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Taking Hospital Governance to the Strategic Level

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Taking Hospital Governance to the Strategic Level

  1. 1. Advancing Governance to the Strategic Level © Signature Resources 2015 1 Les Wallace, Ph.D.
  2. 2. 300+ Boards 1,000+ Board Meetings Over 100 Board Assessments © Signature Resources 2015 2 The BAD, the frustrated, the disengaged.
  3. 3. Who is this Guy?  Ideal 21C job: Grandparent!  University professor / administrator  Hospital administrator—traditional Board  International consulting company… Touch 20,000 people yr. / Coach 28 Execs / 17 Boards a year  Past board service: Security First Bank and Counterpart International  Current board service: World Future Society © Signature Resources 2015 3
  4. 4. Who is this Guy? Governance Executive Leadership Organizational Culture © Signature Resources 2015 4
  5. 5. Leaders are Learners © Signature Resources 2015 5 Learning is “new” perspectives, knowledge and skills. Also…confirmation of what you’re currently doing! Governance Leadership Organizational Culture
  6. 6. My Job Today © Signature Resources 2015  A look @ high performance governance practices as assembled from the governance literature worldwide.  Candid opinions based on work with 300+ boards: For-profit, non-profit, international, financial, healthcare, community, national associations.  Likely to challenge assumptions, stretch thinking.  Yes, all ideas will be relevant to large and small hospitals.  Open dialogue—your question is not an interruption! 6
  7. 7. © Signature Resources 2015 7 Synthesis of Elements of Governance
  8. 8. © Signature Resources 2015 8 Our Learning Journey Today  What boards are saying about their own governance.  Board leadership succession.  Strategic Thinking and Planning  High Performance governance practices. *********************************************** • CEO / Board Partnership
  9. 9. Shaping Our Governance Future “Professionals generally know so much about what they know that they are frequently the last to see the future differently.” Edie Weiner & Arnold Brown, Future Think © Signature Resources 2015 9 Getting out of “committee mindset.” “Your biggest competitor is your own provincial view of your future.” Watts Wacker, The Visionary’s Handbook
  10. 10. Shaping Our Governance Future Many of our assumptions about what health care can become or will become are anchored in deeply rooted assumptions that we don’t acknowledge or challenge. “The problem is never how to get new innovative thoughts into your mind, but how to get the old ones out.” Dee Hoc, MasterCard © Signature Resources 2015 10
  11. 11. Governance and the 21st Century VUCA Future  Volatility  Uncertainty  Complexity  Ambiguity Canadian Special Operations Command © Signature Resources 2015 11
  12. 12. 21C…It’s Quite Different That’s Why Strategy Development is so Important Speed: blinding, touching every aspect of life. Complexity: quantum leap in mix of related forces. Risk: upheaval raises threats and risks of “new ideas.” Change: radical, drastic, sudden. Surprise: unimaginable—challenging sensibility & logic. Oversight: healthcare, financial services, privacy, safety. Disrupters: new models unleashed in traditional domains. © Signature Resources 2015 12
  13. 13. The Vital Few Building blocks of Governance Excellence  Talent: board with experience and competencies to oversee a complex organization. Does this leave out other community voices?  Strategic focus: envisioning, positioning and re- positioning the hospital to remain viable, valuable and vibrant. EVERYTHING FLOWS FROM STRATEGY!  Clarity on organizational performance and risk—the vital few performance and risk domains a board should track.  Clarity on governance process: effective then efficient. © Signature Resources 2015 13
  14. 14. Governance Excellence Vital Few Building blocks Let’s stop on this for a moment…Anything missing?  Talent.  Strategic focus.  Clarity on organizational performance and risk.  Clarity on governance process. © Signature Resources 2015 14
  15. 15. 21st Century Governance  Boards as Committees (‘50s-’60s) CEO Driven  Boards as Managers (’60s-’70s) Operational / Fiduciary  Boards as Trustees (‘80s-90’s) Policy and Strategy (John Carver) 21st Century Boards Transformational Leaders“Board of Directors must be a strategic asset.” © Signature Resources 2015 15
  16. 16. Where is Your Board?  Dysfunctional: characterized by a lack of trust, information hording and resistance between CEO and board.  Imperial: long board and CEO tenure gives way to CEO guiding the agenda, board appointments and what the board gets as information, quite traditional meetings.  Entrenched: minimal strategic dialogue with executive team, solid board policies and satisfactory performance yet can’t seem to break into high performance gear.  Strategic: high commitment to learning about / following best governance practices, heavily invested in strategic and system thinking, independent board appointment processes assure competent members, strong committee processes, regular self assessments. © Signature Resources 2015 16
