Hospital Leadership is a Culture Not a Person

November 17, 2011

As the healthcare environment changes, hospital leadership must realign their organizations, especially as the healthcare sector prepares for reform and other changes coming in the next few years. Bill Carpenter, chairman and CEO of Brentwood, Tenn.-based LifePoint Hospitals, which owns and operates 54 hospitals in 18 states, thinks that for a hospital to succeed, its leaders must be willing to invest heavily in other people and a positive culture. And it’s up to the CEO to listen and respond to its constituents’ ideas to enact an organization-wide strategy.


Here, Mr. Carpenter also shares his thoughts on how his current tenure at LifePoint has influenced his leadership skills, how other hospitals can develop their own leaders and some challenges associated with for-profit hospital operations.


Q: What leadership traits have you acquired throughout your career at LifePoint, and how have they affected you today?


Bill Carpenter: I don’t believe that any leader has it all. I don’t think any single leader can make an organization successful on his or her own. I think leaders have to surround themselves with talented people in order to be successful and for the organization to be successful. The primary responsibility of a CEO is to establish a culture and strategy that will guide an organization through a period of time. Great leaders help other people understand what their role is, what their contributions are and help keep them focused on the key things that are going to make a difference for the organization. Those are some of things that I’ve learned.


At LifePoint, shortly after I became CEO, we embarked on a strategic planning process to set up the direction of the company for the next five years. We made sure that we had a thorough process and that our organization had a chance to buy into the direction we were setting. Then we worked hard to let people know how their specific work adds value to the organization and how they specifically fit into the overall strategy.


We created strategies for each of our hospitals designed around recruiting the right physicians in the community, establishing new services lines that had not previously been provided in the community and making appropriate capital investments in the hospital to allow physicians to provide care under theses new service lines. Another part of our strategy was to continue to enhance quality care. This aspect ties directly into our focus on growth. People in communities want to know their hospital is a good choice, so we have strategies around physician engagement in order to work with physicians to enhance clinical outcomes for patients at each of our hospitals throughout the organization. We also have strategies around operational excellence. Under healthcare reform, hospital organizations have to get more efficient. And so we have worked with our hospitals to create better processes that we believe will allow us to be more efficient and improve quality of care.


Q: Are there certain ways that LifePoint develops leaders or leadership principles that other organizations can try to emulate?


BC: We have a leadership development program in place to allow people to become the best they can be. Developing key leaders throughout the organization to implement our strategies is very important to LifePoint. The leadership development program starts with each individual having a plan — that’s the key. Leadership development is so important, particularly in a company with hospitals in smaller communities around the country. We have to identify leaders for our community hospitals who first of all want to live in a small town and who also show leadership potential. Then we can help them achieve whatever goal they have for themselves, but it all starts with a plan.


At LifePoint, many of our hospital C-suite leaders were identified during the succession planning process and have participated in our leadership development programs, which prepared them for the leadership positions they now hold. We have many examples of hospitals leaders who were identified as potential leaders of the future of the company. We have worked with them to develop a plan for their leadership development, and today they serve in roles including CEOs, COOs, CNOs and CFOs of LifePoint hospitals, and that’s an exciting thing for me.


Our leadership model involves basic personal mastery skills, business mastery skills and relationship mastery skills, and those include the basic values of the company grounded in things that you would expect: compassion, respect, trust, integrity, honesty, ethical behavior. Those are important. We also look for leaders who can relate well with others and who people want to follow.


Q: What challenges or mistakes have made your leadership stronger over the years?


BC: I do know that I try to learn from my mistakes. I’ve made plenty of mistakes; we all do. I think it’s important for leaders to admit when they make mistakes.


Frankly, I think we ought to be more tolerant of our leaders when they make mistakes. Sometimes, I think if you don’t make mistakes, you may not be trying hard enough. When you do big things and try big things, sometimes you’re going to make a mistake. I love leaders who bring ideas to the table, even if [the ideas] don’t work all the time, and that’s what makes us better. Great ideas make us better.


