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7:00pm EDT February 28, 2007

It’s right there, at the top of Mark Wallace’s list of maxims on effective leadership: “Leadership always influences and determines outcomes, not some of the time, but all of the time.”

That one sentence has served as Wallace’s guiding statement as president and CEO of Texas Children’s Hospital for the past 17 years. Wallace says every decision a CEO makes will create a cascading effect throughout the organization, affecting executives, managers and employees alike, and the best CEOs never forget that.

He says it is his responsibility to set the tone for the entire Texas Children’s Hospital organization, which has 52 locations in the Houston area and posted just more than $1 billion in revenue last year. Wallace sees it as his duty to be positive, energetic, candid and forward-thinking so that his employees learn to be the same way. “A lot of it is being very visible in the organization,” he says. “I try to make sure that employees can see my presence, sense my presence and feel my presence. I’m always out and about when I’m at the hospital. I’m interacting with employees, I’m upbeat and attentive.”

Wallace says a CEO with a positive attitude can project that attitude to his or her employees, which is critical to getting them to buy in to your company vision. If you can clearly define your vision and enable employees who can carry out that vision, it can create the momentum that drives your company forward.

Finding the right people
Spreading your vision starts with developing people who can carry out your vision. And it isn’t just a matter of coaching; it’s also a matter of recruiting.

At Texas Children’s, recruiting starts not with the person but with the job to be filled.

“That’s the most common mistake organizations make,” Wallace says. “They don’t think through what is the leadership position all about, what are the characteristics, what are the skill sets and what are the characteristics I want from the person who will fill this position?”

Finding the right people the first time will not only increase the effectiveness of your work force, it will also reduce turnover.

“Jim Collins, the author of ‘Good to Great,’ said it best,” Wallace says. “He said, ‘If I were leading a Fortune 500 company, I would have one priority: Get the best people on the bus, get them seated on the right seat on the bus, and make sure they don’t leave the bus.’

“That’s been my goal: Attract great people, get them sitting in the right seat, and keep them here.”

Wallace tries to fit the right people in the right places with an involved process inspired by the hiring practices of Google.

“If you are just a regular applicant at Google, you will end up talking to an average of about 25 people before you will be selected to be hired,” he says.

Wallace calls it a “selective interviewing process,” and it requires managers from different areas of the hospital to interview a potential employee, many times asking the candidate the same question several different ways. Afterward, all of the managers who interviewed the candidate get together and compare the consistency of the person’s answers. Through that, Wallace and his staff can start to sketch a picture of how the person would fit in.

“No one bats 1.000 when it comes to picking people, but if you have that much commitment going on at the front end of the process, through good, interactive programs led by human resources, your average of picking great people goes way up,” he says. “That’s opposed to a lot of companies, where you might just have one HR person and one person from the unit the person is applying to work in conduct the interview.”

Wallace says he’s looking for a certain “it” within a person. That “it” lets him know a job candidate will embrace Wallace’s vision for the hospital and will be willing to work as a team player to make that vision happen.

Wallace says the characteristics that define “it” are subjective and depend on what the CEO wants. But he says that if you know where you want your company to go, you will know what you are looking for when you see it.

“It’s people that have energy, that project energy,” he says. “I’m not talking about someone who is loud or bubbly or has the personality of a cheerleader. The kind of positive attitude I want comes in a variety of personalities. Quiet personalities can be very positive, very energetic and very contagious.”

Wallace says getting hires right the first time is critical because the chances of changing the attitude of your employees aren’t very good. Most people, by the time they reach adulthood, have their general disposition set.

“You can’t teach attitude,” Wallace says. “People learn and develop their attitudes when they are children. By the time someone is an adult, their attitude is their attitude, and organizations can’t change that.

“That’s why, before you even make the decision to hire someone, you have a really good idea of the personality of this individual, are they driven, and do they have a track record of success.”

Driving down decisions
Wallace says that as a CEO, you need to learn who the most important people are to your company’s success.

And here’s a hint: It’s probably not you. It might not even be the people directly below you. The most important people in a company are what Wallace terms frontline managers. They are the people who interface with customers and provide the face of management to lower-rung employees. In short, any impression a customer or employee gets about your company, chances are it will come from your frontline managers.

