Category Archives: Consulting

Examples of what not to do – simple mistakes you have seen that others could avoid.  AKA – How many ways can you get yourself into trouble?

One of the items of constructive feedback I have received is that some of my articles are too long.  The subject of this article resulted in an article over 2,000 words long.  I have reminisced with friends in the consulting business that have suggested that we collaborate on a book on this topic based on the experiences we have had.  As a result, this article will be posted in multiple editions.

A very highly regarded friend of mine recommended that I address mistakes that might be beneficial to others.  Nasreddin said something to the effect that, ‘good judgment comes from the experience we get from exercising bad judgment.’  Given the benefit of this insight, I will address some of the things that I have seen as the cause of extreme angst in one healthcare organization after another.  An exhaustive listing is beyond the scope of any article.  However, I welcome tips and stories from my readers addressing vivid memories of things that would be beneficial for others to know, especially those that do not have the experience of some of us.

Blind trust of systems

This is one of the most basic managerial errors and it is seen over and over.  People ‘assume’ that a system will or will not do something without proving the assumption only to be surprised when their blind faith is proven wrong in a spectacular faux-pas.  Rather than assuming that people understand the meaning of the word ‘assume’, I will define it by dissection.  All to often, people engage in assumptions leading to flawed decisions that make an ASS/out of U/and ME.  I wish I could remember how many times I have witnessed flawed assumptions wreaking havoc around me.  Sometimes, these errors result in terminations of the people involved.  Mark Twain and Ronald Regan said that, “It is not what you know that will get you, it is what you are absolutely certain of that is just not right.”

Once upon a time when I had reason to doubt the controls in the hospital’s accounts payable system right after a new state of the art, super whiz-bang application had been implemented, I was assured by my Controller that there were safeguards in the system that he said would guarantee that there was no scenario under which an automated check for more than $25,000 could be produced and signed with my facsimile.  I had set this limit to insure that I had the chance to personally review large disbursements and sign them manually.  About a week later, it came to my attention that instead of keying a construction draw request of less than $25K, the A/P clerk keyed the remaining balance of over $275K to a contractor that the hospital was engaged in an active dispute with.  What do you think happened when this transaction went through the system without interruption and out to the contractor?  If you ass/u/me that he brought the check back, you would be sorely mistaken.  I am sure others can provide similar nightmare stories.

There are thousands of ways to be trapped by our own systems. The more complex the systems, the greater the number of interfaces with other systems and the higher the volume of transactions, the greater the potential for error and the larger the error will have to become before it is discovered by normal control and balancing processes.

Hiring mistakes

Another HUGE area of learning in the school of hard knocks is hiring decisions.  Jack Welsh said something to the effect of, “Getting the right people into the right jobs is a lot more important than developing a strategy.”  As an interim executive I have observed that one of the more common areas that gets organizations into trouble is hiring decisions that result in people being put into roles where they cannot succeed.  Some organizations and hiring decision makers are highly motivated to put the next person in line into a role whether they are qualified or not.  I have been criticized for bringing people from outside of town into the organization to fill crucial roles.  My response is that if  properly qualified local applicants were available, I would hire locally to save travel money if for no other reason.  I have counseled Boards and written on the subject of organizational performance being nothing more complicated than the collective caliber of the team on the field.  One of my mentors taught me by example the potential and value of getting the right people into the right places in an organization and the difference they can make.

Getting the right people is as important if not more important than avoiding hiring the wrong people by making mistakes in the vetting process.

AR valuation

I have seen so many executives brought down by incorrect valuations of their accounts receivable that I have lost count.  So many in fact, that I was inspired to address one of my blog articles to CEOs that all too often become one of the first victims of this error.  The article asks the question, ‘have you been caught looking?’  One of the biggest risks on a hospital’s financial statements is the valuation of revenue and accounts receivable and for every understatement, there are multiples of over-statements of receivable and revenue value.  In fact, I have not seen an undervaluation recorded although I have been in arguments with outside auditors about under and over valuations of revenue and A/R.  It is a lot easier to convince an audit partner to not book an undervaluation than it is an over valuation.   The executive that wishes to avoid becoming a victim of this trap needs to take the advice of my article on the topic to heart.

AR reclassifications

A reclassification of AR is potentially more dangerous and harder to catch than a simple error in calculating realizable value.  For example, consider an organization that holds self pay balances after insurance in the same bucket as the insurance.  This is considerably more common than many managers appreciate.  Suppose a commercial receivable is valued at 70% of the underlying charges and self pay receivables are valued at 5%.  When an amount like $5 million is reclassified from insurance to self pay to clean up a backlog after the insurance balances have been satisfied, the adjustment to the value of receivables will be 65% (70% – 5%) or $3.25 million.  There are other reasons for balances to accumulate in the wrong buckets on the receivable system leading to reclassification adjustments.  The receivables are not wrong, they are just valued incorrectly.  This kind of error is enough to knock an enormous dent into or potentially wipe out the operating income of any enterprise.  There are rarely adequate cushions or reserves in realizable value calculations to absorb a shock like this.

