Joseph Cabral, Senior Vice President and Chief Human Resources Officer at North Shore-LIJ Health System, sat down with Beth Thornton, Executive Vice President of Sales at O.C. Tanner, to discuss the changing role of HR in the healthcare industry, how to develop strong leaders, and the importance of aligning employee performance with organizational goals.
JOSEPH CABRAL: It's an interesting road that led me to where I am today. When I graduated from high school, the last thing on my mind was becoming an HR executive. I joined the military, served four years of active duty, a couple of years in the National Guard, and then went to college and earned an undergraduate degree, followed by a graduate degree in quality systems management. After selling a staffing company that I helped to start, I began working for Children's Hospital in Boston, helping the hospital re-engineer its revenue process and understand how that affected its existing workforce. That was my entry into both healthcare and HR. I also taught Human Resources Management as an adjunct professor at the University of Massachusetts in Boston for a few years.
While I was at Children's Hospital, I was recruited to work at New York Presbyterian Hospital, which was going through a major transformation. Shortly thereafter, I was recruited by North Shore-LIJ Health System, which at the time was a $2 billion healthcare system with about 22,000 employees. Since then, we've more than doubled; today, we are a $7 billion organization with close to 46,000 employees. Our CEO absolutely understands that our workforce is our competitive advantage. Because he believes in that, my job is twice as hard because I have to turn that into a reality.
I knew that joining an organization that was going through an incredible transformation would allow me to stretch and grow in a way that I hadn't before. The synergy and chemistry between CEO Michael Dowling's vision and what HR could do for the organization—not necessarily following the traditional transactional HR model but being more of a strategic business partner—really appealed to me.
Parts of the organization have embraced the changes and thrived and others have not. I learned early on to go with the early adopters, for example, those who want to improve patients' stat scores, obtain a greater reimbursement rate based on patient satisfaction responses, or increase revenue. In healthcare, you can't tweak the outcome without focusing on your workforce. In the manufacturing world, if you create a mousetrap and the mousetrap doesn't work, you can tweak the assembly line to develop a better product. In healthcare, if you're not achieving the quality of patient care that you're looking for, you have to focus on your workforce to get a better outcome. You have to develop, educate, and coach the staff. That's our job in HR.
We offer a spectrum of care at our hospitals, medical facilities, research institute, and medical school. HR has transitioned from a transactional model and automated many services. We've centralized functions and created an employee self-service system. However, when we conducted a study of our self-service offerings, we saw mixed results. When we benchmarked ourselves against other healthcare institutions, we were at the top of the list in terms of employee self-service options. But when we compared ourselves to Fortune 50 or 100 companies, we came in almost dead last.
As a result, our goal this year is to move into what I'm calling 'self-service 2.0,' which is less about the technology and more about process re-engineering and empowering the workforce. We need to focus on frontline leadership development, providing just-in-time coaching and feedback, and having crucial conversations not only with managers and leaders but also with employees. That's what's going to drive our organization forward. We need to help people become better leaders. This is going to be a huge cultural shift.
Healthcare traditionally is about 10 years behind other industries because there wasn't a sense of urgency to change. Over the past five years, healthcare has started to focus on quality outcomes. Payers now are saying, 'Why should I pay one hospital $300 for a procedure when I can pay another hospital or ambulatory setting $100 to do the same procedure in less time, more efficiently, and with better outcomes? I'm going to start directing anyone that I insure to go to that facility.' Pay-for-performance has really driven health systems or hospitals to change the way that they do business.
The public also is becoming more informed. As a result, we've become more transparent. North Shore-LIJ was one of the first healthcare organizations in New York state to publish our quality outcomes online, even before we were required to do so, and that action forced our hospitals to improve. To survive, the healthcare industry needs to provide a continuum of care cost effectively, along with incredible service and the right outcomes.
We're also diversifying our portfolio, bringing on businesses that are not core to what we do today. We've partnered with a company and plan to create an insurance company. We estimate that over the next three to five years, we'll be a $10 billion company instead of a $7 billion company.