  17. 17. Today’s Governance From the Literature Canadian Corporate Governance Best Practices Report, Hay Group 2014, Public Company Governance Survey, Nat. Association of Corp. Directors (2014) “What Directors Think” (2014), Spencer Stuart © Signature Resources 2015 priorities for Boards from national surveys: ① Strategic planning and oversight investment. ② Board composition. ③ Board refresh / governance succession. ④Risk oversight (beyond financial and clinical). ⑤Board assessments are considered very effective by 85% of the survey population of NACD. 17
  18. 18. Today’s Governance From the Literature “2014 Corporate Governance Best Practices Report” Hay Group & Canadian Society of Corporate Secretaries © Signature Resources 2015 priorities for Boards from Canadian survey: ① Board diversity. ② Focus on risk management. ③ Increased regulation and reporting. ④Board and executive compensation. ⑤Director training and education. 18
  19. 19. Governance Revolution From the Literature © Signature Resources 2015  Term limits combined with governance leadership succession initiative keeps board refreshed.  70% of meeting time = “strategically focused agenda.”  Competency based director nominations vs. volunteer or local politician based.  Enterprise-wide ERM oversight through a board committee .  Governance Self-assessments become annual routines.  Competency development of directors gets serious focus. 19
  20. 20. Typical Hospital Board Governance Development Agenda Board makeup and governance succession planning. Strategic Thinking investment. Enterprise Risk Management (ERM). Self assessments. Comprehensive “dashboards” beyond $ and quality: e.g. organizational culture, community brand. And Governance improvement makes it into the strategic plan. © Signature Resources 2015 20
  21. 21. Perspectives on A High Performance Governance Discipline © Signature Resources 2015 21
  22. 22. Talent: Governance Leadership Succession & Board Composition © Signature Resources 2015 Leadership Succession: The responsibility an organization has for assuring the quality and availability of future leaders. Governance, Executive, Senior Management, Front line. 22
  23. 23. Future Governing Boards © Signature Resources 2015 “In the not to distant future, new board members, at all levels of enterprise--from community organization to corporations--will be required to ‘certify governance competency’ to quality for an appointment / election.” Les Wallace  23
  24. 24. How About Governance Self-Certification?  Read these 3-5 governance books.  Review these OHA-Governance Center of Excellence articles.  Review this ministry overview.  Hospital Annual Report.  Hospital Board Dashboards. © Signature Resources 2015 24
  25. 25. Governance Leadership Succession: Board Renewal © Signature Resources 2015 ① Identify your desired profile ② Identify your candidates ③ Cultivate the pool ④ Recruit the right members ⑤ Orient for active participation ⑥ Involve and engage ⑦ Educate continually ⑧ Evaluate your performance ⑨ Rotate to stay fresh 25 Create a desired Board Makeup Dashboard!
  26. 26. Who Guides This Process?  Board Governance or Nominating committee facilitates profile activity, identification of potential candidates and screening / development.  Frequently one board member and CEO conduct first round screening interview.  Committee hones prospect list to serious contenders (based on competence and interest).  Board Chair and Committee chair pursue final round of screening for match.  Gov. / Nominating Committee identifies finalists and presents to full board for discussion / consideration.  Finalists have face-to-face interactions / interview with full board. © Signature Resources 2015 26
  27. 27. Governance Competency Governance is less about the technical literacy of a board member regarding a specific challenge facing the organization (e.g., HR, marketing, finance/budget, clinical, legal, IT, etc.)… …It’s more about the set of leadership competencies that give a board member a sophisticated peripheral vision to oversee a complex business enterprise. © Signature Resources 2015 27
  28. 28. Director Competency Examples  Organizational Finance/Budget  Business Enterprise  Strategic Planning  Operational Planning  Quality Improvement  Marketing  Branding  Strategic human resources  Policy Development  Community Relations  Leadership Development  Enterprise Risk Management  Government Relations  Mergers/Acquisitions  Technology Solutions  Innovation  Customer Service  Governance  Health care policy  Regulatory/Compliance © Signature Resources 2015 28
  29. 29. OHA Competency Matrix https://www.oha.com/ABOUTUS/CASEFORCHANGE/Pages/BoardofDirectors’Compet encyMatrix.aspx © Signature Resources 2015 29  Advocacy  Financial literacy & Expertise  Governance  Quality and Safety  Strategic Planning  Government Relations / Public Policy  Health Care Funding / Administration  Enterprise Risk Management  Human Resources Strategy
  30. 30. Teasing out Competency © Signature Resources 2015 30  Create a “director/trustee” application.  Invite potential candidates to speak to their experience demonstrating the competencies you are looking for in a board member (e.g. strategic thinking, complex problem solving, customer focus, quality improvement, etc.)  Define “conflict of interest” and have them attest to none!  Indicate a thorough background / bondability check will be conducted on all candidates.