Summary

As can be seen, a text-book could easily be written on the topic of what not to do.  There are plenty of texts that are written on what to do, they are just all too regularly ignored.  Some leaders seem to not have the ability to connect academic learning and practice. These are but a few examples of things that I have seen go wrong in healthcare organization’s business operations.  This discussion is a good example of the value of experience.  Experienced executives operating on evidence based practice have a far better potential to avoid these pitfalls and others.  Sometimes the value of an executive in an organization is more related to what they know than what they do.  Once a patient in an outage accosted a surgeon  over his fee.  The patient took the position that the fee bore no relationship to the time spent on the procedure.  The surgeon replied that 5% of his fee was for the cutting and the other 95% was for knowing where to cut and what not to cut.

My plan is to publish another article on this topic with more examples of what not to do. If you have any stories to contribute, I would love to hear them.

I would like to thank Dr. Christy Lemak, Dean of the Health Administration program at the University of Alabama at Birmingham for inspiring this article.  I am looking forward to seeing my grade.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.

The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link that usually appears as a bubble near the bottom this web page.

There is a comment section at the bottom of each blog page.  Please provide input and feedback that will help me to improve the quality of this work.

This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

What is the value proposition of an Interim Executive?

Interim Executive Services as defined in my ‘About‘ page is not as common in the US as it is in Europe.  On the continent, in order to practice as an interim executive, a person needs to have a certification similar to a CPA in the US.  In the US, it is still the wild west when it comes to interim executives.  A few years back, a private enterprise in NC attempted to establish a credential for interim executives but the effort failed so now it is a buyer beware market.  There are firms providing interim services but in my experience these firms do very little in terms of either training or providing oversight for their interims.  The interims are placed and they are usually on their own from that point.  This raises the question of the value proposition of an interim executive because the proposed pricing is usually higher than the hourly rate for the employee being replaced.

In my experience dealing with buyers of interim services, the first and often most heavily weighed consideration is the cost of the interim resource.  The less sophisticated the decision maker, the more likely that they will be motivated primarily if not exclusively by cost.  This is because they do not get or choose to ignore the value proposition.  This has happened to me time after time.  Each time, I held my ground and demanded a fair premium for my services.  In each case, I told my client that if they did not find value in my services, they could terminate me without cause or notice.  Once they had a chance to experience what a sophisticated interim executive could provide, the cost issue was not raised again.  A decision maker that seizes an opportunity to buy interim services at a small or no premium should be worried about what they will be getting for their money.

I am aware of interim firms that prey on executives in transition that are desperate for income.  Some of these interims will take any job at any price.  The interim firm then sells their services based on price alone and is successful getting a markup of 30% to 50% while providing a price sensitive decision maker just what they paid for.

What would rationalize a premium for a sophisticated interim executive?  There are many considerations that a decision maker should contemplate in addition or in lieu of rate.  I am making repetitive use of the adjective ‘sophisticated’ when referring to interim executives.  There are differences in the sophistication of interim executives and the decision makers that engage them.  These differences are discussed in an earlier article.

The criteria below while useful in understanding the value proposition of a sophisticated interim executive may be equally if not more valuable in evaluating potential interim resources for fit in your organization.

I would advise against hiring the first interim you see unless you have a recommendation from a source that you highly trust.  When I worked with Tatum, they made it a habit to present at least two resources on each project so that the decision maker would have the ability to see more than one alternative and make their own choice instead of letting the interim firm sell them on whoever happened to be currently sitting on their bench with nothing better to be doing at the time.

Experience – One thing worth paying a premium for is experience.  The typical interim executive is a late career individual with a lot of experience, usually in a number of organizations.  The depth and breadth of this experience allows them to assimilate quickly an organization and to begin creating value almost immediately.  This is particularly true if the interim has on-point experience, something you should always look for.

In addition to career experience, it is worth paying a premium for an interim executive with multiple interim engagements on their CV.  The approach to a position as an interim is radically different from what one would take as an employee.  It is worth paying a premium for an experienced interim unless you already have another interim in the organization that can serve as a mentor.

Credentials – In addition to being highly experienced, sophisticated interims tend to carry above average credentials.  Things like advanced degrees, CPA certifications, ACHE, HFMA  and/or fellowships.  These credentials may or may not specifically make one person better than another but the probability that a credentialed executive is going to have a higher level of cognitive capability and an innate drive toward personal excellence is a pretty safe bet.  Another consideration is that no one requires executives to seek advanced education and professional credentialing.  In a situation where everything else is equal, I will always favor a credentialed individual because the very fact that they have obtained a credential is proof of their drive to go beyond the minimum required to get by.  In my experience, credentialed executives are always superior for this reason alone.  As most of us that are credentialed know, you do actually learn something in the credentialing process that might come in handy once in a while.

Expertise – Knowing what you are doing should count for something.  I have seen more than one decision maker hire the first resource they could find that had a heart beat only to make the situation infinitely worse when the interim executive failed.  Most decision makers I have met do not know how to supervise or manage an interim executive.  For example, I would argue that most CEOs do not have the ability to manage a CFO from a technical or risk management standpoint.  I discuss this phenomenon in an earlier article.  The risk for the decision maker is that if the interim fails, the decision maker will usually be held accountable.  The interim will go on to the next gig while the decision maker that may not have been considering relocating finds himself hanging paper from home.

