Organizational success = "4 + 2".

To improve hospital and medical staff relations and to foster collaboration, many institutions have turned to physician leadership programs for help. These programs strive to enhance physicians' leadership skills, as well their knowledge and understanding of the challenges facing hospitals and medical staffs.

Yet, those providing the funding for these programs often ask an important question. Do they really work? Are they improving medical staff effectiveness? If not, where should hospitals and medical staffs be focusing their limited time and resources?

Nitin Nohria, William Joyce, and Bruce Roberson studied 140 companies utilizing over 200 different management practices over a 10-year period. (1) What they found is the success of organizations depends on four key management fundamentals:

1. Culture

2. Structure

3. Strategy

4. Execution

The four must be combined with at least two of four secondary management practices:

1. Talent management

2. Leadership

3. Innovation

4. The ability to develop partnerships

They call it the "4 + 2" Formula. (1) How can we apply the "4 + 2" Formula to improve medical staff effectiveness and, as a by-product, hospital and medical staff relations?

To answer that question, we must look at the four management fundamentals of the "4+2" Formula. According to Nohria and others; to be successful, an organization must develop and maintain a performance-oriented culture. It must design and support a culture that encourages outstanding individual and team performance. (1)

For medical staffs, this means creating a culture in which all members of the medical staff are held accountable for its effectiveness and success. This can be accomplished by having the medical staff set and agree to expectations that champion not only high levels of individual clinical execution, but teamwork, ethical behavior, mutual respect for all members of the health care team and a commitment to their hospital and their community.

Once these types of expectations are set, performance measures based on the expectations can be determined, performance can be measured, feedback provided and performance improved. So, the first step to improving medical staff effectiveness requires putting time and resources into creating and gaining buy-in to a performance based culture.

Simple structure

The second management fundamental involves organizational structure. Successful organizations strive to make structure and processes as simple as possible. (1) For medical staffs, it means asking the question, "Does our current organizational structure simplify the work of our medical staff?"

Many medical staffs are ineffective due to elaborate administrative structures involving numerous departments and committees. How many committees does a medical staff require? The Joint Commission requires only one committee, namely a medical executive committee. The Commission does not specify any requirement for medical staff departments.

As a result, some medical staffs have decreased their number of departments, and reduced their committees to a select few, such as those for credentialing, quality and peer review, and the medical executive committee.

In some cases, they have eliminated departments altogether, opting to create clinical service lines that align strategically with the hospital's service lines. By simplifying the structure of the medical staff, the processes and work of the medical staff becomes more effective and efficient.

Focused strategy

The third management fundamental is strategy. Successful organizations devise and maintain a clearly stated and focused strategy. (1) For medical staffs, it involves deciding and recognizing what they must excel at, and clearly communicating the strategy to achieve those objectives to all members.

Traditionally, medical staffs are given the responsibility by the hospital board of directors for physician quality management and performance improvement, as well as the credentialing and privileging of licensed practitioners. However, in addition to developing and communicating strategies for success in these areas, a truly effective medical staff also must develop strategies involving succession planning, recruitment and retention to maintain key clinical services, as well as the development of new clinical services.

It is not enough for the hospital, alone to have a strategic plan. The medical staff and hospital, together, must develop a plan that enhances and complements the future of both.

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Operational excellence

The fourth fundamental involves operational execution. To be successful, organizations must develop and maintain excellence in operational execution. (1) For medical staffs, this means having processes and resources that are both effective and efficient with regard to their core operational responsibilities of quality management, peer review, credentialing, and privileging.

Achieving operational excellence builds upon the successful development of culture, which promotes excellence, simplified organizational structures, and well-developed and communicated strategies.

Talent

Once the fundamentals are addressed, organizations must work to develop excellence in at least two of four key secondary management practices. The first of these is talent management. Successful organizations that excel at culture, structure, strategy, and execution, understand how to attract and retain talent. (1)

They understand the importance of retaining and recruiting talent. A talent rich environment attracts additional talented people. Medical staffs can excel at this management practice by creating and fostering an environment that provides education, training, and resources to improve physician performance, and that recognizes and rewards physicians for outstanding performance.

Leadership

Another of the key secondary management practices is leadership. Successful organizations develop leaders who are committed to the organization's success, and who are able to build relationships at all levels of the organization. (1)

While a great deal of focus is placed on recognizing and enhancing medical staff leadership, it is important to remember that leadership development and training alone does not ensure success.

It is no wonder that many physician leadership programs fail to deliver on their promise of improving medical staff effectiveness and hospital and physician relationships, since many of these leadership programs are not delivered within an efficient, effective, strategically focused and performance-oriented, medical staff culture.

The result is that it is common to see interest in these leadership programs and attendance by the medical staff wane over time, since medical staff leaders and potential future leaders quickly realize that leadership knowledge and training alone does not create a more effective medical staff structure or improve relationships with the hospital.

Innovation

Organizations that excel at the secondary management practice of innovation are able to apply new technologies to enhance and support their structure, strategy and execution. (1)

It is not enough to merely bring new technology into an organization and expect great results if the management fundamentals are not done well. For medical staffs, adding new technology, such as electronic medical records, will not be successful, unless the innovation and technology are incorporated into the culture and structure of the medical staff by making the work of the medical staff more efficient to enhance physician performance.

Partnerships

The final key secondary management practice is the ability to develop and sustain partnerships. Organizations that are successful with partnerships invest time, as well as financial and human resources, to ensure success. (1)

Medical staffs and hospitals increasingly are entering into partnerships ranging from joint ventures to exclusive contracts for clinical services. Partnerships established between a hospital and certain groups within a medical staff that do not excel at their primary management practices will remain isolated "deals," not true partnerships.

These isolated partnerships often undermine relationships rather than enhancing overall hospital and medical staff relationships and effectiveness.

There is no magic bullet to achieving organizational success. Succeeding at the four core management processes of culture, structure, strategy and execution is hard work for anyone, including medical staffs and hospitals. It takes commitment of time, people, and money.

Yet, unless you perform these fundamentals well, spending time and resources on secondary management processes like talent management, leadership, innovation and partnerships may provide some gain in the short-term, but will not result in sustainable long-term, organizational success.

David P. Tarantino, MD, MBA, is executive medical director of Shock Trauma Associates, P.A., a 50+ physician, multispecialty practice associated with the University of Maryland School of Medicine. In addition, he is the chief executive officer of The MD Consulting Group, LLC, a health care management consulting firm in Baltimore. He can be reached by phone at 410-328-2036 or by e-mail at [e-mail].

Reference

1. Nohria N, Joyce W, and Roberson B. "What Really Works." Harvard Business Review. July 2003.

By David P. Tarantino, MD, MBA

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