Driven by unsustainable cost increases, increased public and regulatory scrutiny, as well as shifting alliances, healthcare is undergoing a radical transformation. New competitors, value-conscious employers and consumers, new technologies, changing payment models, and shrinking reimbursements are altering where and how care is delivered. As a result, healthcare organizations are under increasing pressure to deliver differentiated outcomes, excellent patient experience, and manage quality and total cost of care – across the continuum – in order to remain competitive.
Clinical processes are at the core of the seismic change that’s under way, and hospital systems need physician leaders who can play a central role in restructuring these to fit new requirements. Unfortunately, many health systems have fallen short in attracting future physician leaders and equipping them to be effective drivers of innovation and organizational change. Acknowledging the challenge of developing leadership skills, healthcare systems must take a hard look at the motivational, educational, and organizational barriers to cultivating future physician leaders. Armed with new-found insights, many organizations have successfully transformed their leadership development programs.
A systemic approach to developing future leaders
Take the case of a highly regarded healthcare system that recognized its continued market dominance depended on their ability to develop high-performing physician leaders. In addition to identifying future leaders, it wanted to ensure they were effective business strategists and change agents. This meant equipping them with the ability to address physician burnout and lead change in areas such as value-based care, clinical standardization, delivery innovation, and consumer-centric engagement models.
In shaping its physician leadership development strategy, the system reviewed the effectiveness of prior efforts and benchmarked its programs against those of peer institutions. It found the results of prior efforts were modest at best, with less than a third of physicians that went through formal training programs considered highly prepared to assume leadership positions. Working with an external partner, the system identified key factors that had limited their success.
• The system lacked clearly defined leadership career paths and incentive mechanisms for aspiring physician leaders, many of whom were in their prime earning and productivity years
• Past efforts had focused on current leaders (e.g. directors, chiefs, and chairs), not the identification and development of high potential future leaders
• Development opportunities were sporadic and not well-integrated into a broader leadership development framework (e.g. succession planning, performance reviews, recruiting, etc.)
• There were insufficient opportunities for leadership development program participants to apply classroom learnings in specific projects spanning clinical/business processes – expectations regarding project involvement were not clearly communicated
• Mentorship opportunities with experienced administrative and clinical leaders were lacking
Learning from this analysis, the system designed a physician leadership program that directly supported its mission and strategic goals. It featured a curriculum delivered by business faculty at a local university and mentoring from experienced senior leaders. Together, this created real-world opportunities for participants to apply learnings and hone skills. It also included clearly defined career paths as well as processes for vetting and selecting program participants, tracking individual development, and managing leadership succession. Senior administrative and physician leaders were actively engaged to shape program objectives and curriculum design criteria as well as ensure buy-in.
Key ingredients for success
Organizations committed to attracting, developing, and retaining strong physician leaders need to combine a strategically relevant training curriculum with a robust leadership infrastructure that links critical roles to strategic goals and fosters ongoing development. They also need to do a better job attracting and retaining aspiring physician leaders, making administrative career paths more financially and professional appealing. By focusing on the following tactics, healthcare organizations can develop and position their physician leaders as vital contributors to long-term success:
- Ensure that physician leadership roles are designed to support strategic goals and new care delivery models by clearly specifying role charters, key accountabilities, interfaces, decision-making authority, and required competencies
- Establish career paths using significant extrinsic incentives to attract and retain high potential physician leaders
- Build a robust recruiting process, including supporting communications, that reinforces the organization’s commitment to developing physician leaders and makes a leadership track attractive to high potential candidates
- Conduct individual competency assessments to identify strengths/weaknesses of aspiring physician leaders and create development plans focused on the highest priority needs
- Build an integrated curriculum architecture (using external resources, as appropriate) that provides core content and applied learning opportunities
- Continually assess the effectiveness of leadership development programs, including applied learning experiences, and ensure that HR systems (e.g. performance management, hiring, succession planning) support leadership development goals
- Clarify expectations regarding participation in applied learning activities and provide a support structure to optimize application of program learnings (e.g. mentors/senior leader sponsors, project charters, project management support, etc.)
Making the investment to develop physician leaders during this time of uncertainty and increased margin pressure is not a small decision. However, it’s clear that the competencies that made physicians successful yesterday are not the ones that will position them as effective business and change leaders moving forward. The development of physician leaders can no longer be looked at as a strategic option by healthcare leaders – it’s a strategic imperative.
Michael Abrams, MA is Managing Partner and Gordon Phillips, MPS is a Consultant at Numerof & Associates, Inc. (Numerof). Numerof is a strategic management consulting firm focused on organizations in dynamic, rapidly changing industries. We bring a unique cross-disciplinary approach to a broad range of engagements designed to sharpen strategic focus, increase revenues, reduce costs, and enhance customer value. For more information, visit our website at www.nai-consulting.com.