MentorshipSophisticated interims are invaluable in the potential they present to mentor rising executives in an organization.  A sophisticated interim executive that knows how to mentor properly can help turn younger leaders into rising stars.  In addition, interim engagements  frequently lead to demand for additional interim resources that were not anticipated at the beginning of an engagement.  In this situation, an interim that has the capability to manage and/or mentor other interims can bring a very high value to an organization.  I have engaged a number of interims while serving as an interim myself.  I can say from experience that I believe I have delivered substantial value by making sure that the other interims were doing what they are supposed to be doing.

Judgment – You have probably heard the one liner that says, “Good judgment comes from experience that we get by exercising bad judgment.”  I would argue that having the ability to bring above average experience and judgment to bear on a problem is worth paying for.  Experienced executives, especially interim executives can be expected to have better judgment than a decision maker might be accustomed to.

Stability – A transition situation is unstable by definition.  My practice has shown me that the only thing you can be certain of in a transitory situation is that you cannot be certain of anything.  Some people have difficulty dealing with unstable, unpredictable situations.  After or arguably before a decision maker initiates a transition, they should be thinking ahead about their next steps and high among them should be an effort to stabilize the situation so that a business interruption or a bad outcome may be avoided.

Morphing deals – Some people need predictability and stability in order to function effectively.  They are unnerved by constantly changing circumstances and seize up.  An experienced interim executive knows that as a project progresses, things will happen and changes will become necessary that were not initially expected.  The project morphs from one set of circumstances to another.  It is worth paying for experience that can not only help stabilize a situation but experience that can adapt to unforeseen challenges.

Easy to sever – I have seen interim engagements fail.  There is no way that I know of  to accurately predict in advance if the interim executive will be what was expected or whether or not they will be effective in your organization.  In the event that the engagement is not working, you should have the ability to have the interim replaced immediately without cause or reason.  I discuss this in my article about contracting.  If the interim deal is not working, it is highly unlikely that it will improve.  I have had to terminate an interim before the end of their second week in an organization.  In the event that something like this occurs, the sooner you act, the less the potential for damage.  The other side of this is that the issue may not be anything worse than a bad fit.  I am happy to be the easiest person in the organization to get rid of but if I am expected to bear this risk, part the premium I receive justifies me taking this risk.

Interim services firms will endeavor to mitigate this risk by asking for minimum engagement time periods.  My advice would be to pay the premium and refuse to accept a minimum term as explained in my contracting article.

Velocity – In my article about contracting, I talk about the importance of velocity as it relates to interim engagements.  Frequently, decision makers procrastinate about making a decision but once they make up their minds, they want the resource TOMORROW.  Providing this kind of flexibility is worth paying a premium for especially if the resource you want has been waiting for you to make a decision.  If you want a resource to sit around waiting for you make a decision and be at you beck and call at any time, you need to be prepared to pay a premium for this luxury.

Rapid acclimation – When I was at Tatum, the firm’s mantra was ‘Velocity.’  The connotation is that the firm focused on rapid response.  What I have learned from the stages of an interim engagement is that once a decision maker decides to bring an interim executive in, they want them tomorrow.  Part of the premium a decision maker pays is to get  an interim executive  to get to their site quickly,   Sophisticated interim executives also know how to assess a situation quickly.  This skill and experience allows them to become productive much faster than would be expected of an employee.  Decision makers tend to vacillate and procrastinate about a decision to bring in interim resources.  They should not be unhappy about paying a premium for a resource that can help them compensate for the time it took to get the interim on their site.

No benefits – An interim deal is simple from the perspective that it usually only involves the professional fee and out of pocket expenses.  Unsophisticated decision makers will compare the salary rate of the departed employee with the billing rate of the interim and conclude that the interim is expensive without taking into consideration that the employee had benefit cost somewhere in the range of 25% of their compensation.  Not having an interim executive on the organization’s benefit plan is clean and can be a cost saving aspect of the engagement.

Living and travel burden – If you don’t think an interim executive deserves a premium, try living in a hotel and traveling every week.  Not only does this create an expense that substantially adds to the cost of an interim engagement, it is very hard on the interim executive.  The longer the engagement lasts, the harder this becomes on the interim.  It is too easy for decision makers to forget the interim executive as they are going home a warm meal and the privilege of going to bed with their spouse while the interim is separated from their family, eating out and going to sleep in a cold bed.  This aspect of interim executive consulting by itself warrants a premium.  I accept that the burden of travel goes with Interim work but I wonder if the price my family and marriage have paid for me to do this work has been worth any amount of money.  I have lost my sensitively about what I ask for my services primarily be causes of the burden that the interim lifestyle places on the consultant.  I discuss this in detail in my article about becoming a an interim executive.

While I could take the position that it is not a problem of mine, I deeply resent the cost associated with being an interim executive.  Travel, food, temporary lodging and other costs associated with an interim executive is a significant proportion of the total cost of an interim resource.  It drives me crazy to pay these costs or incur them on behalf of a client.  This is one of the strongest reasons for making sure that you are getting your money’s worth from any interim you engage.

