Tag Archives: employment

Should I pursue professional credentialing?

I need to start this article with a disclaimer.  I am HIGHLY BIASED in favor of professional credentialing.  If this is offensive to you, stop reading this now.  I am fairly well credentialed.  I have a Masters of Business Administration degree and a Doctorate of Science in Healthcare Administration.  I hold Fellowship certifications from both the Healthcare Financial Management Association (HFMA) and the American College of Healthcare Executives (ACHE).  I hold HFMA certifications in Managed Care and Patient Financial Services (PFS).  I am in the first class to be certified by HFMA in managed care and I was the national co-valedictorian in my HFMA PFS exam class.  I served a sentence on HFMA’s Board of Examiners (BOE) including a year as Chairman of the BOE.  The BOE is responsible for HFMA’s professional certification program.  Other than this, I have not done much to improve myself professionally or promote professional certification.

Lest this come across as self aggrandizing, you should know that I had a rough time in high school but ended up being the first in my family to earn a bachelor’s degree and that undergraduate degree was bestowed by The University of Virginia’s McIntire School of Commerce.  One of the highlights of my service to the healthcare profession is my service on HFMA’s BOE.  A number of changes to the HFMA certification process occurred during my service on the Board and as the Chairman of the BOE that I am very proud of.  Changes that were focused on making the certification process more objective and making the preparation process more efficient.

You’re damn right I think credentialing is important.

More than anything else, I think a professional credential makes a statement about you.  I discuss this in my article about getting ahead.  Holding professional credentials makes a statement  that you have shown willingness to go beyond the minimum required by a job to be recognized by your peers in your discipline as being one of the best among them and an example for others seeking career advancement and improvement.

Professional certifications usually require a combination of education, experience and ability to demonstrate mastery of a discipline.  The effort required to obtain a credential is useful in that in the process of achieving the recognition, it is impossible to not learn something or possibly a lot.  This knowledge is helpful in career development and can differentiate you from your peers in a competitive job or search situation.  Among your peers, those with professional certifications are typically held in higher esteem.

For some credentials and some disciplines, certifications are minimum requirements for certain roles.  There was a time when holding an ACHE Fellowship was practically a minimum requirement for becoming a hospital CEO.  That is not as true today because of the shortage of FACHEs and the effects of some head-hunters focused on making their own jobs easier by convincing Boards of Directors that requiring professional certification will unnecessarily restrict the pool of candidates.  My question of a Board making a decision like this is why would they want to expand their net to catch applicants that did not feel that getting certification in their discipline was important?  Ironically in hospitals, these Boards preside over medical staffs that increasingly require Board Certification of their members.  My question is if they support requiring Board Certification of their physicians, why would they intentionally establish a lower threshold for the executives operating the organization?  If the demand was higher for certified leaders, it could result in an remuneration differential and lead to more executives seeking certification.  If I was advising a Board or a hiring executive, I would and have required headhunters to build a very strong case for recommending consideration of a non-certified executive when certified executives are available.

If you are an executive that is interested in career advancement, my advice is that credentialing is one of the first things you should consider.  The type of credentialing you pursue can vary depending upon your current or desired role.  In nursing for example,  a wide variety of credentials are available.  Many nurses carry several credentials.

We have all heard the adage that if something was simple or easy, everyone would have it. This principle certainly applies to credentialing.  Credentialing can be expensive, time consuming and difficult.  Credentials require a combination of minimum education, in-role experience, examinations, service under the tutelage of another certified leader and the like.  Each discipline has a process for determining the requirements for one of their members to be recognized as the best among them.  Some are more rigorous than others.  An argument can be made that the more onerous the process, the higher the value of the credential and the greater the degree to which a credentialed executive is set off from his peers.  In the case of HFMA, the credential is a Fellowship and it is earned by less than 10% of the members.  If you are a HFMA member, start paying attention to the certified status of your peers and look at their career advancement success compared to the 90%+ of uncertified members.  It should not surprise you to discover that the type of people that pursue professional certification are the same type of people that tend to advance their careers faster than others.  Is it the credential?  To a degree, I would argue that the answer is yes.

