Healthcare Matters

I’ve been all over the employment statistics in healthcare lately. Whether pulling information from government sources like the Bureau of Labor Statistics (BLS) or compiling information from various healthcare head hunters, several interesting trends emerge that are unique to healthcare:

• The healthcare sector stands alone as the most promising employer over the next decade. As said in a previous post, roughly 1 in 8 or 9 Americans are going to hold jobs in this marketplace. The personal nature of healthcare; the fact that it’s our nation’s dominant employer and most likely the largest employer in our home towns makes “everything healthcare” more politically charged than oil makes the Middle East.

• While the sector will generate demand for 4 million new jobs over the next 8 years, that statistic doesn’t reflect the number of jobs that will actually change hands. Several recent surveys indicate that somewhere between 20% and 30% of those currently employed in healthcare are actively searching for other healthcare jobs.

• CEOs turn over in healthcare more than any other industry. Why? Because there are more of them for starters –and as “baby boomers,” they’re at retirement age. But there’s more to the story. “We’re seeing a growing number of executives throw up their arms and say, ‘I’ve already gone through major changes in health care, and I’m not really in a position where I want to go through this major change again,’” said Mark Madden, senior vice president of executive search of recruiting firm B.E. Smith. The recent data echoes the sentiments of Steven Valentine, president of the consulting firm Camden Group, who noted that the industry will see more hospital CEO burnout this year. Thomas C. Dolan, president and CEO of the ACHE added that “these findings underscore the need for healthcare organizations to have good succession planning in place to ensure organizational success when changes in senior leadership occur.”

These are interesting general trends for sure, but even more compelling if you happen to be a SCM professional. The opportunities for SCM professionals to move laterally and build their base of experience has never been brighter. But we must be willing to look at lateral movement in a positive context –which is contrary to the advice you’ve probably heeded to this point. We don’t always need to be thinking about moving up the ladder. Sometimes, a strategic move to the side –whether it be a new challenge, a project, a favor, etc., holds a delayed dividend, but a dividend nonetheless.

The Harvard Business Review recently published a thoughtful piece by Ron Ashkenas, a senior partner at Schaffer Consulting that extolled the virtues of lateral movement –especially these days. It not only stands job seeking conventional wisdom on its head, but it’s instructive to managers who are challenged with employee retention.

Here is Ron’s post:

—I once worked with the new CEO of a well-known global firm that was barely breaking even. The CEO’s mandate from the board was to improve profitability. To do this, he planned to institute global manufacturing platforms so that product “families” would have the same core design no matter where in the world they were sold. The reduced-cost savings would be in the tens of millions of dollars.

This initiative would take a couple years of hard work, so the CEO tapped the president of the North American Division to take the lead on a full-time basis. This person, let’s call him Bill, had been with the company for many years, understood the engineering and supply chain issues, and was well respected by everyone.

The only problem was that Bill thought the assignment would be personally embarrassing. “Look,” he said, “I currently have 10,000 people reporting to me and responsibility for the largest P&L in the company. If I ran a task force, everyone would think I was being put out to pasture. It would be better if you just fired me.”

The shocked CEO stood his ground and argued that Bill was the perfect fit for this assignment, and how critical it was to the company. Eventually Bill gave in and his new position was announced. Sure enough, in the days that followed, Bill received dozens of emails and calls offering consolation on his “demotion” and help in finding a new job elsewhere. The head of Human Resources even asked the CEO whether Bill’s job-grade and performance bonus should be reduced. Not one person congratulated him.

What’s going on here? Why do people assume that a big title trumps a value-creating initiative? The answer is that hierarchy is more than just a way of designing the organization: It drives how we think about relationships, contribution, careers, and success.

Most of us have grown up assuming that career success is vertical. We climb the ladder and move from junior positions to senior ones. As such, we implicitly compete with others because there are fewer positions as we advance. It’s like a reality show where people get kicked off the island.

The problem with this powerful paradigm is that today’s work is no longer divided up into small tasks that require higher and higher layers of management to put together. Instead most work is accomplished through horizontal processes that cut across different functions, geographies, and specialties. Therefore real success comes less from controlling people that report to you, and more from the ability to align stakeholders who surround you.

Given the hierarchical structures of most organizations, we will still have upward career paths. More and more however, the real contributors will be the process owners and project leaders that are able to provide horizontal leadership. To support this shift, organizations will need to reward and recognize horizontal contributions as much, if not more, than hierarchical positions. At the same time, each of us will need to overcome our personal assumptions about moving up the career ladder, and think more about how we add value across. When that happens, everyone will congratulate “Bill” about his promotion to the task force leadership role.—

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Those of you afflicted with common sense may not appreciate Ron’s message as much as those who don’t. Regardless, making one’s self indispensable has always been the name of the game.  And getting any/all employment “understandings,” “deals,” and/or “quid pro quos” documented still remains solid advice.

Thanks again to Ron Ashkenas and the Harvard Business Review.

—Tom Finn