Becker's Hospital Review

8 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 5 Things the Most Innovative Health Systems Do Differently (continued from page 1) Steven Strongwater, MD, was named chief transformation officer of Danville, Pa.-based Geisinger Health System in August 2012. He recognizes that innovation is not a universal discipline in healthcare, and that some hospitals may be more concerned with keeping their doors open. "There's this Maslow scale of hierarchy," he says. "Depending on how financially strong your organization is, you may not be focused on an innovation vision. We are in some ways a national laboratory. We have a duty to share what we discover here." Innovation is on every hospital leader's radar to some degree, especially since a number of large, integrated health systems have established departments, centers or leadership roles to formally oversee their innovation efforts. Still, some organizations have thoroughly instilled innovation as a cultural norm. Dr. Strongwater says he doesn't go one day without hearing a new idea from one of his colleagues. How does this come to be? There's no how-to instruction guide for the type of innovation success Geisinger has achieved, but there are a few noteworthy things the system does differently that leaders can uphold within their own organizations. Dr. Strongwater attributes Geisinger's innovative culture to self-reinforcement, a leader who encourages independent thinking, trial and error and a drive to make work easier. Jennifer Radin, who leads Deloitte's Healthcare Human Capital practice nationally, works closely with hospital and health system CEOs. She says the ease with which people can innovate is largely determined by an organization's talent development and whether leaders are systems thinkers. Clinicians and staff individually seek to innovate to better serve patients, however, this work is often in spite of the organization's structure, incentives and decision-making lines of control rather than these organizational elements fully supporting the innovative activity. It may very well be a combination of all these things and more. Here are five things truly innovative organizations do differently. 1. They know innovation resembles another word: investment. No leader can sit back, cross his or her fingers and hope innovation spreads like wildfire within an organization. This is especially true for hospitals, where most employees are focused on patient safety and quality care. To them, innovation can easily become an afterthought. Scott Anthony, managing partner of innovation consulting firm Innosight and writer for Harvard Business Review, has said innovation is unnatural. Any business was built to scale yesterday's business model, not discover tomorrow's. Unless leaders make it clear that innovation is an organizational value and discipline, it won't stick, especially during the operational demands of the day-to-day. Or, as Mr. Anthony put it: "Any executive that doesn't make innovation a strategic priority, ensure there is ample investment in it and approach the problem strategically is committing corporate malfeasance." Leaders of innovative organizations match any rhetoric about innovation with personal involvement. They want employees to think of solutions to problems they observe, even on the front lines, and they want to hear about them. Ms. Radin says this type of leadership goes far beyond CEOs being brilliant visionaries. They must voice their expectations, understand the talent levers in their organizations and invest resources into feeding ideas within their hospitals and health systems. "There's a group of CEOs who are visionary about what needs to happen, but they but don't necessarily realize that you can't just change operations," she says. "To implement strategies, you must do all the right things from culture through individual talent development and training." More specifically, Ms. Radin says healthcare reform is demanding hospitals and health systems invest in their physicians and help them become business leaders — in the complete sense of the term. "They need to actually be able to deliver business acumen and manage profits and losses, like general managers in any other industry," says Ms. Radin. "They need those skills from masters programs. Many want do to this and are very capable of doing it," she says. Talent development and training demonstrate an organization's commitment to innovation by empowering professionals to bring new solutions to old problems. 2. Their innovation process works like a flywheel. What's another way for organizations to show they're serious about innovation? By tying compensation to it. In its compensation model, Geisinger ties a portion of executive pay to how much leaders innovate. Executives have the opportunity to build an idea, demonstrate it as an innovation pilot, publish their finding and receive a financial reward. [Editor's note: Although there is no hard data on the nationwide popularity of such a pay system, spokespeople at Geisinger said it is a very novel approach and they were not aware of other organizations with similar pay structures.] Aligning financial incentives to innovation activities certainly sends the message that a health system is serious about it, but Dr. Strongwater says there's more to Geisinger's success than executive bonuses. Instead, problem-solving has taken on a life of its own. It's continual, collaborative and — most interestingly — enjoyed. One person will propose an idea, another person will try to make it better and the process builds upon itself. Dr. Strongwater noticed this immediately, right after he began working at Geisinger about one year ago. Before then, he had served as CEO of a 600-bed teaching hospital. "The instant I came here I saw a difference," he says. "Everyone wanted to try new things. In prior roles, you had to convince people to try something. That's a cultural transition and it's self-reinforcing. Some of the things we've done — closing care gaps, improving medication adherence, using bundles for chronic disease care — came out of conversations from people sitting around a table trying to innovate." 3. Leadership knows when to relinquish control. Innovation in healthcare is interesting, given the risk-averse nature of the industry. It's not necessarily the most creative of sectors, but hospital CEOs can still nurture inventiveness. One way is to establish core goals, communicate them regularly and know when to step aside to let people take to their creative processes. Geisinger President and CEO Glenn Steele, MD, PhD, is known for encouraging executives and professional staff to bring entrepreneurial sensibilities to their work. The result: a culture conducive to brainstorming and independent problem-solving. "Dr. Steele has set the pace," says Dr. Strongwater. "He's organized [innovation] in a way where everybody knows they have to do it. He is a very clear thinker and has a vision for transforming healthcare which is patientcentered, value-driven and evidence-based. Those core elements set the direction, and he allows people in the organization to work independently and not be micromanaged." Throughout her work, Ms. Radin has noticed certain CEOs have more success instilling cultures of innovation. Those who do are "systems thinkers," she says. When executing a new care delivery model or clinical pilot, the most innovative CEOs address all components of the hospital. They question how an innovation will affect each and collaborate with stakeholders with diverse perspectives to plan the implementation. "It's about an understanding of multiple disciplines," she says. "It's about recognizing the connection between health outcomes, clinical operational changes and how we get people to work differently." 4. Innovation isn't seen as a short-term fix. There are two groups of hospital CEOs today, says Ms. Radin. In one group, CEOs are burying their heads in the sand. They are still saying, to an extent, that the demands

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