HR is going to be responsible for three key elements in the future: the organization's leadership gene pool, the culture, and innovative change management. HR will not be able to support these new initiatives if we don't understand them, so people who work in HR need to have business acumen first. We then have to be good leaders. Third, we need to have technical skills. These personal attributes need to be acquired in that order, because if you don't understand the business in which you work, you can't contribute. If you can't lead, no matter how strong your technical skills are, you're not going to be successful.
Workforce analytics or big data will play a large role in determining how HR will contribute. If you look at organizations in any other industry today, they can tell you the productivity level of any employee who answers the phones. For example, if a company has a call center, it knows that peak call times are from 10 a.m. to 2 p.m., which allows the organization to staff the center appropriately to deal with customer needs and provide the best service at the right time in the most cost-effective way.
In healthcare, we have not been as aggressive in developing metrics because we used to get paid for our services regardless. If a patient needs to get his appendix out, the healthcare institution is going to get paid no matter what. Today at North Shore-LIJ, we measure quality, patient satisfaction, and financial performance. We're using the data that's available and learning from other industries to develop metrics around these three areas. I'll give you an example. As an organization, 75 percent of our workforce works full-time, 20 percent work part-time, and 5 percent are per diem. Can we deliver a better service that allows us greater flexibility if we have 65 percent of our staff work full-time and 30 percent part-time? These are areas that traditionally we have not examined.
We have more data available to us now than we did in the past. We recently invested $400 million in IT infrastructure to implement electronic medical records and are in the process of rolling that project out. That electronic database will give us the ability to drill down into specific fields to evaluate, assess, determine, and diagnose—all at our fingertips. Technology is going to help us improve quality and become more efficient.
Our CEO absolutely understands that it's all about the talent. In 2002, he wrote a white paper about building a corporate university in healthcare, before anyone was even thinking about doing that. We visited GE's Crotonville campus and modeled our corporate university after that. Michael's goal at the time was leadership development. What we're looking for in our future leaders is the ability to create an agile organization. A leader has to be comfortable with change and has to be a role model for others.
Five years ago, we built a high-potential program for emerging leaders, team leaders, operational leaders, and strategy leaders. About 80 percent of participants in that program have either been promoted and/or changed jobs; we have a 96 percent retention rate with this particular group. We've done a lot of work around aligning our workforce with organizational goals of quality, patient experience, and financial performance. We also measure these three areas on performance reviews. Over the past four or five years, all three areas have moved in the right direction. Even when we acquired hospitals that had not been doing well financially, we exceeded our financial projections because we were able to align our workforce with where we wanted them to go. We offer multiple tools and opportunities, such as blogs and a CEO chat, that allow employees to communicate with the CEO. Starting this month, as well as in February and March, as part of cascading the goals, our CEO and COO are conducting town hall meetings across the system to talk about the organization's goals and vision for the next year.
In addition, every new hire at North Shore-LIJ starts on a Monday and participates in our Beginnings orientation. Our CEO attends these orientations and spends several hours talking to new employees, sharing his passion and goals for the organization. Listening to Michael speak is one of the orientation's highest-rated sessions. He's a dynamic leader and every employee who attends those sessions leaves believing that they have a personal connection to the CEO.
It's all about our workforce. The first thing that our CEO did when he received that award was to thank all of our employees for everything that they've done, because without them, we would not have been able to receive that award. The National Quality Award is not an easy award to earn. Oftentimes, especially for large systems like ours, you have to be hitting all cylinders all at once around quality to get recognized. We've implemented numerous quality-focused programs, from team steps to collaborative councils. We've worked really hard at it and it was a huge honor to be recognized given the size of our institution.
Michael has always felt that it is his job to create leaders. He consistently talks about creating potential, and over the last four years we've fine-tuned our high-potential leadership program. We created a similar, more intense program for physicians to help them become great leaders.
The high-potential program came about as a result of our growth trajectory due to our acquisitions. It was a business imperative to develop leaders. We didn't have a strong bench and we wanted to be able to groom and stretch some of our leaders. We had more than 100 individuals participate in the first class and 135 participants in the second. Since then, we've limited enrollment to about 80 because we are able to provide better one-on-one coaching.