We certainly learned from our mistakes in the past. One thing we’ve done that is innovative, with regard to the way we acquire hospitals, is we have developed a transition services division, which involves our operations teams in the full scope of the acquisition process. Our transition services team is involved in all aspects of due diligence, strategic planning and integration of a newly acquired hospital, and then that team is responsible for the operations of the hospital for the first few years of LifePoint’s ownership. We started this approach in order to make sure there is not any miscommunication between the people who are doing the deal and the people who are operating the hospital after the closing. We decided to give this approach a try after we saw that we could improve the handoff of newly acquired hospitals. This process allows us to build trust with the partner early on, as they have the opportunity to spend more time with the people who are responsible for operating the hospital after closing.


A while ago, we were involved in the acquisition of a community hospital where we were not able to be involved with broader communication during the process for that acquisition. When the transaction was announced, the community was upset that the hospital was being sold. They didn’t understand the hospital’s financial and operational pressure. To them their community asset was being sold, and they hadn’t had the opportunity to get to know us. I’ve learned that we should be involved in communications with all key constituency groups early in the process. We need to be involved at a deeper level with physicians and the community just to make sure everyone is on the same page. That was certainly a lesson-learned and resulted in the formation of that transition services division.


Q: What are some of the key concepts of hospital leadership you know now that you wish you knew when you first became CEO?


BC: I wish I had understood sooner the power of the title. That may sound a little strange, but after becoming the CEO of LifePoint, even though I was one of the founding employees of the company, I realized that I had to be very thoughtful about what I said to people in the organization. They viewed the CEO — even though I was the same person they had known for several years — in a different way. When I spoke, people listened in a different way, and they responded in a different way by putting whatever I said into action. That was something I learned pretty quickly but wish I had known immediately.


I also learned the importance of strategic communication. It is very important for my messages to be tied to the company’s messages because it can be confusing to people if they hear the CEO or their leadership speaking in a way that may seem inconsistent with the direction that had been previously set.


Q: Do you think different leadership qualities are necessary at for-profit hospital enterprises like LifePoint?


BC: Leadership is leadership, whether you lead a for-profit or not-for-profit organization. Good leaders think strategically and make decisions based on effective strategies. I don’t think there’s much difference. Both types of organizations must create a return-on-investment for the hospital in order to remain viable and to accomplish their mission.


As a publicly traded company, we have an additional constituency group to consider — the stockholders of the company to whom we are responsible. I think it’s important for leaders of for-profit companies to be very clear with stockholders about what the company’s goals are, what our expectations are and how we expect to achieve our stated financial goals. I think it’s very important for leaders of for-profit organizations to convey that following a strategic plan — in our case, our focus is on quality, growth, operational excellence and developing key future leaders — will achieve the desired results.
A lot of this revolves around good, straightforward communication, whether you’re talking to employees, community members, physicians or investors.


Q: Healthcare reform and changes within the sector, such as value-based purchasing and bundled payments, have spread rapidly. How do you and other leaders within LifePoint manage the mass influx of change within the broader context of your organization?


BC: Hospitals around the country are looking to their leadership for solutions to the types of changes you described — value-based purchasing, readmissions, bundled payments and the many other changes that face hospitals these days. It’s one of the reasons many community hospitals are looking for the shelter of a system because they don’t want to be in the position of all this massive change on their own. And so at LifePoint, we’re working to develop plans to deal with each of these things. Focusing on value-based purchasing and hospital readmissions fits very nicely with our strategic plan on improving quality care and documenting care so that we can be appropriately paid for the care we deliver. We have to get more efficient in the future, and we have to be able to prove that we are providing high-quality patient care.


I do think leaders in the healthcare sector have a great responsibility today to help our organizations stay focused on the key things that can make a difference. This is a time of great change when distractions are easy to come by. Keeping our organizations focused on the key things that will make a difference on long-term success is critically important to what we’re trying to do.