https://mailchi.mp/a2cd96a48c9b/the-weekly-gist-october-1-2021?e=d1e747d2d8
We recently got a call from a health system board chair seeking our perspective on the system’s ongoing search for a new CEO. At the top of his list: trying to understand how important it will be for the next CEO to be a physician. “We’ve never had a doctor in the role,” he mused. “But now we employ hundreds of doctors. And you’d have to imagine that having a physician as CEO would help with physician alignment.”
While choosing a physician CEO brings great signal value to the medical staff, we cautioned that it’s far from a panacea.
Of course, there are advantages in having walked in a frontline clinician’s shoes, being able to personally identify with their challenges and speak their language. But over the years, working with hundreds of health system CEOs, we’ve found that the most important characteristic of a CEO who will advance physician strategy is the desire to form strong personal relationships with doctors and draw on their counsel.
Does the CEO build a “kitchen cabinet” of physician leaders whom he can consult? Are physicians viewed as something to be managed, a problem to solve, or seen as true partners in strategy? Even more simply, does she like spending time with physicians, or groan every time a meeting with doctors pops up on the calendar? We’ve seen many non-physician CEOs excel at building strong, strategic ties with doctors, and some physician executives, who become jaded by never-ending physician alignment struggles, fail to advance partnerships with their colleagues.
One retiring physician CEO, reflecting on his replacement by a nonclinical executive, summed it up well: “I have a feeling he’ll do well with our doctors. He counts several physicians among his closest friends, which is a great sign.”
The Kansas Heart Hospital in Wichita filed a lawsuit against two former executives, claiming they stole money from the facility and improperly used CARES Act funds, according to ABC affiliate KAKE and court documents.
The lawsuit, filed April 29 in the U.S. District Court in Kansas, accuses the hospital’s former COO Joyce Heismeyer and former CFO Steve Smith of stealing funds between 2015 and 2020. During that time, Kansas Heart Hospital lost more than $31 million, according to the lawsuit.
Ms. Heismeyer and Mr. Smith abruptly stepped down from their roles in fall 2020. The hospital claims the former executives set up large severance payments for themselves before their departures, which prompted an internal investigation.
In its complaint, Kansas Heart Hospital alleges that Ms. Heismeyer and Mr. Smith conspired with the hospital’s former president, Gregory Duick, MD, to divert more than $6 million in hospital funds for undisclosed bonuses and benefits during the five-year period. Additionally, the hospital claims all three sent millions in hospital dollars to an investment account that Dr. Duick owned.
Kansas Heart Hospital also claims the three caused it to lose out on $4.4 million in CARES Act payments. The funds were returned to avoid a federal audit, the lawsuit alleges, but the former executives said the funds were returned because the hospital hadn’t treated any COVID-19 patients.
Dr. Duick also retired from his role in fall 2020. He is named in the lawsuit but is not a defendant, and did not immediately return KAKE‘s request for comment.
In a statement to KAKE, an attorney for Ms. Heismeyer and Mr. Smith said, “Joyce and Steve vehemently deny the allegations and will aggressively defend themselves and expect to clear their names in court.” Additionally, the statement said, “We are disappointed by the Kansas Heart Hospital’s plan to sue and tarnish the reputations of two long time employees.”
https://mailchi.mp/097beec6499c/the-weekly-gist-april-30-2021?e=d1e747d2d8
A recently retired health system CEO pointed us to a working paper from the National Bureau of Economic Research, which indicates that leading an organization through an industry downturn takes a year and a half off a CEO’s lifespan.
It’s not surprising, he said, that given the stress of the past year, we will face a big wave of retirements of tenured health system CEOs as their organizations exit the COVID crisis. Part of the turnover is generational, with many Baby Boomers nearing retirement age, and some having delayed their exits to mitigate disruption during the pandemic.
As they look toward the next few years and decide when to exit, many are also contemplating their legacies. One shared, “COVID was enormously challenging, but we are coming out of it with great pride, and a sense of accomplishment that we did things we never thought possible.
Do I want to leave on that note, or after three more years of cost cutting?” All agreed that a different skill set will be required for the next generation of leaders. The next-generation CEOs must build diverse teams capable of succeeding in a disruptive marketplace, and think differently about the role of the health system.
“I’m glad I’m retiring soon,” one executive noted. “I’m not sure I have the experience to face what’s coming. You won’t succeed by just being better at running the old playbook.” Compelling candidates exist in many systems, and assessing who performed best under the “stress test” of COVID should prove a helpful way to identify them.
https://interimcfo.wordpress.com/2021/04/06/i-just-got-fired-2-0/
Abstract: This article is the second in the series that addresses the initial stages of going through a career transition. Career management articles in the blog have been popular. A transition is a traumatic event, to say the least, especially the first time. These articles address what you should be doing BEFORE your transition occurs.
In the last piece that is the first in this series, I addressed the fact that there is little relationship between how good you are at what you do and the probability that you will end up in a transition.