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 and attribution.  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 a blind reference?

Some people naively think that the only reference checking that is done is with the references given by a candidate or a head hunter.   Executives recruiting for talent will peruse your CV looking for places where you might have common acquaintances.  They will also look for places that some of their friends and professional contacts might have insights.  When these links are found which is most of the time for an experienced recruiter or hiring executive, you are about to become the victim of a blind reference.

A ‘blind reference’ is an investigation into your past by a hiring executive that you know nothing about.

I do not put a lot of faith in  references provided by a candidate although I have had candidates give me references that were not very complimentary of them.  If you are going to give a reference, at least have an idea about what they are likely to say about you.  No one that has any sense is going to intentionally give a bad reference on a candidate to a stranger.  I also disregard reference letters.  No one is going to write a letter that states the candidate is bad.  On occasion, I will write a reference letter for someone as a personal favor but I aways counsel them that reference letters in my opinion are a total waste of time.  The only time I pay any attention to a reference letter is if I know the author.

Because of political correctness and the cold legal realities associated with references these days, the best you are going to get from formal references in most cases is that the candidate was hired on one date and departed on another date.  The most you are likely to learn is that the candidate actually did work for the firm you are contacting for the stated period of time.  They will rarely tell you anything more because references are subjective by nature in most cases.  Subjective references that cause a candidate to be ruled out of a search can become a liability for the person that gave the reference.  This is one of the reasons that blind reference checking has grown in my opinion.

If I get a reference call on a candidate being evaluated by someone I do not know, I refer the call to HR where I know what they are going to be told.  Even if the reference call comes from a friend,  I know the candidate and I know them to be bad, usually instead of giving a bad reference, I will refer my friend to HR where they will get the standard, canned response.  The hiring manager gets the message.  If a friend encounters me refusing to give a reference, they always get the message.

The more frequent call that I get is from a decision maker that is checking references that are not on the candidate’s list.  These are the calls that are dangerous for candidates because they are blind to the candidate; hence a blind reference call.  The candidate will never know in most cases they were vetted through a blind source.  This is one of the many reasons why it is so important to keep up your networking and to not burn bridges unnecessarily.  If you left a place under questionable circumstances, you need to have a good explanatory story and you need to be forthcoming and transparent.  Of course a blind reference is not necessarily a bad thing.  Under the right conditions, it can propel you to the front of the line.  I received a blind reference call on a candidate I happened to be considering at the same time.  I told the blind reference caller that they could dispense with their questions because my reference will be very simple, “If you do not hire her, I will.”  I had worked with this candidate before and she is outstanding.  She was going to end up with a gig regardless of how the reference checking worked out in this case.

When I get a blind call from someone I know and trust, they are going to learn the whole story.  The reason is that I know I can call them to have the favor returned at some point in the future.  If the candidate departed under less than ideal circumstances or told a story that I know to not be true, I will give the reference to HR as stated above.  This usually surprises the decision maker that hoped to get something from me.  The fact that I refuse to provide a reference for someone that the decision maker knows I know well usually tells them enough, especially when I put off multiple requests for help.   About the third time I refuse to provide any information, the recruiting executive gets the message.  If you are going to engage in this activity, you have to be absolutely certain that your confidence will be protected.  This is the main reason that I resist giving references to head hunters unless I know them personally because it is hard to be certain your confidentiality will be protected.

When you are looking for a job, who will the hiring decision maker call?  What will they be told by people you used to work around?  Time after time, I have received blind reference calls.  Often, these calls are about someone that has done little if anything to endear themselves to me or to even keep in touch.  People like this generally do not return calls, ask of an acquaintance while offering nothing of value to i.e., they do not engage in networking, they do not accept meetings or referrals, they do not attend or participate in industry related networking or continuing education activities such as ACHE or HFMA.  I wonder what these people expect I am going to say about them?  And of course, all of this is above and beyond anything I might know about their acumen, experience or capabilities.   I would rather not receive these calls in the first place but I do not control who calls me.