Hired independently or via a firm – My experience is showing me that there is a growing population of ‘free agent’ interim executives.  Firms that place interims will take somewhere in the range of 30% – 50% of the total professional fee for their overhead and profit.  In addition, because of what I would describe as oppressive government overreach, most if not all firms now require their interims to work on a W-2 instead of a 1099 or K-1.  This can result in the interim losing tax benefit in the best case and paying tax on out-of-pocket expenses in the worst case.  While free agent interims can be harder to find because you have to know how to network to find them, they can be less expensive because they are not taking a hair cut in a direct deal.  In my experience, a free-lance interim is likely to be much better than interims that come from firms for a variety of reasons that are beyond the scope of this article.

Summary – I could go on but I trust that as a decision maker or an interim for that matter, you can see that there is plenty of justification for a premium for interim executive services.  The premiums I have seen run 50% or more over the base salary of the executive being replaced.  If you are a decision maker, you should not be afraid of paying a premium to get superior skills and resources brought to bear quickly on complex or dangerous business problems and or transitions.  Quibbling over rate can slow down the process of getting the right resource and can prevent you from getting the best possible skill in place.  One of the most profound value propositions of an interim executive is their ability to raise the probability that the decision maker that hired them will not also become a victim of the transitions that created the need for the interim in the first place.  In my experience, decision makers routinely discount this aspect of an interim engagement’s value that is in  my opinion one of the strongest reasons for paying a premium for the right interim.

If you are an interim executive, you should not ever sell yourself short.  I took a haircut on a deal that was only supposed to last 3 months to mitigate on behalf of the firm something that I had nothing to do with.  After three months, the firm would not get my rate corrected and the engagement ended up lasting thirteen months.  I will not work with that firm again because they have demonstrated in more than one case involving me that they cannot be trusted.  As an aside, from my perspective in this case, the firm detracted significantly from its value to me while adding insignificantly to the client’s value.  If you have experience as an interim, you know that one certainty is that you are probably going into a situation that will turn out to be significantly different from what was described and invariably more challenging.  You also know that there is a very high probability that you are going to be in the organization much longer than the decision maker assumes at the onset.  In my  experience once you have proven your value, decision makers will take considerably more time getting you out than they took getting you in.  I have helped decision makers over the cost hump by reminding them that hiring me is a no risk proposition.  They can send me packing the day that they decide that the engagement is not working or that I am failing to produce more value than they expected.  I am happy to take this risk as long as I am being appropriately compensated.  I have yet to be sent packing.  In every case, I have remained much longer than initially expected or planned.  Some interim firms prey on unsophisticated executives in transition by buying them at or below what they were receiving as an employee and reselling them at a market consulting rate.  If you allow yourself to be prostituted in this manner it is your own fault.

In closing, I believe there is substantial justification for paying a premium for interim executive services.  I postulate that the time usually lost by decision makers that struggle with the decision to bring an interim in can quickly create costs and/or losses that far exceed any premium.  As I said in an earlier article, if you are a decision maker, make a decision.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.

The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link that usually appears as a bubble near the bottom this web page.

This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

 

 

So you want to become an interim executive?

I get requests about Interim Executive Services from people that are starting to look at interim consulting as a means to make a living and/or make a difference.

My first response to this question from someone is why?

What is their perception of interim executive services?  What about it do they find attractive?  What is their level of understanding of what is involved?

Collectively, these questions address the level of sophistication of an interim executive as described by Goss and Bridson.

Unless the person is legitimately interested in becoming a sophisticated interim executive, I am done talking with them.

The reason is that an unsophisticated interim has the potential to cause more problems than they solve and they will be conflicted in the organization(s) they serve.  I believe an organization that is interested in securing interim assistance deserves a sophisticated interim even if they do not know any better themselves.  If the interim is not serious about their role as an interim and what they are really looking for is a job or to disrupt a search, I have no further interest in wasting time on them.

So what is being an interim about anyway?  First the bad part.

You will be working long (12 + hour days) while living in a hotel in a strange town.  It can get very lonely. You will be working in a stressed or  distressed organization that is unstable because of prior and coming managerial transitions.  A lot of people in the organization will resent your presence.  This resentment has several sources.  Frequently, there is remorse for the departed executive.  It is common for people to feel like their previous leader did not deserve to be terminated or that they got a bad deal.  These concerns are generally valid.  I rarely follow ‘bad’ executives.  I follow people that are no longer in the organization due to politics, the performance of their area of responsibility or the fact that they became collateral damage to other potentially unrelated turnover.  Sometimes people I follow have left the organization because the executive lost credibility.  In other cases, it was determined that either the organization or their area of responsibility is not meeting its mission and that things were unlikely to improve.  I discuss this phenomena in an earlier blog.  Sometimes a need is created when a successful executive takes advantage of a career opportunity and decides on their own to move on.  Another reason for resentment is that in addition to employees seeing you ‘taking’ their prior leader’s job, they sometimes see you getting paid what they believe to be premium pay for providing your services.

In addition to the resentment, there is a trust issue.  People are naturally cautious about trusting someone they do not know.  In  a transition, there is plenty of paranoia about what you have been told, your goals and how people around you might be affected by your role in the organization.  They know you are very closely connected to the Board and/or the front office and they fear your knowledge about the future direction of the role you are filling or the organization.