We learned and designed best practices from great organizations. DDI had done some work in this space and we modified their model to meet our needs. In essence, the program identifies emerging leaders, folks who have never led before but who have a fire in their belly. We have team leaders who lead small groups, as well as operational leaders and strategic leaders.
Another organization at the forefront of managing their high-potential pool is Johnson & Johnson, which developed an elaborate website for their high potentials. We visited the company and, with their permission, built a similar portal for our high potentials. Today, our executives can access the portal to search for information about the 500 people who have either gone through our high-potential program or are currently in it. Executives can't reach out to these employees directly but they can contact HR if they want to interview or hire anyone.
We're very competitive in this area. We sponsor appreciation dinners, recognition ceremonies, and numerous employee-related events—everything from Employee Appreciation Week to Nurse's Week to holiday parties. In some of our facilities, we offer a points program that allows employees to earn points based on recognition for going above and beyond. We also recognize employee anniversaries. In addition to these typical employee recognition programs, we give out an annual President's Award, which was created in 2007 by Michael Dowling, president and CEO, to honor employees for their extraordinary performance. There are three award categories: Exceptional Patient Experience, Innovation, and Teamwork. The Exceptional Patient Experience award recognizes the extraordinary and selfless efforts of one individual to deliver service of the highest caliber, ensuring that the North Shore-LIJ Health System exceeds expectations of the patients and communities it serves. The Innovation award honors an individual or team whose entrepreneurial initiative has demonstrated an innovative way of thinking. This award recognizes the efforts of a new process, program, initiative, or business that has significantly affected one of the organization's primary success indicators. The award for Teamwork recognizes a team whose efforts supported the organization's goals of quality, the patient experience, and/or financial performance. The team has collaborated toward a common goal and contributed to the success of the organization.
All these programs are great, but our frontline leaders are encouraged to do more in terms of personal recognition. Being recognized for five years of service and receiving a letter from the CEO is nice, but when your boss hands you four movie tickets and encourages you to spend time with your family because you had to work overtime for two weeks, that's more important to you. Educating frontline leaders to understand the value of employee recognition and recognizing individuals for who they are is more valuable than almost any other effort.
Joseph Cabral is the Senior Vice President and Chief Human Resources Officer for the North Shore-LIJ Health System. The organization has an annual operating budget of more than $7 billion and a workforce composed of more than 45,000 employees, making it one of the largest healthcare systems in the country, with 16 hospitals, several long-term care facilities, an internationally recognized medical research institute, and New York state's first new allopathic medical school in more than 40 years, the Hofstra North Shore-LIJ School of Medicine.
With more than 19 years of experience developing and executing strategies that enhance cultural and organizational change, he has spent the past seven years driving the health system's business objectives, vision, and values forward in all aspects of talent management and human resources operations in order to achieve the organization's goals.
Mr. Cabral has held key HR leadership roles at New York Presbyterian Hospital and Children's Hospital in Boston, MA, and has been cited by Time Magazine, Business Week, The Wall Street Journal, New York Times, Forbes, and other industry publications for his expertise in “Best Practices” in human resources. In 2009, he accepted, on behalf of North Shore-LIJ Health System, the Taleo Customer Innovation Award for creating a strategic, efficient talent management process that has helped the organization achieve its operational financial goals. He holds an M.S. in Quality Systems Management. He has taught as an adjunct professor in Human Resources Management at the University of Massachusetts. He also served as a Baldrige Examiner and serves as a trustee for one of the largest Taft-Hartley Pension Plans in the country. Additionally, he was appointed by the Governor of New York to serve on the Regional Economic Development Council.
Celebrate people and appreciate great work—that's her creed. Beth Thornton, O.C. Tanner's Executive Vice President of Sales, has advised Fortune 100 companies and executives throughout the U.S. on both for close to 19 years. Before joining the executive team, Beth spearheaded O.C. Tanner's sales efforts in the Southeastern U.S. states. Now, she leads a sales team that’s 100-strong, helping them make recognition a strategic tool that drives employee engagement and delivers to the bottom line. She knows that only happens when recognition is done right. Beth graduated from Florida State University with a degree in Communications.
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