  31. 31. Where / How do you find folks who might fit the ideal profile?  Colleges / Universities  The Canadian Chamber of Commerce  Specialty Chamber Groups: Black / Latino / Asian / Native American Chambers of Commerce  Business and Professional Women’s Associations of Ontario  Young Professional Groups  Professional Associations  Small Business Alliance Groups  Specialty Legal Societies  Ontario Non-Profit Societies  CEOs of businesses in your area © Signature Resources 2015 31
  32. 32. Credentialing Competency  Competencies are specific and observable learning outcomes where the learner has demonstrated knowledge, skills and applications to their domain.  Micro-credentialing—sorting competencies into smaller learning segments to aid learning.  E.G. “Facilitation” skills may be a smaller domain. Dealing with disruptive people, staying on agenda, managing conflict, involving everybody, clarifying contributions, etc. are smaller subsets of facilitation.  MOOCs—Massive Online Open Courses.  Badges—electronic certificates of learning completion or competency demonstration. © Signature Resources 2015 32
  33. 33. Credentialing Competency  “Badges” have become the new currency for professional credentials.  Mozilla, Blackboard, Safe Road Solutions, and others are way ahead in providing and tracking badges. http://www.evolllution.com/opinions/ways-digital-badges- influence-learning/ https://www.coursesites.com/webapps/Bb-sites-course- creation- BBLEARN/courseHomepage.htmlx?course_id=_264998_ 1 © Signature Resources 2015 33
  34. 34. New Board Orientation I Offsite materials review  History of the organization  Mission, vision, values statements  Summary of programs, products, services  Newsletters, press clippings  Financial performance past three years including external audit and regulatory review findings  Annual Report  HR org. chart & bio-sketch professional backgrounds of staff  Strategic Plan  Board by-laws  One year of board minutes  Board policy and procedures  Current board profile and professional background bio- sketches  Board commitment and conflict of interest statements for signing  Recent governance self- assessment results  Committee structure and charters  Board calendar © Signature Resources 2015 34
  35. 35. New Board Orientation II Onsite introductions and briefings  Staff leadership welcome meeting and introductions  Key programmatic one on one meetings  Financial briefing from CFO and review of board financial dashboard  Human resources briefing including review of board “organizational climate” dashboard  “Brand” briefing  Quality and Safety briefing: tracking data, improvement initiatives, responsibilities.  Patient / community briefing including last twelve months satisfaction and value survey results  Board Chair briefing: Board composition philosophy and leadership succession  Board committee assignment © Signature Resources 2015 35
  36. 36. New Board Orientation III Governance Education  Digest assigned articles and booklets.  Phone consultation with Governance committee chair upon completion of reading and orientation.  Discuss annual calendar of hospital conferences and expectations for attendance and learning commitments. © Signature Resources 2015 36 75% of Boards in Canada have a formal orientation program for new board members. Customarily a full day + site visits and training.
  37. 37. Les’ Thoughts on Ideal Board Makeup © Signature Resources 2015 37  1/3 established, leaders recognized as as strategically competent with complex enterprise.  1/3 mid-career leaders gaining leadership identity through business, government, non-profit engagement, research, educational or institutional leadership.  1/3 emerging business leaders—generally a younger group than senior or established and recognized leaders.
