Abstract:
This article points out that the administrative leader has been hired to manage or run a family business; these organizations are owned by physicians, and they are not only their businesses, but also their life. It discusses the meaning of good concise communications, with a strict no surprises policy, as well as how being willing to adapt rather than adopting solutions will better ensure success. The board of directors should never be seen as people you dread being around. If you do view them in such a manner, it will only be a matter of time until they begin to act in accordance with your worst fears.
It is important for a Chief Administrative Officer and the board of directors of a physician group practice to understand and appreciate their distinct roles. In the best of worlds, the board governs, and the top management person—the Chief Executive Officer/Executive Director—manages the group.(1) However, in the business of medicine, where the owners (i.e., the board of directors) also work seeing patients every day, therefore interacting with staff, the distinction between managing operations and governance is not clearcut.
In this article, I share my insight from having been both an Executive Director and a CEO in large physician group settings over my more than 40 years in the business of medicine. My last posting before I retired in 2012 was as CEO of a large orthopedic group in upstate New York. It was both a private physician’s group practice and the academic group connected to the only Level One medical center within 100 miles, a unique situation.
During my 12-year tenure, the practice doubled in size and scope: from 16 physicians to 33; from three satellite offices to seven; from four operating rooms to six. It also added an MRI center. It was an exciting time, although the transition was not easy, at least for the first few months.
By 2000, this private practice physician’s group had been around for almost five decades. It began as a typical loose association of four orthopedic surgeons practicing together. When I arrived, the board still governed like a small group, even though it now consisted of 16 physicians. There was almost no organizational structure, and the board of directors not only made all decisions, which is understandable, but they also discussed each and every detail, which meant board meetings lasted for hours.
Each physician’s practice is a family business with its own culture.
At a conference, I once heard it stated that the most difficult periods in a private physician group’s practice growth was between 12 and 20 members, which I now know to be true. It took a while for the group to be willing to form committees and for members to agree to trust colleagues to discuss various operational aspects of the group (e.g., human resources, finance, IT) and then bring their recommendations to the board for action. Some private practice groups form an Executive Committee, which is given the authority to make decisions about operational changes and purchasing assets up to a certain level rather than having every issue decided or even discussed at the board level. Board meetings are then used basically for strategic planning.
To Those New to the Business of Medicine
Certain basic concepts specific to managing a physician organization must be understood. The most important of these is that each physician group practice not only belongs to that physician or group of physicians—it is their life.
Each physician’s practice is a family business with its own culture. This culture evolved from the makeup of geography, service mix, patient demographics, and, most importantly, the physicians’ practice art style, which typically comes from their individual personalities.
Physicians are among the brightest minds you will find. Think back to high school, or your undergraduate work, and I suspect you will recall that those classmates who went into medicine were some of the most intelligent people you knew. Why bring this up? Because when you put a dozen or more of these minds in a room and ask them to govern as a group, it becomes almost comical. Remember that to become physicians they were trained to act alone: “See one; do one; teach one.”
Consider that these brilliant people were taught to function alone; went to different high schools from various cities and towns across the country; and attended different undergraduate colleges and universities, and most probably different medical schools and internships. Now they are in a boardroom and asked to govern collectively, as a single group.
Add to this the complicating factor that each has a different personality. You might think that they all have “type A” personalities. However, this is not the case. Of course, some definitely qualify as type A, but there are just as many who simply wish to practice the science of medicine and truly have no interest in having anything to do with the details of running or managing their business (i.e., human relations, finance, operations). Combining all of these factors could end up as an unpleasant surprise for someone new to the role of CEO.(2)
Build Personal Relationships
It is helpful to build a relationship on a personal level with as many board members as possible, and to get to know each of the owners’ strengths, weaknesses, fears, and aspirations. It is human nature to go the extra mile for people we like.(3) However, keep in mind that the board did not hire a top management person (i.e., CEO or ED) to become friends with any physician or staff. He or she was hired to manage the family business, and will not be invited to Thanksgiving dinner.
The transition from one administrative leader to another can take time. The board will not know what this new person can do; they only remember the previous person. It is fairly common for a group to fire their top management person because they lost trust, which means the one coming in must build trust from scratch—and that often takes several months. It can be a frustrating time, but acquiring their trust obviously is necessary for success. It also is helpful to learn what happened with the last management person and what changes the board is looking for going forward.(4)
If the physicians in your group have had the experience of training interns, many probably used the technique of asking them questions to see whether they would make up an answer if they were not sure how they should answer. They might use the same technique with you as a way to test your knowledge and integrity.