This article addresses what you should be doing to prepare for an unplanned transition.
The ACHE tracks hospital CEO turnover. The average annual rate is around 18%. According to Challenger, Gray, and Christmas, hospital CEO is one of America’s most dangerous occupations measured by potential longevity or lack thereof in a position. One of my most popular articles discusses some of the many reasons for executive turnover that have little to do with performance. A lot of people are very interested in the topic.
HFMA does not track CFO turnover, but it is probably equally rampant as CFOs too often get credit for substandard organizational performance despite having little control or influence over the incurrence of operating cost or results. CFOs and other C-Suite inhabitants bear a disproportionate risk of having their career disrupted by CEO turnover.
If you start asking around, you might be surprised to learn how many healthcare executives were involuntarily ‘freed up to seek other opportunities’ at least once in their career. When I told my friend John at a reunion that I had decided to go into the consulting business, he immediately accused me (correctly) of having been fired. John went on to tell me how lucky I was because few executives that are disruptive innovators have not been fired at least once. To my friend, having been fired is a rite of passage.
John’s career goal at the time was to become the CEO of a large hospital, and he believed that a transition would strengthen his CV. As fate would have it, not too long after the reunion, I got the call from John and, you know, the rest of the story. John went on from this setback to become the long-running CEO of one of the largest Baptist hospitals in the southeast.
For those who push hard in organizations to get them to change their culture for the better and get on a better track, the risk of being let go is much higher. With one exception, every person that I have ever worked with through a transition has emerged a wiser, stronger person in a position much better suited for their skills and talents. While I would never encourage anyone to go through a transition, the process’s outcome has been both cathartic and career-enhancing.
So, given this risk, what should you be doing? Your preparation for a turnover event should start IMMEDIATELY!! If you wait until you are out, you have waited WAY TOO LONG!! If you do not have a networking database, you need to start immediately to develop this asset. My networking database commenced during my first transition. It now has over 3,000 companies and over 4,100 contacts. Most of my contacts are business-related, and most of them will respond to an email or return a call. Contrast this with the call I get too often from a newly terminated executive asking for connection assistance, that never bothered to record phone numbers or email addresses of people that may be in a position to be of help. Too many friends had contact files stored on a corporate phone or a corporate database and lost them when they turned over a phone or access to corporate systems was terminated. Frequently, access is restricted right before the victim learns of their fate as a security measure of the organization. Getting your data back if this happens is not going to be easy or fun.
For this reason, I have successfully refused to use a company-owned phone or put my networking database developed over twenty years on a computer system I do not control. The problem with having business and personal data on the same device is if you give the organization access to ‘their data, they cannot lock it selectively. When they lock or wipe the device, they are going to destroy everything on the device. My networking database is my most valuable personal asset. There is an article in my blog dedicated to networking. The time to start building your networking database and skill is before you need it.
You should start the process of thinking through the next step in your career. Get out a piece of paper. What do you like about your current situation and wish to preserve? What do you want to change? Where are you willing to relocate? What is your idea of the perfect relationship with a superior? What will the effect of a termination/relocation be on your family, and how will you manage that? In other words, what are you going to be when you grow up? A turnover event is sometimes the catalyst that causes someone to decide to start their own business. Is there a path forward in your current situation, or should you be thinking about proactively inducing your turnover event or at least beginning preparations? People that have been through transitions will tell you from experience that it is a lot easier to get a job while employed than when you are not employed.
A turnover event is a huge psychological and physical burden. Everyone around you is going to be affected. Do not delude yourself into thinking you can manage a transition without help, especially the first one. My dad had a sign in his shop,
Shop Rates
Labor – $20
If you watch – $40
If you help – $80
If you already worked on it yourself, $200
My most significant learning from consulting experience is recognizing when an expert is needed and understanding the necessity of getting my ego out of the way in the process of seeking and availing myself or my client of expert assistance. Clients and consultants do more harm than good by trying to do something they have no business doing in a frequently futile effort to save money. Sometimes, the results are disastrous. We have all heard the adages that a doctor treating himself has an idiot patient or a lawyer who represents himself has a moron for a client.
Contact me to discuss any questions or observations you might have about these articles, leadership, transitions, or interim services. I might have an idea or two that might be valuable to you. An observation from my experience is that we need better leadership at every level in organizations. Some of my feedback comes from people who are demonstrating an interest in advancing their careers, and I am writing content to address those inquiries.
The easiest way to keep abreast of this blog is to become a follower. I will notify you of updates as they occur. To become a follower, click the “Following” bubble that usually appears near each web page’s bottom.
I encourage you to use the comment section at the bottom of each article to provide feedback and stimulate discussion. I welcome input and feedback that will help me to improve the quality and relevance of this work.
This blog is original work. I claim copyright of this material with reproduction prohibited without attribution. I note and provide links to supporting documentation for non-original material. If you choose to link any of my articles, I’d appreciate a notification.