  38. 38. Governance Diversity and Youth Movement © Signature Resources 2015 38 “Suddenly—Age is a Diversity Issue” www.cues.org/article/view/id/Good-governance-age-is-board-diversity-issue
  39. 39. Governance Youth Movement (As seen by some) © Signature Resources 2015 39
  40. 40. © Signature Resources 2015 40 Questions / Discussion
  41. 41. © Signature Resources 2015 Strategy in the 21st Century Nothing ages faster than the future! 41
  42. 42. High Performance Governance Strategic  Strategic plan in place looking 3-5 years out.  70% of board agenda devoted to strategic topics—future facing. (Meetings: 30% fiduciary; 70% strategic)  Annual refresh of strategic plan.  Inclusive input from constituent leaders on strategic plan:  Past board members  Focus groups of constituents by segment (e.g. generational, geographical, community leaders, opinion leaders, local business, etc.)  External subject matter experts  Committee members  Staff! Inclusive input does not mean they vote on strategy. © Signature Resources 2015 42
  43. 43. 70% Strategy Focus “Building a Forward Looking Board,” McKinsey Quarterly (Feb. 2014).  “Not enough time on strategy.”  “Board as strategic asset.”  “Too much time looking into the rear view mirror.”  “Lack a strategic orientation.” © Signature Resources 2015 43 “The pull of corporate gravity gets us into ruts and complacency.” Les McKown, Predictable Success
  44. 44. Boards as Transformational Leaders © Signature Resources 2015 Challenge assumptions & models Benchmark products / performance with peer group Empower voice of the Patient, Family, Community Commit to change Move with deliberate speed on the vital few 44
  45. 45. Transformational  Transform: to completely change something.  Transformational: a focused effort to make significant changes to strengthen the relevance and value of an organization. © Signature Resources 2015 45 “Evolution keeps you alive; Revolution keeps you relevant.” Gary Hamel, Leading the Revolution
  46. 46. © Signature Resources 2015 46 Strategy is about Transforming the Organization to Remain Viable, Valuable, and Vibrant! So your board needs to be…  Strategic thinkers.  Change compatible.  Focused on transformation of the enterprise.  Complex problem solvers…effectively navigating changing funding, regulatory and constituent demands.  Strategic thinking looking three to ten years out.
  47. 47.  Strategy progress updates.  Business environment discussions.  New models / benchmarking / innovative thinking.  Tracking patient & family value shifts in healthcare.  Exploring the “lifecycle” of services, models, and other elements of healthcare business.  Developing partnerships / affiliations.  Governance succession and development. © Signature Resources 2015 47
  48. 48. Strategic Thinking Strategic Planning: “What is our desired business position and how must we change to get there?” Strategic Thinking: “How might we re-design our business to leverage leading edge marketplace and business models?”  Identifying an alternative future position  Anticipating opportunity and threats  Setting change priorities  Designing change pathways  Evolving / adapting systems  Outlining formal plans  Three-five year cycle  Course corrections regularly  Challenging core business assumptions  Re-inventing the hospital model  Exploration of new paradigms  Sponsoring paradigm shifts/pilot tests  Bold innovative movement  Confirming stakeholder value shifts Projecting / anticipating lifecycles of products, services, organizational model © Signature Resources 2015 48
  49. 49. Scenarios and the VUCA Future  Enhancing Strategic Thinking Through Scenarios 1960s Herman Kahn (U.S. Air Force); 1970s Pierre Wack (Royal Dutch/ Shell)  Scenario Thinking The process of visualizing what future conditions, trends, or events are probable… …what their consequences or effects would be like… …and how to respond to or benefit. © Signature Resources 2015 49
  50. 50. Scenario Discussion and Nimbleness  A simple discussion of possible scenarios informs a board so that it can be more nimble as the future unfolds.  Because they have already considered numerous scenarios and possible options. See Linda Parker Gates: http://www.sei.cmu.edu/reports/10tr037.pdf © Signature Resources 2015 50
  51. 51. Strategy and the VUCA Future “A good [strategic] theory incorporates foresight about an industry’s future, insight into which internal capabilities can optimize that future, and cross- sight into which assets can be configured to create value.” “Strategy for Turbulent Times: What is the Theory of Your Firm,” Todd Zenger (HBR June 2013) © Signature Resources 2015 51
  52. 52. Scenario Discussion and Nimbleness Caution: A strategic planning session that only focuses on SWOT discussions and doesn’t spend some time on a variety of future scenarios for the hospital will result in a brittle outcome. FUTURE PROOFING YOUR BOARD “Business environment scans and lots of scenario discussion helps insure only ‘black swans’ are a future surprise to your board.” http://www.signatureresources.com /our-capabilities/future-proof-your-board-directors © Signature Resources 2015 52
  53. 53. Scenario Discussion and Paradigm Shifting Thomas Kuhn, “The Structure of Scientific Revolutions” © Signature Resources 2015 53  If money were no object?  If we were forced to merge to keep our hospital alive?  What’s currently impossible to do, but if we could, would put us in a more successful position?  If the patient could decide?  What strategies might a competitor use to put us out of business?