I do not know what it is about some people.  In one case, I reached out to an executive that I thought might benefit from my insight about handling executive turnover in his organization.  He humored me then never called me back in spite of the fact that I specifically requested a call regarding a wealth of information that I volunteered.  I never heard from him and I do not expect to hear from him because his failure to take my advice was at least partially responsible for his own firing a couple of months later.  A few weeks ago, I got a blind reference call.  The guy was seeking employment with a consulting firm and I knew the hiring executive very well.  What do you think happened?

This kind of thing does not have to happen to you.  If you are smart, you will get serious about networking and building as many positive relationships as you can.  Many of these relationships come from active participation in associations, alliances and industry peer groups.  You should volunteer your time to give yourself exposure to people that you might need for a job some day and in the process help them develop a positive impression of  you.

There is a saying that there are three kinds of people;  Those that make things happen, those that watch things happen and those that wonder what happened.  You never know when someone is going to make a call to someone that you might not even know; about you – a blind reference.  When that occurs, what will the results of that call be?  If you or someone you know is having difficulty getting a job and their qualifications appear competitive, they may be the victim of blind reference checking which puts them in the category of wondering what happened.

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.

Where is Mark Richt?

A lot of people do not understand executive succession events.  It is common for a leader to be liked inside and outside the organization.  The performance of the leader is seen differently based upon the perspective of the viewer.  While many may see a leader as ‘nice’ and ‘trying hard’ others see him as ineffective.  In several of my articles, I make reference to the fact that as you progress in leadership, you are evaluated more on the results of what you do than the effort expended in leadership.  Some times, personal or organizational limitations inhibit the potential of a leader to be effective regardless of how hard he tries.  Ultimately, the people responsible for the leader conclude that in order for the organization to reach its perceived potential, a leadership change is necessary.  It is at this point that executive turnover begins and it is almost always followed by collateral turnover as lower level leaders are replaced in an effort to improve the ability of the organization to better meet its challenges or mission.

In Georgia, we have an excellent example of this phenomena.  When someone asks me what happened to someone or how the organization could do something so harsh to such a nice guy, I ask them, “Where is Mark Richt?”  In November of 2015, the University of Georgia announced that Mark Richt was leaving.  Many wonder why.  This gives me an opportunity to launch a Socratic dialog.  My questions usually go something like this:

Would anyone argue with the following premises?

That Mark Richt was not a nice guy?

That he compiled a record at Georgia and in the NCAA that places him among the icons of sport leadership?

That he did not understand the game of football?

That he did not want to win?

That he did not live an exemplary Christian life?

That he intervened in the lives of dozens if not hundreds of young people to set their lives on a better course?

And in spite of all of this, he is gone.  However painful the transition must have been for him, at least it was a homecoming of sorts as he has returned to his alma mater in Florida.

The reason for the transition is that the people responsible for Mark’s employment concluded that the program was not going to reach its expected potential under his leadership.  Those of us familiar with SEC football know that this means that nothing much matters in GA if you cannot beat Alabama and Florida consistently.

People are inclined to blame a lot of things for a situation like this.  Things like recruiting, the players, the coaches, facilities, funding, the play book, play calling and on and on.  Sometimes a coach like a business leader is handicapped by unexpected loss of talent due to behavioral issues like those pointed out in another of my articles, injuries, transfers or other losses.  The reason is irrelevant.  The leader of an organization or part of an organization is accountable for the results achieved or lack thereof and a responsibility that cannot be abdicated rests upon his shoulders.

