objective andlet them figure out the solutions.
“If you make the commitment and then you give people theflexibility to problem solve because I wouldn’t know how todo it in the lab, I’m not a lab person they eventually cameback with the right approach,” MacKenzie says. “They knewthat they’d be sitting in a meeting every week and everyoneelse would be looking at their results, in addition to them. So,it’s also a sense of pride. You don’t want to be the one thatstands out.”
But, like any change of process, not everyone is going toagree. In fact, some people were so against the change, theyleft the organization after Mackenzie brought the idea up.
She says people usually select themselves out if they don’twant to get on board with the change. However, most peoplewill give the change a chance, as long as you stay true to it.The hospital’s emergency room director later told MacKenziewhen she first brought up the idea of the new policy thedirector updated her resume. But, she stuck with it and nowshows other hospitals how to implement the emergency roomprocess.
“That’s the discipline part,” she says. “What confuses peopleis if you keep changing direction or you don’t use the same simple objective over and over. If you’ve got too many of them,then it’s just initiative fatigue.”
Get out of your office
While MacKenzie says data is critical to the success of a company and can lead to improvements in operations like increasing emergency room efficiency, data can’t replace your abilityto be out in the organization.
“I say that because sometimes the housekeepers can tell youthe most critical of things,” she says. “If you are not out andabout connecting with all levels of people, and that’s where thecommunication process comes in, you might miss something.Leaders have the best of intentions, but they often tell youwhat you want to hear, what the objective is.
“It’s not that they’re not connected. Generally, you want tosay things that are pleasing and that sort of go with the objectives, and no one wants to bring up the contrary. But, I thinkyou have to have some contrary in an organization, and youhave to have people willing to speak up.”
In order to establish that type of environment, MacKenziemade it a priority to make sure she was visible and makingrounds in all t he departments of the organization, which issomething MacKenzie and her management team still practicetoday.
She says the senior executives are often the mysterious people in an organization, so it’s just as important that they visit with employees. It’s required that MacKenzie and her management team visit with their approximately 50 departmentsand 15 off-site locations every couple of weeks to make surethey are staying in touch with employees.
“It’s required because rounding is one of the things that, ifyou had to leave it to chance, it would be the thing that I can’tget to today because there is always some emergency or somemeeting or someone needs to see you,” she says. “So, werequire that we actually put it in our calendars, and we do.
“So, it doesn’t leave it to chance. It’s scheduled so that thebreast center knows we are coming on a specific day. We generally use it for celebration and recognition. We say to the leaders, ‘Who’s done a great job, and who can we recognize whilewe are here?’ But, oftentimes, people are free to talk aboutwhat doesn’t work or what’s working well and we need to domore of it.”
By her second year on the job, MacKenzie began hostingbreakfast, lunch and dinner gatherings every month with staffto keep in touch with her employees. While she has quarterlyreviews in a town-hall setting for the whole organizationwhere she comes with an agenda, the breakfast, lunch and dinner idea is open for people from any department to speak withMacKenzie or with each other about what’s on their minds.
“It’s interesting because you would think the nurses mightnot be interested in what the housekeepers want to talk about,but you don’t find that at all,” she says. “You find a lot of camaraderie. (One night), we got on one topic, which was communication devices, and we had four different groups weigh in. Ithink it’s enlightening for them to see how common the issuesare across different categories of people.”
Those open lines of communication helped the companyshow steady improvement.
In fiscal 2005, it had operating revenue of $477 million, posting an operating loss of $6.5 million. In fiscal 2006, operatingrevenue was $514 million, and the loss was $1.7 million. In fiscal 2007, operating revenue was up to $550 million, and theorganization eliminated the loss, posting $19.4 million in operating income.
“(Open communication is) promoted, and we see in our surveys that people believe this is an open organization and thattheir opinions are valued and that they have access to leadership,” she says.
Because MacKenzie couldn’t have turned the organizationaround without everyone chipping in, most employees hiredbefore October 2007 received between $75 and $250 based onhours worked because the health care system did better thanthe original budgeted goal.
“Which, on the face of it, it’s not a lot of money, but, I think,it was more the principle,” she says. “We’re sharing in theresults.”
The reasoning for the reward was simple.“Because without everybody’s hard work in the same direction, we aren’t going to do better than what our budget callsfor,” she says.
HOW TO REACH: Sarasota Memorial Health Care System, (800) 764-8255 or www.smh.com