The lifestyle that goes along with interim executive services can be brutal.  Your life devolves into a two dimensional existence that consists only of work and sleep.  You lose touch with friends and activities back home until eventually they are no longer a part of your life.  Having a ‘routine’ disappears as you lose the ability to maintain exercise, a social life and healthy eating activities. After a usual schedule of four ten to twelve hour days, you get to go through the only remaining legal form of torture; air travel – twice per week.  The expense, the hassle, the strip searches, the time and frustration of travel further eats into your time until you have little if any personal time left.  Hobbies and extracurricular activities become memories.  Living in a hotel and eating out every day becomes an old drag quickly.  Anyone that has done this knows how fast the ‘glamor’ of being a consultant wears off.  It even takes a lot of time to begin to figure your way around  the town.

You are in the organization but you are not really part of it.  You do not share any of the culture and history and there is usually no expectation that you will be around long enough to develop meaningful relationships.  Remember the ‘Replacements’ segment from the TV series, ‘A Band of Brothers?’  If not, you should look it up.  You are rarely included in social activities in or out of the organization. As a result, you feel isolated and alone.  Initially, no one expects you to be around very long so they make no effort to get to know you.  The distance that others in the organization establish, particularly other executives is palpable.

Under good conditions, you are drinking daily from a firehose, particularly in the earlier stages of an engagement.  You do not know anyone, you do not know where anything is, you do not know who controls what and as you proceed through your engagement, it is common to identify issues that need attention at a rate that far exceeds your ability to address them.  People are cordial either because it is the right thing to do or they feel it helps their personal cause without going out of their way to be particularly helpful most of the time.

I could go on and on about this but hopefully you are beginning to get the point about the challenges of being relatively unwelcome in a strange organization in a strange town where the organization is being roiled by the effects of what is usually an unexpected turnover event or multiple turnover events.  I served an organization that had released nine senior executives at the same time including the CEO and most of his direct reports.  The managers left were shell shocked and some of them had survivor’s remorse.  They could not function because they could not understand why they were left and some of their best friends and associates were gone.  Most of these people eventually left the organization.

Given all of this, the obvious question is why on earth would anyone that had not lost their mind would want to have anything to do with this kind of work?

I believe there are two primary answers.  The first is that there will never be a better opportunity in that organization for an interim executive executive to have a transformational impact that can literally alter the course of the organization.  The second reason is that the work has the potential to be exhilarating from the intellectual challenges it presents while being more lucrative financially than traditional employment.

A turnover event starts when the organization or its Board concludes that the organization of a part of it is on the wrong track and the existing leader is not meeting the organization’s needs.  When the body of evidence that the situation is unlikely to improve reaches critical mass, the turnover and succession processes start.  An interim coming into a situation like this finds that unlike an employment situation where you have to fight politics, bureaucracy and undermining peers to get anything done, the organization is hungry for fresh ideas, new blood and the injection of energy into an area that was perceived to be falling behind.  It is common to enjoy considerably more latitude than your predecessor to make what would have previously been considered radical recommendations to get the organization moving in the right direction.  Leadership and governance are actually interested in what you have to say and are considerably more likely to act on reasoned recommendations.  Of course, the burden of responsibility that comes with being such an advisor is sobering because you are expected to ‘get it right’ 100% of the time.  This is not an easy burden to bear.

Another reason for performing interim executive services is what I call empowerment.  Employees at every level sub-optimize routinely because they engage in self preservation.  They guard their jobs and roles at any cost.  When you have nothing to lose by being fired and you have absolutely no fear of being fired, you enjoy a sense of liberation and empowerment that can only be appreciated by experiencing the phenomena.  Because you have no ‘job’ to protect, you can say and do things no employee would ever consider.  You can challenge the organization, its leadership and governance to do hard things if they are the right course of action for the organization even if making the recommendations puts your own role at risk.  The only objective I have as an interim executive is to get the best result possible for the organization regardless of how I am affected.  If I get run out of town for that, I will leave happy with knowledge that whether they agreed or not, they will at least be making informed decisions.  I recently told a community leader that my biggest concern if I got run out of town would be whether or not I could stay out of work long enough to have a decent vacation. There is no shortage of organizations needing competent, professional Interim Executive leadership services.  So far, I have not been run out of a town and I have said and done things in Board rooms that have resulted in shock, awe and horror.  I have pressed organizational leaders and Board members to do the hard work necessary to make their organization better.

The upside of this is that I have left every organization I have served a better place and I have continuing excellent relationships with Board members and CEOs of every organization I have served.  This is another of the many benefits of interim services; the residual impact of your transformational leadership in an organization will last for years after you are gone.  The courage and determination you demonstrated in your efforts to achieve better results for the organization will inspire many that follow you.  This probably will come across as cliche’ but the US is a great county.  My wife and I have been blessed to serve healthcare organizations in many states.  Every part of the country has a unique culture and climate.  It is interesting to learn how certain concentrations of ethnic groups came to be located as they are around the country.  You cannot learn nearly as much about an area passing through  as you can by living in the community for several months  at a time.  These aspects of Interim Executive services can be extremely rewarding.  Decision makers in distressed organizations are generally anxious to get help.  I frequently encounter staff that have been frustrated by the fact that they were let down by their leadership and as soon as you establish credibility, they engage you in as much Mentorship as they can absorb.