Sometimes, leadership turnover induced in an organization makes things worse.  We will see as the season progresses if the Georgia team has achieved improvement.  As is the case in situations like this, it may take some time (several seasons) before the final analysis can be done.  As I have said before, if you are a leader, you have to lead; from the front.  You cannot wait for someone to tell you what to do.  In order to be effective, you must take initiative and frequently risk if you wish to keep yourself ‘off the radar.’  This is unless you have reached the limits of your capability and are falling victim to the Peter Principle.  If this is the case, you still have control of your destiny.  You must continue to invest in yourself though study, professional credentialing, post-graduate education or other means of continually re-inventing yourself and maintaining your relevance to a constantly changing and increasingly challenging environment.

The current healthcare environment is difficult to say the least.  As the industry transitions to value based payment, many of the rules and assumptions of the past are crumbling before our eyes.  Individuals and organizations that are capable of adapting and prospering in this rapidly changing environment will do well while many others will fall by the wayside.  Leadership is hard enough in a ‘stable’ environment if there is such a thing.  It is infinitely more difficult in an environment where the organization is striving to improve itself while it reacts to external environmental forces.

What is the outcome of your self assessment?  Are you up to the challenges?  Do you understand the nature of coming heightened demand to make your area better?  If so, are you up to the challenges and opportunities that are being presented?

One of my personal challenges is that I am ever cognizant of the difference between what I believe are my capabilities those of my team of leaders and what I believe the environment is demanding.  I will never be satisfied that we are accomplishing as much as our collective potential should deliver.  As a result, I spend a great deal of time in continuous study and research in an  effort to improve my ability to understand and properly respond to challenges, opportunities and risks that come my way every day.  I feel the burden of leaders reporting to me, the staff of the organization, the patients, the medical staff and the hope of the community that we will ‘get it right’ for them.  I find the exhilaration of this dynamic environment stimulating and I am up to the challenge.  My hope for you is that through these articles and your development of you own capability you will be inspired to emerge as one of the strongest leaders in your organization.

As the healthcare environment continues to become more challenging, organizations and their leadership teams are being shaken out.  This is what is causing a lot of the consolidation we are seeing in the healthcare industry.  Leaders, systems and processes that worked in the past are failing in this tougher environment.  Some of the problem is government induced problems that are difficult if not impossible for community hospitals to overcome.  An example is the cumulative effects of government healthcare policy on rural hospitals that are systematically being forced out of business.  In spite of these handicaps, some organizations do better in a given environment than others.  There is a dearth of leadership in healthcare just like there is in professional sports, business and other endeavors.  One of the causes of the inordinately high turnover in healthcare administration is a continuing effort on the part of hospital Boards and executive leadership to improve the caliber of talent and this effort is one of the reasons that good people are being turned out of organizations at an alarming rate.  One of the few benefits of this activity is that it is creating growing demand for Interim Executive Services.

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.

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.

 

 

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.

 

 

How do I get ahead?

A frequent question I get is how do I advance my career?  How do I get ahead in the organization?  This is a question I asked myself a lot earlier in my career.

The first question to ask is what does it mean to you to ‘get ahead?’  Success is not always best measured by career accomplishment.  I have learned that life is full of trade-offs.  If you wish to advance your professional career, you are going to have to pay a price.  The price is measured in short-term sacrifice for longer term goals, moving to where the opportunities are, pursuing advanced education and professional credentialing among others.  These ‘prices’ are higher than many people are willing or able to pay.  The effect is that they get trapped in roles where they can not realize or achieve their full potential.

When I was coming along, I was always looking up and ahead.  I was the first in my family to earn a college degree.  My parents did not understand college but they did recognize that people with college educations did better.  In college I was exposed to people that had achieved much personal and professional success.  I was inspired to replicate what these people had done so that I could enjoy the niceties of life that they had earned.  When I started working, it seemed to me that given the chance, I  could do better than the people ahead of me in the organization.  I set myself to learning what they had done to become qualified for their roles and I started closing the gaps of experience, expertise, knowledge and credentialing.  Before long, I was given consideration and started achieving my goals of reaching advanced roles in healthcare administration.