  54. 54. Open Innovation Scenario Discussions © Signature Resources 2015 54 Open Innovation: the creation of knowledge, products, and services by online communities is still in an early stage. How might hospitals use it to stretch their thinking? Think: “virtual focus groups” on topics of relevance for younger families, seniors, the patient experience, access to services, patient education, etc.
  55. 55. Typical Strategic Success Factors  Funding our future.  Safety and quality.  Person centered care.  Population health.  Physician partnership.  Healthcare partnerships.  Community support.  Governance.  Executive leadership.  Technology.  Culture / Associate engagement. © Signature Resources 2015 55
  56. 56. Some Typical Mistakes of Organizational Strategy: The Tatooed lady and the Alligator Man! © Signature Resources 2015 56 “Complexity is the enemy of execution.”
  57. 57. © Signature Resources 2015 57
  58. 58. More Discussion: Other Elements of High Performance Governance  Basic fiduciary competence.  Exceeding basic governance competence.  Transparence / inclusiveness.  CEO partnership. © Signature Resources 2015 58
  59. 59. Basic Fiduciary Competence and Organizational Performance Competent Governance  Financial stability with ample operating reserve.  Consistently meeting patient quality standards.  Constituent satisfaction and value confirmed regularly.  CEO board partnership with open communication, goal setting and regular feedback.  Robust partnership with medical staff.  Meetings / Boardroom dynamics efficient and focused.  By-laws, policies up-to-date.  Board competent and committed. © Signature Resources 2015 59
  60. 60. Applying Competency Theory © Signature Resources 2015 60
  61. 61. Exceeding Fiduciary Competence and Organizational Performance Exceeding Competent  Real time assessment* of effectiveness following each board meeting.  “Board Portal” assures adequate Board information and communication.  Annual self-assessments and development plans drive improvement.  All committees / task forces have written charters and clearly identified outcomes or deliverable expectations and do annual reports.  Officer development program assures competent officers get elected.  A dose of governance leadership development at every meeting (+/- 15 minutes) e.g. risk, regulation, financial, ethics, etc.). [Ave director education investment 22.1 hrs. each per NACD survey] © Signature Resources 2015 61
  62. 62. © Signature Resources Inc. 2015 62  Real Time discussion each meeting.  Annual survey assessment of one element of governance.  Full spectrum governance assessment survey.  Customized telephone survey.  Board member to Board member feedback.  Outside Expert Review. 6 Self Assessment Models http://www.slideshare.net/LesWallace/board-self-assessment-approaches
  63. 63. Where is Your Governance? Ishikawa View Board Competency & Recruitment Governance Practices: Meetings Committees Strategic Focus / Innovation Performance Tracking Exec Team / Board Partnership Assessment & Development
  64. 64. And then there’s committee work… © Signature Resources 2015 A dark alley down which good ideas are led to be strangled! 64
  65. 65. All Committees!  Charters: purpose, makeup, annual responsibilities.  Annual deliverables: in clear distinct language.  Calendars.  Completeness: Board Chair Vice-Chair as Coaches.  Updates: no action reports; action reports.  DO NOT go around the room for updates!  Use a “task force” for short term investigation, scoping of an issue, or fresh eyes on an issue. A Task Force is a short term assignment that expires.  Annual report addresses progress + next year. © Signature Resources 2015 65
  66. 66.  No speeches—get to the point.  Be prepared.  Focus on the problem not the person.  Pick your fights.  Apply appreciative inquiry to all positions.  Explore the minority opinion.  Say it in the room not the hall.  Support the decision—move on when the board moves on. Meeting Rules of Engagement © Signature Resources 2015 66
  67. 67. Agendas Converted to 21st Century Style  Convene  Consent agenda  Financials  Quality/Safety  Organizational culture and community perceptions quarterly  Strategy (tracking, update and generative dialogue 70% of most meetings) © Signature Resources 2015 67
  68. 68. CONSENT AGENDA http://www.boardstar.org/assets/documents/Consent%20Agen da.pdf  A consent agenda groups routine items and routine resolutions under one agenda umbrella that gets received and approved in one board action without discussion. No finance or quality reports here!!!!!!!  A Board member may pull any item for the agenda for discussion during the appropriate section of the agenda.  Committee, executive team reports with no recommended actions go here.  “Exception reporting” (performance not meeting expectations or unusual circumstances) go in the appropriate segment of the agenda.© Signature Resources 2015 68
  69. 69. Executive Summaries and “Flipped” Presentations © Signature Resources 2015 69 “Flip That Meeting…” www.signatureresources.com/about-us/nine-minute-mentor Not all presentations are created equal! Move more “presentations” to executive summaries And “flipped presentations.”