In the past year, I have received two of the most rewarding telephone calls of my life.  One came from the Chairman of the Finance Committee of a hospital system that had just been upgraded by a rating agency.  The first call he made was to me to thank me for my intervention years earlier.  In his opinion, the results of my run in that organization laid the groundwork for the improvement in performance that led to a rating upgrade years later.  The second call was with a CEO who told me that the people in the community served by his hospital owed me a debt of gratitude for my service in spite of the fact that there were only a very few members of the community that had any knowledge that I had ever been there.

You might say, all of this sounds good but what about the people that came before?  I make it a habit to resist criticism of my predecessor(s) or the decisions they made.  In fact, I told one Board that as far as I could tell, the guy they got rid of was better technically than me.  As I said before, in nearly every case, they are good people and I do not know why they did what they did.  I was not there at the time previous decisions were made and I am not privy to the information they had or the pressures they were under when they made the decisions that sent them on a path toward transition.  I do know from personal experience how brutally agonizing it is to go through a transition, especially if it is the first transition for that departing leader.

The most common primary concern of departing leaders have expressed to me is that their successor will ‘trash’ them.  I have had this happen to me and I know how it feels, especially when the criticism is coming from someone that does not know me.  As a result, I have made it my habit to reach out to my predecessor and offer any assistance that I could during and following their transition.  These people are not happy and initially some of them have not been particularly happy about dealing with their involuntary successor.  I am very proud to say that in most every case, each of these executives have gone on to much bigger and better things and I maintain friendly, cordial realationships with them.

I have been instrumental in replacing myself in several organizations including casting the deciding vote.  I am happy to say that in each of these situations, my successor is still in place and the organizations are better for my Interim Executive intervention.  I was blessed and honored to have the opportunity to serve in a variety of cultures, climates and communities.

So if you are looking at a career move, you can handle the lifestyle and you wish to make a difference while earning above average income, you might be suited for Interim Executive Services.  Obviously, this work is not well suited for people trying to raise families.  I will conclude by stating that if you are married,  the unqualified support of your spouse is a necessity for success as an Interim Executive.  I will write an article in the future on how to qualify yourself for one of these roles.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.

The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link in the menu bar at the top of this web page.

This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

There is nothing that I can do for you.

 

Responding to my blog article entitled, “Why do CEO’s get fired . . . ” Bill Eikost, a long time aquaintance of mine in a comment raised the following question:

“In one facility, the hospital had contracted with a large consulting practice to come in and do an assessment of the organization.  As I understand it, when they made their presentation, which included some tough decisions be made, the board objected to it not being in the best interest of the organization or the community.  Why have them come in in the first place then?  The CEO supported the idea of the change but was met with resistance from his board. In almost all cases, I would bet the board wins.  As a result, many of the senior leadership left and they brought in or promoted new leadership to continue the course. ”

I have been mocked for having epiphanies.  People tell me they are tired of hearing some of the stories I use to make a point or illustrate a concept.

Recently, I have been dealing with some vexing problems related to matters beyond my control and entrenched, recalcitrant culture.  It was during a personal low point of frustration, depression and demoralization about these matters that I had yet another of my epiphanies.

Heart surgeons regularly carry out miraculous interventions that result in people that would otherwise be dead walking from the hospital under their own power healing of their afflictions.  One of the more difficult aspects of being a cardiovascular surgeon is case selection.  CV surgeons and their practices are continuously evaluated by all sorts of local and national statistics.  One of these statistics is mortality.  What percentage of patients treated by this physician ended up dying?  Talk about a Hobson’s choice!  On one hand, the physician is motivated to do everything within his power to give the patient the best possible chance of survival.  On the other hand, there are times when the probability of a surgical intervention being successful is nominal.  A surgeon that is too aggressive taking high risk cases will have an above average mortality rate and be branded a bad doctor.  Can you imagine what it must be like to look another human being in the eye and tell them, “There is nothing I can do for you.”  The surgeon knows that putting the patient through a procedure would be unlikely to be successful but he also knows that he is in many cases effectively issuing that patient a death sentence.  I could not do this and I have respect for these surgeons that I cannot articulate.  I do not think I could do this and live with myself.  The next time you see one of them, thank them for their service.

Getting back to my epiphany, some of the things needed to ease the stress on the organization were going to require some community leaders and Board members to step up to challenges and take on controversy they did not sign up for.  Sometimes the easiest thing to do is nothing and if this were to occur, I was finished.  I had reached the point where if this was to be the case, there was nothing more I could do for my organization (patient).  In the middle of the night I awoke in a cold sweat when this realization dawned upon me.  Suddenly, I had insight into what it must feel like for a surgeon to tell a patient they cannot be helped.  If the resolve in the organization and the Board to take on the hard work was not there, I was done.  It would make no sense to continue to play along burning up time and resources on a hopeless cause.

All of us have heard the admonition, “Do not go to the doctor unless you intend to do what he tells you to do.”  Compliance in medicine is a huge problem.  If I was at this point, I could easily log some more time but effectively it was over.

I have seen this phenomena before but I did not see it in this light.  I have seen several organizations go through this process.  In one case, an organization that had never had what I would describe as a professional materials manager expressed resolve to recruit one.  An outstanding incumbent was recruited following a long, arduous retained search.  And of course, less than six months into his run as he would say, “the defecation hit the rotary oscillator.”  Seemingly over night, the organization that said it wanted a materials manager changed its mind when the realization of what actually having a materials manager really meant starting dawning.  Sadly, the new executive’s tenure ended up being very short, his career and his family were disrupted and the organization went back to doing things as they had before.  This was the first but certainly not the only time I have seen this happen.