One of the things that occurred to me along this road is that the key thing organizations select and reward leaders for is cognitive skills.  Decision making in my opinion is one of the most if not the most valuable skills a leader can develop.  The better you are equipped to make decisions, the more responsibility the organization will bestow upon you.  The larger the responsibility, the more substantial the risks and rewards associated with the decisions you are called upon to make.  These risks and rewards are ultimately reflected in the remuneration for which you are eligible.

In my practice as an Interim Executive, I learned that the primary factor differentiating organizations that were doing well from those that ended up with challenges and transitions is less than optimal decision making.  Show me an organization with challenges, operational difficulties and unacceptable financial results and I will show you leadership that has compiled a poor record as a result of questionable decision making.

As I have reflected upon this phenomenon, it has occurred to me that as we progress through our career and through increasingly responsible roles, the nature of our work changes.  This has led to the development of my ‘Model of Career Progression.’

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Early on in our career, the amount of ‘work’ we do is how we are measured.  The work is usually measured in volume and it frequently requires a high level of technical skill but not much cognitive skill.  For example, what field on what page do I access to find certain information?  How many ‘activities’ can I complete in one day?  I once had a senior leader ask me if I had reviewed certain accounting journal entries.  I told him that I did not know what drawer the journal entries were stored in.  I did not know where the journal entry pad was and I could not remember whether the debits went by the door or the window.  What an outrageously stupid question!  I have not reviewed journal entries since I was a Controller over thirty years ago.  I am not paid to review journal entries, I am paid to assure that the organization’s financial statements are timely, materially accurate and that they fairly state the position and operating results of the organization.  Can you see the difference?

As you advance in an organization, technical skill becomes less important and decision making skill becomes much more important.  At higher levels of responsibility, you become more of a generalist because you are not evaluated based on how much ‘work’ you do.  You are evaluated based on the results of your leadership, particularly as it relates to the outcomes of your decision making regardless of how much time and effort you expend in the process.

In my opinion, the development of cognitive ability is what will launch or limit your ability to advance in an organization.  How do you develop cognitive ability?  All of us are limited at some level by our basic intellect but I do not think that is what constrains most people.  The reason is that people like Earl Nightingale and others have said that most of us rarely use more than 10% of our mental capacity so I am not buying the theory that people are not ‘smart enough’ to do higher level cognitive work.  The way you develop your skills is to invest in yourself by seeking advanced education and professional credentialing in your area of expertise or interest.  Continuous self study helps you to cement your position when given opportunities to function at higher levels.  Experience in multiple situations is also helpful.  You do not necessarily have to leave the organization to gain this experience.  I have counseled numerous young people to seek opportunities in other ares of the organization to learn as much as they can about how the enterprise functions and to see where their areas of greatest interest or gifts lie.

There has never been a time in healthcare that more and better leadership is desparately needed.  There are plenty of opportunities available for those who wish to advance their careers.  All you have to do if you are one of these people is to start investing in yourself.  I can assure you from my own personal experience that investment in yourself is the best investment you will ever make.  I don’t care how cliche the phrase is.  It has served me and a number of other very successful people I know extremely well.

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.

 

Are you a CEO? Have you been caught looking? Do you know anyone that has been caught looking?

I recently took part in reminisces of some of the organizations that some of my friends and I have served or known about.  One of the more common reasons for CEO turnover is an unexpected accounting adjustment.  Eight figure adjustments that go the wrong way are too common and there are few things that will get a CEO fired faster than his board learning that they are going to have to absorb a $50+ million loss that occurred on the CEO’s watch.  Like it or not, the CEO will be held accountable for hiring or retaining a CFO that could not produce accurate and timely financial reports.  He is expected to have a sufficient grasp of what the CFO is doing to control their work.