If you would like to discuss any of this content, provide private feedback or ask questions, you can reach me at ras2@me.com.
https://interimcfo.wordpress.com/2021/02/11/i-just-got-fired/
I went out on a social event with a hospital CFO. During the course of the day, it seemed that all I heard was griping about the CEO. Then I heard that the organization was ‘giving back’ most of the last year’s gains, how most of the leadership team were idiots, and on and on. Finally, I told my friend that I thought he was in burn-out and that if he did not do something to alleviate the stress he was bearing, things were not going to end well. A couple of weeks later, I received a call from my friend. The conversation started with, “You will not believe what just happened.” My answer was, “How many guesses do I get?”
In hindsight, it was easy to see this transition coming. I know. It has happened to me – more than once. The circumstances, emotions, and process leading up to a transition event are relatively consistent in my experience. People stop listening to you. You start feeling out of touch with the rest of the organization. Your relationships with peers begin to cool, especially the relationship with the boss. You learn that you are increasingly not invited to important meetings or summoned to participate in matters that are clearly within your scope. You begin to sense divergence of political and or philosophical views with the core leadership of the organization. Your boss and others start going around you to approach your staff directly.
These processes continue until you get invited to an unscheduled meeting where you learn that you are about to be freed up to seek other opportunities.
First, a disclaimer. I am assuming that the termination is not for cause, i.e., violation of policy, violation of the law, or behavior unbecoming. The majority of separations and terminations I am familiar with have little if anything to do with cause and occur primarily because of lack of fit or growing disagreement between the incumbent and their manager regarding the organization’s course. Sometimes, the incumbent’s area of responsibility is no longer meeting the needs of the organization. Too often, internal corporate politics are responsible for deals that started well souring. Sometimes, a transition follows an executive, usually but not always the CFO, digging in over their interpretation of the organization getting too close to crossing a compliance red line. Instead of greasing the squeaky wheel, the organization decides to address the problem by getting rid of the irritant. I have been in a situation more than once where I had to decide whether my integrity was for sale and what a fair price might be. In every case, I elected to avoid the disaster that has befallen executives that flew too close to the OIG’s flame, and in one case, it led to a separation from the organization.
One of my favorite Zig Ziglar quotes is, “Failure is an event; it is not a person.” Just because someone ends up in a transition does not mean by definition that they are a terrible person. Time and again, in these blogs, I have stipulated that for me to follow someone that was ‘bad’ in some way is extremely rare. In these articles, I address termination from the view of the ‘victim.’
I am speaking from experience writing this as I have been through an unplanned transition more than once. I know my problem; I get frustrated with politics, BS, sub-optimization, the toxicity of culture, and eventually lose my sense of humor or ability to eat crap without gagging. Not too long after I start telling people what I really think and, . . . . well, you know the rest of the story. What I believe is a growing risk of being an employee is why I decided to leave permanent employment and become a career Interim Executive Consultant. Regardless of the cause of a turnover event, it is gut-wrenching. Even if you sense it coming, it is no easier to bear. In a matter of a few minutes, you go from someone whose expertise and perspective are in high demand to someone that has no reason to get out of bed. The pain is increased exponentially by those that used to dote on you refusing to return phone calls or answer emails.
More than once, I have received a call from someone looking for help because their deal either has gone bad or is in the process of deterioriation. Invariably, a few weeks later, I get the call. Upon answering the phone, the conversation starts, “You aren’t going to believe what just happened to me!” My first thought is not again! It pains me almost as much to witness someone else go through a transition as it is to go through it yourself. As I said before, my response is, “How many guesses do I get?” I ask this question with a high degree of certainty that the answer is a forgone conclusion.
Sadly, people going through a transition process do not fully appreciate what they are facing, especially the first time. The first problem is the amount of time the executive is going to be unemployed. When this happened to me the first time in the ’80s, I was shocked when a mentor told me to expect a month for each $10,000 of pre-transition compensation. I could not believe this was possible, but I have seen it happen time after time. With the inflation that has occurred since then, a good rule of thumb is probably a month for each $20,000 of pre-transition compensation. Thinking back to my principle that the time to start planning for a transition is now, one of the things to be prepared for is up to a year of interruption in income unless you are fortunate enough to have a severance agreement.
Contact me to discuss any questions or observations you might have about these articles, leadership, transitions, or interim services. I might have an idea or two that might be valuable to you. An observation from my experience is that we need better leadership at every level in organizations. Some of my feedback comes from people who are demonstrating an interest in advancing their careers, and I am writing content to address those inquiries.
I encourage you to use the comment section at the bottom of each article to provide feedback and stimulate discussion. I welcome input and feedback that will help me to improve the quality and relevance of this work.
If you would like to discuss any of this content, provide private feedback or ask questions, you can reach me at ras2@me.com.
HENRY KOTULA 