Time for another digression.  About the materials manager referenced above.  His case is fairly typical.  Sometimes the fit is not right but that does not mean the person is bad.  While no one would recommend anyone going though a situation like the one described, the manager emerged from this trauma a better person for the experience, stronger, wiser and with a clearer vision about evaluating opportunities.  He has gone on to have a distinguished career and currently holds one of the largest material management jobs in the entire healthcare industry and thank heavens, the two of us are still on speaking terms.

A lot of people say they want a lot of things until they fully realize what is involved or what the ‘desired’ change implies.  For example, I described what it takes to obtain an advanced role in an organization in a previous blog article.  A lot of people say they want the lifestyle and income that comes with higher level jobs until they find out how long and hard the road is to get there.  Unfortunately, I do not know of any way to assess in advance the point at which resistance will be encountered or how it will be addressed.

In my recent personal case, I have seen support I would not have believed possible come to bear in an effort to achieve the favorable change for the hospital and the community that is there for the taking.  You never know what people are going to do until the chips are down and the hard questions are on the table.

Kevin Rutherford, a trucker, radio commentator, author and producer of a trucking website ends his shows with the admonition to, “Do the hard work and master the journey.”  I like to say that you will never find the walls unless you are willing to push the limits.

Success is not measured by how long you last in an organization.  It is not measured by how  good you are at ‘staying off the radar’ when the organization is seeking to improve itself.  It is not measured in how adept you are at keeping your job.  Success in my opinion is defined by the degree to which you demonstrate selfless leadership to take your area of responsibility to the next level.  I have posed the pertinent questions before.  Are you and your area an example of the best of their type in the industry?  Are you an example of what others should aspire to become?  Are you and your area an example of best practice?  Is your expertise sought out by peers striving to improve themselves?  Do you know what data is used to make these determinations?  Do you compare favorably with all of the statistics available to evaluate your leadership?  Are you taking initiative or are you waiting for someone to come along and tell you what to do?

An honest self-assessment is very difficult but in my experience, no one that was ‘left behind’ should not have seen it coming.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two that might be valuable to you.  I can also help with career transitions or career planning.
The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link in the menu bar at the top of this web page.
This is original work.  This material is copyrighted by me with reproduction prohibited without prior permission.  I note and  provide links to supporting documentation for non-original material.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.

 

 

CFO Radio Interview

On October 17, 2011,  I was interviewed by Lorraine Chilvers on CFO Radio on the topic of Interim Executive Services.  The interview that lasted around 45 minutes is proceeded by some industry news.  During the course of the interview, I am asked about a variety of aspects of Interim Executive Services.  Since Lorraine has insight into the Interim Executive Consulting business, her questions were deeply probing and she did a very good job of engaging me on many of the more important aspects of Interim Engagements and the Interim Executive lifestyle.

Lorraine and I previously served together at Tatum.  Eventually, we went our separate ways.  I went on with my Interim Executive Services career and Lorraine went on to found Delaney Consulting and CFO Radio.

At the time of the interview, I was serving as the Interim Chief Financial Officer of The Central Florida Health Alliance serving Leesburg and The Villages in central Florida.  I recently listened to the interview again and it struck me that the material in the interview is just as current now as it was then.

The interview may be found here.

The stages of an interim executive engagement

I have come to realize in my practice that an interim engagement follows a predictable pattern.  I have seen this happen time and again.  I understand the process that a decision maker goes through during the course of an interim engagement.  A majority of decision makers dealing with transitional situations have little or no experience with interim executives.  I asked about this as a part of my dissertation research.  A small proportion of my respondents (35.7%) reported having experience engaging and managing interim executives.  Another 33.6% of my respondents said they were knowledgeable about interim executive services but had not engaged an interim executive.  Similar to Elisabeth Kübler-Ross‘ five stages of grief, I have observed one organization after another going through a similar process during an executive transition.  The primary difference between organizations and decision makers is their exit point from this process. Some never get around to making a decision or decide to avoid the use of an interim.  In order of their occurrence, here are the stages of an interim engagement that I have experienced.

We do not need an interim – When faced with a transition situation, organizations employ a variety of strategies.  Some use internal resources, some leave the position open and others resort to consultants.  In a future blog, I will address the difference between an interim executive and a consultant.  Organizations will frequently initially resist the fees associated with engaging an interim executive.  They will search for any possible alternative to engaging the interim.  They will spend weeks or months struggling with the interim decision.  I have seen the passage of over six months between the time first contact was made with a decision maker regarding an interim position and the time the engagement actually started.