It is important never to lie; do not even guess.
This might sound elementary but it is important never to lie; do not even guess.(5) As a new CEO, still in the transition period and not yet familiar with all the details of the group, you might not wish to say, “I don’t know” and be thought the village idiot, so you guess at the answer. If you do, be sure that they know you are guessing by saying, “I believe . . .” or “I think . . .” and then end with, “I will find the real answer and get back to you . . .” with a definite date or timeline.
Change Agent
Many who are the top management person in any organization are called upon to be a change agent. I was a management consultant for 10 years, with over 600 clients in 13 states, and learned to be a successful change agent. The key was to be willing to adapt rather than adopt potential solutions to match the organization’s culture. Altering a strategy to accommodate an organization’s internal culture could mean the difference between success and failure when needed changes in policies or procedures are being instituted.
Understand that the board is made up of scientists, and they most likely have different needs for level of detail. Some will want as much detail as you can provide, and want to see all the numbers. Others will only want the 30,000-thousand-foot view and prefer visual aids. Some will want a paper in their hand, while others want to see it on their iPhone.
It can be very helpful to develop a set of “dashboard” type reports presenting an agreed-upon set of indicators each month. This allows the board to quickly grasp the practice’s overall performance, as well as determining what area to focus the group’s resources on going forward.(6) These might show information such as patient visits, total receipts, and average income per unique patient, for example.
In all cases, give them the information at least one day before the meeting, if not a couple of days. If the meeting is scheduled for Monday, it would be wise to put the agendas and reports out on Friday afternoon so the board would have the weekend to peruse what is going to be addressed.
When presenting new ideas, especially if they represent a change in culture, it is best to test the idea or concept with various board members in advance to see if one or more might help and be a champion before the issue goes on the agenda.(7) If there is not at least one board member who will support the issue, you should seriously consider not attempting to push it, at least for the time being.
Spending Political Collateral
Sometimes there will be issues that will require you to spend some political collateral to get passed. You will be willing to do so because you believe it is imperative for the wellbeing of the group. Just pick your battles carefully. Someone once told me that you start with a bowl of chits and they are never replaced; once spent, they are gone.
When you get requests for information from board members, regardless whether it was your first priority or not, you must respond in a timely and courteous manner. It is often said about the corporate world that a CEO works at the pleasure of the board of directors. Well, in a physician’s group, these are the people who hired you, and they can fire you.
A follow-up to this is that when you disagree with a recommendation or suggestion, you should not ignore it or drag your feet. It is important to explain why you disagree, but you must also be sure that the board understands that you will do everything you can to successfully implement their final decision . . . again, this is a physician’s private group practice, and, therefore, it is their company that you are running for them.
Clear Concise Communication
Get in the habit of regular communication via e-mail, phone calls, or face-to-face meetings, at a time interval that suits everybody. Some members expect to be dealt with in person as a sign of their special status. Others prefer more impersonal communication. It is best to keep messages concise.(8) In all cases, surprises are not good. Be sure that all board members are made aware of activity that is potentially troublesome to the group as a whole, and as soon as is possible.
You should be open to guidance and direction from the board. If you are receptive, there is much that members can and will offer that will help you and the practice to be successful. Board members can be your best allies(9); they will bring ideas, encouragement, and often enthusiasm. It can be really helpful to tap into their knowledge and networks, especially if you happen to be new to the area.
Your relationship with the board of directors will be complicated by the fact that while, on the one hand, they are treating patients, on the other, they are also employees. Just like the rest of the staff, they must abide by policy and protocols voted by the board as a whole. So unless it is a solo practice, no individual physician can make policy on the fly, or change protocols to fit his or her practice art style without the approval of the board as a whole. Trust me, there will come a time when one of the board members will walk into your office and tell you that one of your responsibilities is to protect the rest of them from one of them . . .
It is your job to present solutions to problems you are encountering when dealing with the board.