A common cause of this type of an adjustment is overstatement of the value of accounts receivable or stated another way, understatement of contractual allowances.  These understatements lead to interim income statements being overstated in terms of operating margin.  How does this happen?  Sometimes the CFO does not fully understand what he is doing, his models fail or he becomes confused by changes he cannot explain.  In other instances, CFOs are under withering pressure to produce results to meet expectations of a financial plan, corporate organization or worst of all, incentive compensation targets.

In my experience, few CEOs appreciate the degree of potential error in net revenue estimates or the degree to which their CFO may be exercising judgment in the determination of the appropriate valuation of accounts receivable.  Unless there is absolute transparency and crystal clear communications between the CEO and CFO on these issues, there is a very good chance that the CEO is setting himself up for a very unpleasant surprise.

Given this risk, what is a CEO to do?  How does the CEO manage and mitigate this risk?  How can he know his balance sheet is properly stated?

Without going into vexing detail about how all of these calculations are done, there are a few high level indicators that every CEO should be watching as indicators that things are not as they appear.  First, the CEO should review and understand every adjusting entry made by the outside auditors during the external audit.  Each of these entries represents either the correction of an error found by the auditors or a difference of opinion between the auditor and the CFO as to how a transaction should be recorded.  In a perfect world, there would be no audit adjustments and they are sometimes symptomatic of problems in your finance department.  If you have experienced adjustments, your focus should be to see that they are eliminated.  If your finance team cannot get this done, you have a problem that will probably not improve on its own.  These errors are also symptoms of the fact that your interim financial statements were not correct.  The magnitude of the adjustments or the difference between the last interim statement and the audit indicates the lack of precision of your finance team.

The CEO should also be cognizant of the contents of the management letter.  The management letter addressees internal control matters.  Again, in a perfect world, there would be no comments.  I have seen organizations that did not even get a management letter which is almost as bad.

Another thing the CEO should be doing is meeting privately with the audit partner.  There is no one that is in a better position to evaluate the efficacy of an organization’s accounting and finance functions.  My point here is not to address the audit process but to help a CEO avoid being blind sided by a large, unexpected adjustment.

Time and again, I have seen CEOs taken totally by surprise when their auditors recommend large, unfavorable adjustments to the value of receivables, revenues and profits.  All of these items are directly linked.  Time and again, the CEO that likely had no idea what was going on in his finance department is one of the first victims of the transitions these events precipitate.  The point of this article is to explain this linkage and give a CEO a couple of VERY POWERFUL tools to identify a potential problem.

Each month, your accounting department revalues receivables and in this process recomputes the reserves needed to reduce receivables to their realizable amount.  While these calculations can be very complex, the idea behind them is simple and compelling.  The other side of the adjustment to the value of receivables is the contractual allowance on the income statement.  The contractual allowance is what reduces gross revenue to net revenue.  If the contractual is too small, net revenue is inflated which leads to an inflation of operating income.  If the contractual is too large, net revenue and operating income are unnecessarily reduced.  Unfortunately, most errors go the other (wrong) way.  Note that I am including bad debt expense in this discussion as it too is a deduction from revenue (contractual) that reduces self pay receivables to their realizable amount.

How on earth can a CEO know if all of this is right?  The answer is extremely simple.  The CEO needs to look at only two indicators.  The first is the ratio of cash collections related to patient services to net revenue.  Net patient service revenue (NPSR) is nothing more complicated than an estimate of how much of the gross revenue will ultimately be collected.  If the NPSR estimate is correct, it will be proven over time by cash collections related to that patient revenue.  In other words, if your cash collections related to patients is less than your NPSR, you have a potential problem brewing.  In every situation where I became engaged in an organization that had just experienced a large adjustment to receivables, the cash to NPSR statistic was well below 100%.

