Tag Archives: Leadership

The CFO Confidence Crisis

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Few roles are as important as the chief financial officer at most companies, but the CFOs today who are thinking about tomorrow are growing nervous about a key talent issue. They just don’t think anyone else in the company can assume their role.

Indeed, according to a new Korn Ferry survey, 81% of CFOs surveyed say they want to groom the next CFO internally, but they don’t believe that there’s a viable candidate in-house. Currently, about half of new roles are filled internally. 

“The current CFO is the one charged with identifying and developing that talent, and since they know best the skills required to meet what’s coming, they are realizing the internal bench isn’t fully prepared,” says Bryan Proctor, senior client partner and Global Financial Officers practice lead at Korn Ferry.

The lack of confidence is owed in part to CFOs feeling that their firms’ leadership development programs haven’t kept up with the rapidly changing role of CFO. Core functions such as finance and accounting are increasingly being combined under one role, with CFOs citing a lack of resources or skills and career development opportunities as reasons for the merging. Korn Ferry surveyed more than 700 CFOs worldwide, asking them about their own internal talent pipelines. The top two abilities CFOs feel their direct reports need to develop are “leadership skills and executive presence” and “strategic thinking.” 

“The tapestry of skills and experiences CFOs of today and tomorrow need are vastly different than what was needed in the past,” says John Petzold, senior client partner and CXO Optimization lead at Korn Ferry. “The reason subfunctions are merging is because the focus is less on a role or person and more about the capabilities that need to be covered by a set of individuals.”

In essence, the CFO function is being deconstructed for optimization. Leaders are breaking down necessary functions based on their organization’s strategy and identifying people with a combination of those skills and piecing them together to get the right set of talent to execute against that plan. Core financial functions such as taxes, capital allocation, and M&A still need to be done accurately and in compliance with regulations, of course. But experts say the CFO role is becoming more about adapting and deploying talent in the most efficient manner possible. 

“The leadership profile of the future CFO is less about tactical, direct experience, and more about learning agility, adaptability, and big-picture global perspective,” says Proctor. “That kind of nimbleness and ability to pivot isn’t naturally ingrained in the typical CPA.” 

 

Turn-Around Efforts Start with a Look at Operations

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Even before a hospital shows signs of financial distress, the responsible action is to take a head-to-toe look at hospital operations to fully address financial and performance issues.

Hospital leaders may recognize the need for improvement but may not know where to turn. Since operations span the entire hospital, a head-to-toe operational assessment may be warranted to fully address financial and performance issues.

Following are high-level best practice tips that serve as cost-reduction and revenue enhancement strategies, and can help redirect an ailing situation toward a partial or full turnaround.

Evaluate labor and its costs. 
Labor costs typically account for 50 to 60 percent of a hospital’s operating revenue, so a thorough review of productivity is critical. While a productivity tool can help to set productivity targets, it also integrates a level of accountability toward helping to control labor expenses. Productivity standards, manager involvement, and executive oversight will move you toward your goals of greater efficiency while reducing labor costs.

Analyze supply costs.  
Second only to labor costs, supply spend represents significant expense for hospitals. Often, small hospitals don’t have the negotiating power, so look to the expertise of a group purchasing organization (GPO), or evaluate whether you have the right GPO with your interests in mind. The right GPO relationship can mean supply savings from 10 to 14 percent.

One key area to look at is your supply inventory. Have quantities been adjusted based on volumes, or types of procedures such as those performed in orthopedics or the cath lab? It may be possible to work with vendors to be charged for supplies when they’re needed (just-in-time delivery) versus overstocking for procedures that may be scheduled; this practice helps to free up dollars for other purposes. Also examine inventory “turns,” the number of times per year that supplies are being replaced. Based on our experience, a reasonable level of inventory turn is 9 to 12 times per year.

Examine revenue cycle management. 
Because the revenue cycle is a complex function, points in the process may be overlooked or broken. Your hospital may also face common challenges such as keeping your chargemaster current and competitively priced, and keeping up with each payer’s unique rates and payment methodology.

Additional areas to evaluate and address: ·

  • Have managed care contracts been updated or renegotiated? ·
  • Compare charges to reimbursement. Although you may be charging for an item at a fixed cost, it doesn’t necessarily mean that you will be reimbursed at that level.

Move ahead with greater confidence. 
Your overall action plans should identify who is responsible and accountable for each area of evaluation and opportunity. The discipline of frequent review helps to ensure that you are not drifting off the plan and that progress is occurring across all areas. A new level of accountability across team members is one indication that you have arrived. Be mindful that it does take time and diligence to impact turnaround efforts.

THREE C’S FOR LISTENING LIKE A LEADER

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Three C’s for Listening Like a Leader

THREE C’S FOR LISTENING LIKE A LEADER

Listening is a vast ocean surrounded by empty beaches.

I’ve been paying attention to listening, both my own and others. You’re more likely to meet a red-crested tree rat* than to meet someone who actually listens.

5 reasons shallow listening is normal:

  1. Desire. Listening is such a bother.
  2. Ignorance. You might listen if you knew how.
  3. Time. Hurry up. The clock’s ticking.
  4. Energy. You don’t have energy to listen deeply.
  5. Discipline. On a list of “hard things to do,” listening is near the top.

Set the stage for deep listening:

Unfocused conversations feel like chasing chickens.