  70. 70. Meeting Management: Executive Summaries Essential components: ① Recommendation or Current Status: 1-2 sentences. ② The Context: 1-2 short paragraphs. ③ Briefly highlight supportive data and evidence. ④ Resource implications?  Exceptional executive summaries can be accomplished in one page. Some with more complex data may require 2.  Yes, it’s an art—but one which smart people can master and boards can feel comfortable with. © Signature Resources 2015 70
  71. 71. Board Officer Development  Boards assume a popular and competent voice on the board can become chair (or other offices) with full competency—not true.  The Chairperson role has become more complex, and time consuming--natural talent is not longer enough to chair a hospital board.  Boards are moving to early identification of board member interests in being an officer and outlining developmental learning to prepare them for the chore. © Signature Resources 2015 71
  72. 72. Board Officer Development  Future board officers may be required to “certify” competency to serve. “Think badges for specific competencies for a Chairperson.” © Signature Resources 2015 72 • Competencies of facilitation, negotiation, meeting and agenda management, partnership with the CEO, advocacy, decision making will be specifically targeted. • These topics make for good development topics for the entire board.
  73. 73. Fiduciary Focus on the KPIs “What gets measured gets delivered!”  Fiduciary performance: finances and ethics.  Quality and Safety.  Patient and Family Perceptions.  Community brand.  Organizational Culture.  Strategic movement.  Governance excellence. © Signature Resources 2015 73
  74. 74. Exceeding Competent Performance Oversight: Uses a Balanced Scorecard/Measures Dashboard  Monitoring a set of “indicators” across the “balance” of the organization’s work.  Distilling the “cattle call” of numbers and progress reports from management into a visual report card. “Balanced Scorecard: Measures that Drive Performance,” Kaplan/Norton HBR 2/1/2000. Research on Malcolm Baldridge Award Winners © Signature Resources 2015 74
  75. 75. Competent Performance Oversight: The Balanced Scorecard/Measures Dashboard Business Performance Constituent Performance Employee Engagement / Organizational Culture  Budget performance  Capital investments  Operating reserve  Services expansion performance  Individual services performance  Investments Robert Kaplan, Balanced Scorecard  Quality / Safety metrics  Pt. /Family value tracking  Patient satisfaction  Service specific metrics  Population health  Brand measures from community / region Harry Beckwith, Selling the Invisible  Employee climate survey  Employee retention  Employee development  Leadership development  Talent succession  Employee ideas adopted  Internal customer surveys (tech., HR, purchasing, facilities, etc.) Marcus Buckingham, First, Break all the Rules © Signature Resources 2015 75 Other categories are common: “Learning and Growth,” “Internal Processes,” “Corporate Social Responsibility.”
  76. 76. Board Tracking  5-7 KPI indices in each domain of performance.  Dashboards provide “quick glance” oversight.  “Exception reports” explain variation and improvement plans.  “Fire Drill” discussions of urgent variations.  Report outs by “ex-officio” directors (e.g. CMO, CNO) and key executives (CFO, QI Director, HR, Marketing/Branding). © Signature Resources 2015 76
  77. 77. Big Dot Oversight Theory © Signature Resources 2015 77  The board stays out of the weeds of process and moment to moment management of hospital systems.  At the staff and management levels the professionals get their hands dirty with more micro data and time tracking in support of quality and process improvement.  At the board level the high level “outcome” expectations for performance on the key performance indicators are tracked to assure fiduciary attention to performance and ministry performance expectations.