A lot of people fail to grasp the magnitude of money involved in these estimates.  One organization I served was running a cash to NPSR ratio of 93% just before it experienced a write-down in receivables of over $60 million.  Consider a medium sized hospital with $1 billion of gross revenue.  Every percentage point of $1 billion is $10 million per year.  Be understated by 7% as was the case in the example I cited and you are looking down the barrel of a $70 million accounting adjustment that will reduce (or maybe obliterate is a better word) your operating margin for years and set you on a new, unplanned career path.  If anyone had been looking at this statistic, this tragedy may have been averted.  In the cited case, both the CEO and CFO Anton with a few others were ‘freed up to seek other opportunities.’

Changes in the magnitude of receivables (AR Days) can affect this statistic but if the cash is much below 97.5%, you had better start getting an explanation of the cause.  Why do I say 97.5%?  To account for normal variation, it is not unusual to see this statistic vary across a 5% (+/- 2 1/2%) range.  When it gets outside of that corridor, the CEO had better be pressing for answers.  He cannot say he was surprised by a proposed adjustment if his cash to NPSR ratio was low. He (and his CFO for that matter) should have seen it coming.

The second key indicator is yield on gross revenue.  What is NPSR as a percentage of Gross Patient Revenue?  The nominal value is not particularly  important as it varies widely by organization and by region of the country.  The explanation of this phenomena is beyond the scope of this article.  If the organization raises its prices and nothing else happens, yield will decrease because all payors do not participate equally in a price increase.  For example, an organization does not realize much of a price increase charged to Medicaid and/or self pay patients.   If the yield is going up, there are two primary reasons.  The first is that revenue cycle performance is improving significantly and if this is the (rare) case, good for you. This improvement should be validated by a decrease in gross and net A/R days. The second reason for increasing yield is that the contractual allowances discussed above are inadequate and you have increasing risk of an unfavorable adjustment in your future.  As I stated earlier, the nominal value of the yield statistic is not as important as its change over time.  A change in yield can be reconciled to the dollar by someone that knows what they are doing.  If the statistic is not decreasing slowly over time, you should be asking for explanations or seeking help from independent advisors to help you understand what is happening if you do not like the explanations you are getting.

A lot of the financial pressure on hospitals has a root in yield that is declining faster than gross revenue is increasing but that is the topic for another article. 

I would be the first to agree that it is unfair to see a CEO get whacked for a problem like this developing on his watch.  Unfortunately, I have seen this happen time after time as one unsuspecting CEO after another became a victim to judgment or accounting errors in their finance department.  I had Board members in a hospital that had relieved the entire leadership team at one time express remorse for knowing something was wrong but not knowing what questions to ask.  A savvy CEO will know what indicators to watch to give himself the best possible chance of not being caught looking.

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.
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.

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.

Types of interim executives and types of clients

I have run into too many people in healthcare administration that believe that executives are interchangeable.   To them, getting a CFO or other executive is like going to the store and buying a tool.  One is as good as another.  Sadly, many of these folks look at interim executives the same way.  Nothing could be farther from the truth.  A frequent cause of executive ‘failure’ is not that the executive did not have appropriate skills and experience.  The problem was that either the skill and experience match was not correct or the cultural fit was not right .

People have different reasons for going into the interim business and some of them have nothing to do with getting the best result for the firms they serve.  Similarly, decision makers and the organizations they represent often do not consider their own state of sophistication and have no idea how to get the best from an interim executive.  All too often, they are looking to get a warm body into a role ASAP.

When I was doing my dissertation research (RAS Dissertation 130530), I came across an article written by Goss and Bridson titled Understanding Interim Management.  Among other things, this article lays out the varying levels of interims and organizations.  When there is a mismatch between the interim and organization, the engagement is likely to fail to reach its potential to provide maximum value.   I have not seen an organization put this kind of thought into the selection of an interim executive.