Establish conversational direction or you’ll end up exhausted and disappointed.

  1. What’s on your agenda today?
  2. What good thing might come from our conversation?
  3. What would you like to accomplish during this conversation?
  4. What’s important for you to bring up during this conversation? What’s important to you about that?

Three C’s for listening like a leader:

#1. Character.

#2. Calmness.

Breathe deeply.

Although listening takes energy, it requires a calm spirit.

Inner agitation blocks listening.

#3. Compartmentalization.

Set a fence around your listening space. You don’t have anything else to do except attend to the person speaking.

Explain time limits before you begin. Because listening requires rigor, you might need to set short-time limits.

After explaining limits, attend fully.

The character of a listening leader:

#1. Courage.

Churchill put it this way, “Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”

#2. Compassion.

“Compassion is the quality of having positive intentions for others. … It’s the ability to understand others and use that as a catalyst for supportive action.”**

#3. Confidence.

Insecurity seems to loosen tongues and close ears.

#4. Openness.

A closed mind lies behind closed ears.

Poor listening is a character issue.

What’s one thing you could do that would make you a better listener?

 

The More Things Change, the More They Stay the Same

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LEADERSHIP FREAK READING LIST FOR MARCH

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Leadership Freak Reading List for March

I’m currently two thirds the way through The Education of a Coach by David Halberstam. It’s the story of Bill Belichick, coach of the New England Patriots.

The book is a bit dated, published in 2006, but it’s really the story of a father’s influence.

Steve Belichick, football scout for Navy, had a huge influence on his son Bill.

Dad:

Bill is often quoted as saying, “Do your job.”

Hard work was part of Bill’s life because his father worked hard, harder and longer than other football scouts. Bill’s dad reminds me of mine.

I was fortunate to be brought up on a dairy farm. Hard work is synonymous with life for dairy farmers.

My dad was the hardest working man I ever knew. He never preached about hard work. He simply did it and expected his children to live that way too. Frankly, we didn’t think there was any other way.

Work:

I don’t understand people who work so they don’t have to work.

We are made to work. Work gives meaning to life.

Success apart from hard work is shallow, degrading, and unfulfilling.

The work of leadership begins with modeling the way.*

#1. Do the work.

Get off your butt. You can’t lead from a chair. If you aren’t sure what to do. Do something and learn as you go.

Show the way. Don’t simply point the way.

  • Ask more of yourself than you ask of others.
  • Get dirty. Perform menial tasks.
  • Identify with support staff.
  • Never look down on people who do work that’s different from yours. Organizational silos disrespect the work of others.

#2. Support others while they work.

  • Challenge and cheer.
  • Notice progress.
  • Honor the qualities that produce results – things like industry, discipline, and attention to detail.

#3. Remove obstacles to successful work.

Make the work of others less frustrating and more productive. One corporate leader told me, “My main job is figuring out how to remove obstacles that slow my team.”

If you have position, you have authority to eliminate barriers and create connections.

Reading list for March:

What are you reading in March?

 

Tapping real-time analytics to create a digitally enabled organization

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As a society, we can and are collecting data in many ways. The question is not how to get more data, but how to use it effectively?

By 2020, approximately 1.7 MB of new information will be created every second for every human being on the planet.1 That is an incredible amount of data!

Yet, of all the data the world is creating both personally and professionally, less than 0.5 percent of it is ever analyzed and used.2 Analyzing less than 0.5 percent leaves a lot of opportunity on the table.

Not just volume, connection and integration

Clearly, as a society, we can and are collecting data in many ways. The question is not how to get more data, but how to use it effectively? In healthcare, how do we capture greater knowledge from the right data at the right time for truly actionable insights?

Many healthcare organizations have started down the road to digital transformation by capturing more data from various service lines with different technologies and systems. However, that information is often captured and used within silos, which limits the impact. The true transformational change occurs when we put all of the data together – i.e., integrate the data, analyze and then share those insights across the organization.

Rapid analysis, insights and action

Better integrating and connecting data is, however, only one part of the equation. Insights from big data days, weeks, months or even years later limit our ability to make corrections and find opportunities for improvements. Speed to insights from the data is critical.

Technically, the data must be made available and analyzed in time to affect decisions. For example, near real time information is typically important for clinical care decisions. Once the data, analysis and insights have been generated, the individual making the decision needs to make that information part of the workflow and the decision-making process.

The digitally enabled organization

The organization needs to build trust in and adopt these new insights as tools to assist making the best decisions for each patient at the right place at the right time. This requires making the organization a digitally enabled organization.

The digitally enabled organization leverages experience, expertise and the best data-driven insights to make the right decisions, and operate most efficiently. The digitally enabled organization is agile and is enabled by the right insights at the right time. The digitally enabled organization drives the expansion of precision medicine, transforms the delivery of care and improves the patient experience.

Witness firsthand how digital agility and the digitally enabled organization can improve patient care and engagement. For example, organizations can create data-driven solutions to patient leakage challenges and rise to their operational opportunities. The result is optimal utilization and enhanced patient experience.3

Into the future

Achieving a digitally enabled organization lays a strong foundation to adopt new tools, ways of working and driving continuous improvement. This shift also allows the organization to incorporate predictive approaches and other advanced analytics that may include artificial intelligence. A layer of trust in insights creates a powerful data-driven culture that is transformative.