  78. 78. Tracking Scope Big Dot Cascading Focus Board Governance Executive Leadership Management Teams Work & Quality Improvement Teams © Signature Resources 2015 78 Oversight & Tracking “From Boardroom to Bedside: How to Define and Measure Hospital Quality”, Michael Heenan and Drothy Binkley
  79. 79. When Does the Board Hear About Little Dots Board Governance High Risk Exception Reporting Work & Quality Improvement Teams © Signature Resources 2015 79
  80. 80. High Performance Governance Community Conversations  4 times a year checks on “patient”and “family” value and satisfaction (two different issues). Satisfaction =  Value = meets my needs.  Annual check on community impressions and interests.  Focus groups around key services or Brand impressions.  On-line surveys around key hospital initiatives: redesign, discharge planning, ER, birthing, home health.  Board voice represents a diverse broad spectrum of community.  Strategic agenda helps brand the organization as keeping up.  Robust & open communication strategy links community to Board: Newsletter, Tweets, Facebook, dynamic website, communities blogs—keep community informed in real time—a local branding strategy! © Signature Resources 2015 80
  81. 81. The “3A” Community Value Proposition “I get what I need.” “What could we do to add even greater value to you our member…? Access to: sites, services, partners, etc. Appropriate: do services fit community needs (Population Health Management). What’s missing? Acceptable: community well informed, hospital delivers in a way that meets community needs, options provided, services meet industry standards. © Signature Resources 2015 81
  82. 82. Patient Satisfaction CPR™ “I’m happy” “How well did we deliver on the following… Courteous Service: courteous and timely service and treatment through each contact point and across the treatment continuum and all engagements with the system. Providing Information: timely, available, accurate, transparent, keeps me well informed as a patient? Responding to individual circumstances: dealing with problems and goofs, helping me in an emergency, referring me to helpful solutions/assistance, protecting my interests— warning me of risks. © Signature Resources 2015 82
  83. 83. Population Health  Five per cent of patients account for two-thirds of health care costs. …patients with multiple, complex conditions. When the hospital, the family doctor, the long-term care home, community organizations and others work as a team, the patient receives better, more coordinated care. Providers will design a care plan for each patient and work together with patients and their families. For the patient it means they will :  Have an individualized, coordinated plan  Have care providers who ensure the plan is being followed  Have support to ensure they are taking the right medications  Have a care provider they can call who knows them, is familiar with their situation and can help. © Signature Resources 2015 83
  84. 84. Corporate Social Responsibility TBL: “the triple bottom line” perspective emerged in 1994 The argument was that companies should be preparing three different (and quite separate) bottom lines. 1.The traditional measure of corporate profit—the “bottom line” of profit and loss accounting. 2.The bottom line of a company's “people account”—a measure in some shape or form of how socially responsible an organization has been throughout its operations. 3.The bottom line of the company's “planet” account—a measure of how environmentally responsible it has been. John Elkington, Cannibals with Forks: The Triple Bottom Line of 21st Century Business (1998). © Signature Resources 2015 84
  85. 85. Community and Planet Brand Advantage  Hay Group/Corp. Sec. CA Society “Less than ½ Canadian Boards have a CSR initiative.  Community service, employee volunteer hours, financial contributions, executive service on community boards, etc.  Promoting communities, chambers of commerce, festival sponsorship, etc.  Community partnerships with schools, universities, not-for-profits, etc.  Facilities: recycling, energy use, green purchasing, eco-auto fleet, local sourcing, paperless systems, etc.  Is your Hospital / Health System tracking any of these?  OHA Green Hospital Scorecard? https://www.oha.com/CurrentIssues/keyinitiatives/Green%20Healthcare/Gree nHospitalScorecard/Pages/GreenHospitalScorecard.aspx “Social Responsibility: A New Paradigm of Hospital Governance” http://www.ncbi.nlm.nih.gov/pubmed/22481565 © Signature Resources 2015 85
  86. 86. High Performance Governance Transparent / Dialogic Tone  Unrushed board agendas assure generative dialogue occurs with 50%-70% of board agenda (Richard Chait, Governance as Leadership) . Characterized by candid discussions with appreciative respect for diverse points of view (“When we all think alike no one thinks at all”).  Board votes noted by name!  Transparent—no back room agendas, limited use of “executive / closed session.”  Transparent--robust information available to constituents through dynamic web site / publications (board credentials, Ethics and values statement, corporate social responsibility statement, quality dashboards, Ministry reporting, etc.).  Committee / task force proceedings available to the board in real time. (Draft minutes available within 48 hours). © Signature Resources 2015 86