Supply Side characteristics of the individual     Demand side organizational requirements  
Type of Interim Motive Capability   Need Role
Simple Route to a permanent job Operational and supervisory competencies Instrumental stopgap Managerial temp
Formal Best present option High level functional specialism Functional stopgap Applied consultant
Sophisticated Commitment to interim management career Strategic, entrepreneurial competencies and executive experience Transitional stopgap Transformational leader

One of the first questions this table raises from the perspective of an organization is what kind of interim are you looking for?  The sophistication of the interim and organization increases as they move down the table.  Two of the three types of interims are not really interim executives.  They are people that are looking for something to do or extra money as they seek a ‘permanent’ job.  Some of them are motivated to use the interim engagement as a means of bypassing the typical retained search processes that accompany executive transitions.  This is one reason why some recruiters do not like interim executives.  It is not because they do not appreciate the potential of an interim to add value to their mutual client but some of them have seen their searches disrupted by an interim that was angling for the job instead of properly supporting the transition.

The phenomena of an interim becoming an employee is more common than many people think.  This occurs in spite of the fact that there may not be intention on either side of getting into an employment relationship at the beginning of the interim engagement.  In the business, an interim that becomes an employee is typically described as a conversion (to employment).  When I worked with Tatum, we were told that the firm experienced a 25% – 30% conversion rate.  I looked into this issue as a part of my dissertation research.  Of my respondent decision makers, 35.9% have hired an interim executive.  Of this group, 45.5% have considered hiring their last interim executive and 34.7% of them were successful.  In other words, when a decision maker decided to try to hire their interim, they were successful in getting the interim to convert 76.3% of the time.  Had I known this in advance, I would have asked some questions designed to assess the sophistication of the decision maker to see if it made a difference in their tendency to try to convert their interim.

I understand the tendency of an interim to be solicited for employment.  It has happened to me on nearly every one of my engagements.  I selected interim executive services as a career for a number of reasons that in my mind make it preferable in my personal situation to employment.  This and other characteristics of how I approach an interim engagement meet the criteria of a sophisticated interim executive and my services to the organizations I serve are typically strategic and transformational.  In a future blog, I will address the topic of evolution of an interim executive engagement.

The table above shows that it is more likely than not that the interim you are considering is in a transition is either either using the interim engagement as a route to a permanent job or having nothing better to do at the moment.  This is a big problem for the engaging organization from my perspective.  If the interim is looking for the permanent job in your organization, they will not be objective and independent.  Every decision they make will be weighted on the scale of the degree to which engaging in a potentially difficult situation will affect their candidacy as a permanent employee.  If this is not the case, they could be using you as a safe harbor while they continue their search for a ‘real’ job.  Most of these types of interims are too dim to realize that no job is ‘permanent.’  The primary difference between an interim and and an employee is how they are paid.  Not only that, I consider it theft to be working on anything other Thant the engagement when I am on my client’s clock.  It is the mindset that goes along with the interim service that determines how much value an organization gets from the interim’s service.

To get the best from an interim, they should fall into the sophisticated category.  I uniformly recommend that organizations do not put their interims into their searches.  If an interim is interested in the job, they should compete for the job on the same basis and with the same handicaps as all other applicants.  They should not be trying to leverage their role to gain an advantage in a search.   I advise my clients that putting an employee into an interim role then ‘running’ them for the permanent job also results in sub-optimization of the role and its potential to benefit the organization.  In my opinion, an interim executive that is also a candidate for the position they are filling is conflicted by definition.  I would not take advantage of interim service as a means to get a job and I will not tolerate it if I am a decision maker on an interim assignment.  I do not think that is fair or honorable to the client, especially if the client is unsophisticated and not likely to recognize the conflict.

It is not hard to assess the level of sophistication of an interim.  Look at their track record and ask questions that are designed to gain insight into their personal plans and aspirations.  It should be easy to figure out how sophisticated your interim prospect is.  Similarly, if you are a true interim executive, make sure your client is sophisticated enough to use your services effectively.  If all they are looking for is a warm body to keep a chair occupied, you run a risk of being frustrated with your inability to address obvious problems in an organization.

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.