As such, Wallace says the ability to enable your frontline managers to make decisions and communicate your vision is critical and should be one of your top priorities as a CEO.

It’s a matter of smart delegation of authority and responsibility.

“Eighteen years ago, when I was being recruited by Texas Children’s Hospital, I told the board that if I come to be CEO, the last thing I want to hear from the board is, ‘Who told you that you could approve that?’” he says. “I told them that I wanted it to be very clearly defined as to what the board is willing to delegate to me in terms of policy regarding operational matters and financial matters.”

Upon receiving the job, Wallace drafted a comprehensive document outlining the levels of authority within the hospital. The document starts with Wallace’s responsibilities, then moves down to what he delegates to senior management, and then what senior management delegates to frontline managers and employees.

As the CEO, it is your prerogative how much of your authority you delegate to those beneath you. But Wallace says if you are going to delegate, make sure you are serious about sticking with it. “Our levels of authority document is now 18 pages long,” he says. “That’s where the proof is in the pudding. If you really talk a game of delegation and empowering frontline management, you have to operationalize it by making it formal throughout the organization. “You can’t just say it. You have to formalize it because, at least here, there are 10,000 decisions to be made every day. So everybody has to know what their levels of authority are.”

He says levels of authority go hand-in-hand with levels of responsibility. If you give someone a certain responsibility, you must also make sure that you have given them the authority to carry it out. If you don’t, bottlenecks develop in the decision-making process. “You need to make your organization as fluid as it can possibly be,” Wallace says. “One of the biggest bottlenecks in any organization is, ‘Well, it’s sitting on someone’s desk,’ or ‘So-and-so hasn’t approved it yet because they are stumped. They don’t know if they really have the authority to approve something like that.’ “You can’t be slowed down by slow decision-making. Your competitors will pass you by. That’s why, in these large organizations, it’s imperative that we push decision-making downward so that the best decisions can be made and the timing is right.”

Wallace says in many cases, the frontline managers are the ones most capable of making the right call if given the proper authority.

“What you are trying to do is get the decision-making down to the leader who knows the most about which decisions need to be made,” he says. “If you ask me to make a decision that is going to impact the radiology unit, I couldn’t tell you because I don’t work in radiology every day. The frontline leader in diagnostic imaging is going to be able to do a much more effective job there than the president and CEO.” Wallace says pushing decision-making capabilities downward is one way a large organization can maintain a degree of flexibility as marketplaces shift. The leaders on the front lines will be able to react to changes in the field far sooner than you will.

“One person can’t make all the decisions,” he says. “Ten people can’t make all the decisions. A hundred people can’t make all the decisions. It really takes an entire organizational structure, people who have been empowered to make a policy or financial decision.”

Through the grapevine
Texas Children’s Hospital is a health care facility, but the logistical hurdles it must clear aren’t much different than those faced by a software company or an auto component manufacturer.

While Wallace doesn’t oversee offices in China or Dubai, he still has more than four dozen locations around the Houston area that fall under his authority. Within those locations is a wide assortment of doctors, specialists, nurses, clerical staffers and other employees. They all come from different backgrounds, and they all need to have the same company messages conveyed to them.

In the world of the CEO, communication is critical. Without it, there is no vision, there is no mission, and employees never get empowered to make decisions.

It’s not about bells and whistles and grandiose statements. Wallace says it’s mostly about grinding away on the same messages, over and over, until everybody has heard it enough times for it to sink in. “Communicate, communicate, communicate, and that communication has to take many different forms,” he says. “Some people want to hear it from me. Others like e-mail and Internet messages a lot more.”

If you emphasize frequent communication, you will eventually find the right mix of print, Internet and in-person communication to reach all of your employees. But at first, that communication will involve a lot of message seeds that never take root. “It’s not that people don’t want to hear it, it’s that people are busy,” he says. “That’s why the messages have to be very repetitive and delivered in a variety of different forms. “It’s communicating in a plethora of different forms, and once you think you’ve communicated enough, you do it a bit more. I’ve been there myself. Some things I hear the first time, sometimes it takes me three times to really hear it and get it. It’s just because we’re busy and distracted. That’s why repeating your message is really, really important.”

HOW TO REACH: Texas Children’s Hospital, www.texaschildrenshospital.org