Acceptance of an interim – All too often, once the decision is made to employ an interim, the client wants the interim TOMORROW!.  Generally, the client communicates their desire to accelerate the interim engagement as a means of managing the cost of the interim engagement.  Sometimes, too much time passes between the time the decision maker meets an acceptable interim and the time they make a decision.  Then they are frustrated when they call to find that the interim they wanted is now engaged.  I once had a potential client get upset with me for ‘putting pressure’ on them to hire me.  All I had done was to tell them that I was being proposed by the firm I represented on multiple jobs and if they wanted me, they needed to make a decision.  In this case, one of the reasons they wanted me was perceived cultural fit.  They wanted someone that would fit into a rural eastern North Carolina culture and I had been a hospital CFO in that area.  Two weeks later, I received a desperate call.  They wanted to know how fast I could get to their site to address what had become a big problem.  I told them that I was literally on my way to Milwaukee.  I had been engaged a few days earlier by one of the other clients that had seen me.  The potential client that had let me ‘get away’ was not happy.  Ultimately, the firm lost the gig because they did not have any other resources that this client liked and I got to spend the winter in Milwaukee instead of eastern NC.  If you are a decision maker, MAKE A DECISION.

 
Recognition of the value proposition – I start my engagements with an assessment.  The purpose of the assessment is to determine the degree to which the function I am filling is or is not meeting the needs of the organization.  During the assessment, it is common to find a number of significant opportunities for improvement.  My experience has been that when a client sees the difference between the interim and what they had before or when they see the magnitude of opportunity revealed by the assessment, the value proposition ‘clicks.’  There is no easy way that I have found to tell a prospective client before an engagement that my experience might be valuable to their organization .  It comes across as self serving.  Once they understand the potential of working with a professional interim that is capable of being transformational in their organization, they want to get as much as possible out of the the engagement as fast as they can because they understand that the potential value is multiples of the cost.  This frequently reduces the client’s focus on getting the engagement over as fast as possible.

 
Employment overtures – Somewhere along the line, usually in the six to nine month period of an engagement, the client decides that the interim is highly desirable and recruitment overtures start.  Sometimes, they come to doubt that a recruitment would result in an equal or better permanent solution. According to my dissertation research, 25% – 40% of the time, the overtures result in employment even if it was not the initial intent of either party.  Tatum called this a ‘conversion.’  The respondents to my dissertation research survey stated that they had converted their interim 35.9% of the time.  If the interim is sophisticated, they will generally resist converting as they see consulting preferable to employment.  The challenge to this part of the process is to get through it without the client becoming concerned that they or their organization are not good enough for the interim.

Diminishing returns – If the interim does not convert, they ultimately begin to experience difficulty in achieving transformational gain in the organization.  Initially, they were a novelty full of energy and fresh ideas.  They are generally very impressive compared to their predecessors.  They are humored by the bureaucracy in the organization and their harvest of low hanging fruit is impressive.  Sooner or later, the resistance of the organization to engage in increasingly difficult change and increasing resistance on the part of the bureaucracy reduces the ability of the interim to produce transformational change.  One day the leadership is evaluating their situation and they conclude that the consultants are not earning their keep and the transition(s) start.  I will discuss the topic of culture and change in organizations in a future blog entry.

Recruitment – During this stage of the process, the interim participates in the recruitment by performing a number of key tasks.  They spearhead the development of a revised job description, they develop a specification for the recruiter, they participate in the interviewing and vetting and ultimately in the selection of the permanent candidate.  I have cast the deciding vote on my replacement more than once.

 
Transition – The transition occurs when the interim is replaced by a full time employee which can be the interim.  If it is not to be the interim, the interim generally assists the organization with the recruitment and on-boarding process.  When the on-boarding process is complete, the interim moves on to their next challenge usually leaving their client organization in much better shape and thankful for their service.

I have personally experienced this progression of an interim engagement time after time. I have also seen every one of my engagements run longer than initially discussed.  Before a client appreciates the value proposition, they are very highly motivated to get the engagement over as fast as possible.  I have been told time and again to not expect more than ninety days, 120 days at the most.   My average engagement is nine months and I am currently twenty months into an engagement  was initially mutually understood to be limited to an assessment only.

The other interesting phenomena that I have seen is that the process can be exited at any stage given circumstances unforeseen initially.  This is one reason that I go the extra mile by making it very easy for my clients to exit an engagement should it become necessary.

One of the factors that lead to engagements dragging on is that the client becomes comfortable with the interim and they allow distractions to degrade their focus on moving the organization beyond the interim engagement.  The next thing they know, the engagement is approaching its first anniversary.

If you are a decision maker considering an interim, my hope is that this material will enable you to better manage the engagement and get the most from it for you and your organization.  If you are considering interim services, and if you are any good, you should expect that your engagements will nearly always run longer than initially discussed with the clients.  Therefore, as an interim, you need to be careful making forward commitments that assume the engagement will be over by a time certain.

This is original work.  I have not seen content of this nature in my extensive dissertation research.  This material is copywrited by me with reproduction prohibited without prior permission.  I always note and  provide links to supporting documentation for non-original material.

Please feel free to contact me to discuss any questions or observations you might have about these blogs or interim executive services in general.  As the only practicing Interim Executive that has done a dissertation on Interim Executive Services in healthcare in the US, I might have an idea or two you would find value in.  I can also help with career transitions or career planning.
The easiest way to keep abreast of this blog is to become a follower.  You will be notified of all updates as they occur.  To become a follower, just click the “Following” link in the menu bar at the top of this web page.

If you would like to discuss any of this content or ask questions, I may be reached at ras2@me.com. I look forward to engaging in productive discussion with anyone that is a practicing interim executive or a decision maker with experience engaging interim executives in healthcare.