  87. 87. Transparency In Real Time  Todays communities are increasingly nosey.  “Real time” information flow from informal (e.g. Facebook, Twitter) to formal (more robust web sites with big data) will answer the call for openness.  Quarterly corporate reports become available to the community (much like stock exchange requirements).  Long term plans will be more widely publicized and accomplishment celebrated. © Signature Resources 2015 87
  88. 88. Sophisticated KPI Dashboards  The need for better, quicker performance monitoring and the demand for greater transparency will push associations to improved dashboards.  Info-graphic technology will make this both easier and interesting.  Identifying the KPIs (Key Performance Indicators) will continue to be a significant board responsibility. © Signature Resources 2015 88
  89. 89. Info-Graphic Dashboards © Signature Resources 2015 89
  90. 90. High Performance Governance: Sampling the Literature Assessment 1. Is Our Board Composition Right for the Challenge? 2. Are We Addressing the Risks That Could Send Our Company Over the Cliff? 3. Are We Prepared to Do Our Job Well When a Crisis Erupts? 4. Are We Well Prepared to Name Our Next CEO? 5. Does Our Board Really Own the Company’s Strategy? 6. How Can We Get the Information We Need to Govern Well? 7. How Can Our Board Get CEO Compensation Right? © Signature Resources 2015 90
  91. 91. High Performance Governance Assessment 8. Why Do We Need a Lead Director Anyway? 9. Is Our Governance Committee Best of Breed? 10. How Do We Get the Most Value out of Our Time? 11. How Can Executive Sessions Help the Board Grow? 12. How Can Our Board Self-Evaluation Improve Our Functioning and Our Output? 13. How Do We Stop from Micromanaging? 14. How Prepared Are We to Work with Activist Shareholders and Their Proxies? © Signature Resources 2015 91
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  93. 93. CEO / Board Partnership © Signature Resources 2015 93
  94. 94. High Performance Governance Clarity in Direction to the CEO “The Board’s job: help the CEO be as successful as possible!”  Platinum quality alignment between Board and CEO on goals and performance.  Twice a year performance feedback to CEO (brief mid-year & full annual review)—competency based.  CEO/ key staff reports are “outcomes” & “exceptions” based vs “activity” based; strategic vs administrative detail. Effective use of “executive summaries” and “consent agenda.” © Signature Resources 2015 94
  95. 95. What Stresses Your CEO?  In addition to running a challenging business…  …A Board can be one of the biggest CEO’s stressors!  Lack of clarity to the CEO.  Board members not literate in governance.  Get in the “weeds” [details] of management.  Not up-to-date on hospital & healthcare issues.  Irregular feedback and evaluation to CEO.  Conservative to the point the hospital gets behind the innovation and patient value trend.  Board makeup doesn’t match future needs. © Signature Resources 2015 95
  96. 96. CEO Leadership and Board Partnership If the CEO’s not scaring the Board regularly, It’s not a robust partnership! © Signature Resources 2015 “But Les Wallace said to scare them!” 96
  97. 97. Partnership: What CEOs Usually Ask Me to Remind Boards!  A professional relationship: not bowling, golfing, or skiing buddies.  Feedback / direction / inquiry should be conducted in an executive manner not @ the bar, airplane, or banquet dinner.  Rules of engagement should exist:  Commit to face-to-face meetings outside of Board meetings.  Have an advanced agenda for the conversation.  Effective communication is specific not general: have examples & data.  Good feedback is timely!  Instruct the CEO—”Scare us with big ideas!” Crucial Conversations (Patterson) © Signature Resources 2015 97
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  99. 99. © Signature Resources 2015 99
  100. 100. Les Wallace, Ph.D. President, Signature Resources Inc. Les@signatureresources.com  Dr. Wallace is recognized for tracking business environment and workplace trends and their impact upon business and government. His publications have appeared in Leadership Excellence, Personnel Journal, Credit Union Management, Public Management, and Nation's Business as well as numerous research and conference proceedings. His latest book, co-authored with Dr. Jim Trinka, A Legacy of 21st Century Leadership, outlines the leadership organizations need in a global, fast moving business environment. His book, Principles of 21st Century Governance (2013) is being used by many boards in the profit and not-for-profit sectors to design governance development approaches.  His new book, Personal Success in a Team Environment (2014) is used by individuals and organizations to improve teamwork, career building and success at work.  Les is a frequent consultant and speaker on issues of organizational transformation and leadership, employee engagement, strategic thinking and board of directors development and governance. His clients include Fortune 100 businesses, Government agencies, and not-for-profit organizations world-wide. Dr. Wallace is also the host resource on the 9Minute Mentor, a series short video tutorials governance.  Les has served on the Board of Security First Bank and Counterpart international. He currently serves on the international Board of the World Future Society. He is a member of the National Association of Corporate Directors. Les writes an on-line column for CUES Center for Credit Union Board Education.  Preview his video series on governance: www.signatureresources “Dr. Wallace on Camera.”  https://twitter.com/9MinuteMentor © Signature Resources 2015 100

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