Although it is important that the board should have open access to the staff on many different levels, when members of the board roam around the organization taking staff’s time, or changing their priorities, you should step in.(10) Very politely make it clear, in a private setting, that you were hired by the board as a whole to manage the group; that by their violating the chain of command, it puts the staff in a real dilemma as to how to respond. You might ask what prompted them to wander around in the first place, and be sure to tell them that you would be happy to provide them with whatever information they seek.
For the most part, when dealing with the board, it is your job to present solutions to problems you encounter. It is not a good idea to toss a problem onto the table just to get the board’s reaction. It is quite possible that they might get the impression they hired the wrong person if you do this too often.
Try not to lose control of board meetings. There are times when an open discussion is helpful because the board of directors are colleagues, and that might be the first or only opportunity they have had to talk about a patient care issue. Just try to get back to the agenda as soon as possible.
Tell the Board What You Need
Be sure to tell the board what you need to be successful.(5) In most cases, if you have put the group practice first, the board will want to give you the tools, resources, and support to ensure your success. Too many leaders simply do not ask their board what they need. There should be an honest dialogue between the leader and board about anything related to the leader’s ability to perform at the optimal level. Also, if their answer is no, it might mean that you need to give them more detail, or more time.
Having said that, “when a board of directors considers the performance of a CEO, the evaluation will often be influenced more by the perceived value of the individual the board is evaluating than actual results.”(11) Said differently, it has been my experience as a consultant and group practice leader, if the board gets to the point of them thinking “Gee, I wonder . . . ,” you need to learn what the issue is as quickly as you can to at least try to take corrective action.
Conclusion
You should never see the board of directors as people you dread being around. If you find yourself viewing them in that manner, it will only be a matter of time until they begin to act in accordance with your worst fears. The goal should be to develop a relationship based on trust, competence, and mutual respect. It is a wise investment of time, energy, and social capital to pay attention to the needs and desires of those who can choose to terminate your employment.
The best way to succeed as CEO or ED of any size physician group practice is to always focus on that group practice’s success as a whole.(10) That will always be what the board of directors cares about the most.
References
The Executive Director and Board Relationship. Minnesota Council of Nonprofits. www.minnesotanonprofits.org/nonprofit-resources/leadership-governance/board-basics/the-executive-director-and-board-relationship . Accessed October 13, 2016.
Porter ME, Lorsch JW, Nohria N. Seven surprises for new CEOs. Harvard Business Review. October 2004. hbr.org/2004/10/seven-surprises-for-new-ceos . Accessed October 16, 2016
Essential elements of an effective CEO-board relationship. Russell Reynolds Associates. September 28, 2014. www.russellreynolds.com/insights/thought-leadership/essential-elements-of-an-effective-ceo-board-relationship . Accessed October 13, 2016.
Wajnert T, Miles SA. Advice to a new CEO: how to handle your board. Forbes. November 12, 2009. www.forbes.com/2009/11/12/ceo-board-relations-leadership-ceonetwork-managing.html. Accessed October 16, 2016.
Capozzi R. Twenty tips for working with your board. The Nonprofit Partnership. 2013. www.thenonprofitpartnership.org/files/rick-capozzi-20-tips.pdf. Accessed October 13, 2016.
Wallace L. Ten strategies to make your board of directors more effective. Vistage. October 13, 2014. www.vistage.com/resource/ten-strategies-to-make-your-board-of-directors-more-effective/ . Accessed October 16, 2016.
Myatt M. Managing the board – 10 things every CEO should know. NHub. 2016. http://hub.n2growth.com/managing-board-relations/ . Accessed October 13, 2016.
Palker MP. 5 Tips to effectively communicate with your board of directors. Business Insider. October 23, 2015. www.businessinsider.com/5-tips-to-effectively-communicate-with-your-board-of-directors-2015-10 . Accessed October 16, 2016.
Tips for working effectively with your board. State Library of Iowa. www.statelibraryofiowa.org/ld/k-p/new-lib-dir-man/board-director/tips . Accessed October 16, 2016.
Finocchio R. 14 Rules for managing a board of directors. Advanced Technology Ventures. 2008. www.atvcapital.com/technology-blog/managing-a-board-of-directors . Accessed October 16, 2016.
Bennington WJ, Brett M. Managing your board: tips and tactics for CEOs. Development Resource Group. June 2009. www.drgnyc.com/list_serve/June_2009.htm. Accessed October 1, 2016.
Topics
Governance
People Management
Influence
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