By early 2007, Birmingham, Alabama-based Baptist Health System (BHS) was facing significant systemic problems with its staff and management—problems that were creating tough-to-surmount financial repercussions. Alan Bradford, chief human resource officer at BHS, clearly recalls the difficulties the organization was facing: "The momentum of the system was not positive," he says. "Earnings from operations were nonexistent. Morale was not as good as it could be, and employee retention was as low as 65% to 75%."
Though Bradford says a number of factors contributed to the health system's postmillennial decline, he cites the economic downturn as the primary instigator. "It was a difficult time for the system," he says. "The economic problems that impacted the entire country hit Baptist a little earlier than they did other folks." Most concerning to Baptist's leadership was the shift in organizational priorities that attended the downturn in morale. "People were looking for other options," he says. "They had gotten away from focusing on the missions the health system was supposed to be all about."
Recommitment to Core ValuesThe turnaround at BHS began in February 2007, when Shane Spees assumed the CEO role. Spees began hiring a management team with the aim of implementing a new set of strategic goals for the health system; he brought Bradford into the BHS fold in August 2007. The new team's first order of business was to redefine the core values of the organization, with the ultimate aim of fostering more effective employee development. "Our mission is to administer to the needs of the individual patient in a faith-based arena," Bradford notes. "Fulfilling that mission is done through providing really high clinical quality of care—and the way you perpetuate that is through growth. That's what it's all about."
Bradford knew from prior experience in a faith-based system, however, that implementing a commitment to organizational values is easier said than done. "We had a set of mission values that everyone would agree are great things—but, for example, if you asked people three or four years ago, 'What does it mean to exhibit compassion in your job?' you would get 4,300 answers." As part of Spees' strategic vision, Bradford and team began by developing what he calls "behavioral anchors," which clearly defined what the health system meant when it called for employees to be compassionate, or to be advocates for the patients. "How we do our work is more important than what we do," he notes. "If we don't exhibit those mission values, we don't consider ourselves successful."
In the end, the core behaviors upon which Bradford and colleagues decided were integrity, compassion, advocacy, resourcefulness, and excellence—"ICARE" for short. "We have a detailed list of behaviors we expect for each value, and our employees are evaluated on that," he says. "It was a seminal body of work that sent us on the trajectory we're currently following."
Developing LeadersThe next step in BHS' turnaround began in early 2008, when Spees, Bradford, and the rest of the leadership team turned their focus to retraining managerial staff. "In the clinical world, we're very guilty of only promoting to management the folks with the best skills," Bradford notes. "But just because I'm the best shoemaker doesn't mean I know how to manage people who make shoes. We found we had a lot of managers who were not skilled at engaging and managing employees—and we had not laid out the expectation that that's how we wanted it."
Managers were given four full days of training focused on the engagement of their employees, and their evaluations were updated to include employee retention as an annual goal. Bradford explains, "A lot of folks would say that encourages managers not to terminate someone, but we weren't saying retention had to be 100%. Rather, we wanted a way to evaluate a manager's selection of employees, his or her training of those employees, and his or her mentoring skills. All of those things are reflecting in being able to appropriately manage retention."
But BHS' most striking innovation was its SuccesShare program—with the status of the term SuccesShare as a registered trademark underscoring its originality. SuccesShare works by incentivizing every employee system-wide to contemplate issues usually reserved for leadership, such as quarterly budgets and resource utilization. Each facility in the system is given a financial target every year, and for every two dollars by which it beats that target, a dollar is shared back with staff up to 40 hours of pay per employee. "We do quarterly updates on their progress," Bradford says. "When we kick off the year, we tell employees what they can do at their level to help beat the budget. From a strategic perspective, we see it as more of an engagement plan than an incentive plan. If we can engage our employees to think about how to affect growth and quality of care, that's worth gold."
Cultural ShiftOther factors contributed to BHS' renewed commitment to employee engagement and stronger enforcement of accountability. "We threw a lot of changes at our people in the first two years we were here," Bradford notes. "It was important for folks to understand that these changes were here to stay. With superficial changes, you might have 20-year employees thinking, 'This too shall pass.' Well, guess what? It hasn't passed."
Implementing the culture change took consistency and reinforcement, but most importantly, it took transparency, Bradford says. "We continue to build upon what we put in place in that first two years, all the structure and systems we put in," he says. "Now our employees are aware of our operating calendar. If we deviate from it, they want to know what's going on. Everyone says culture change starts at the top, and it's true: putting in very clear structures and systems with clear accountability will change your culture quickly. It sounds simple, but you have to stick to it."
BHS' operating calendar is "a best practice we learned," Bradford says. "It's a planning tool. It's widely distributed, and it's understood organization-wide that the dates are hard—all the people processes, performance reviews, employee engagement surveys, budget cycles and processes, strategic planning cycles and processes are on there. It's very transparent—it's nothing we hide."
In the three years following the implementation of these changes, BHS experienced a 115% improvement in annual net revenue and raised its staff retention rate to 86%; the organization realized more than $1.5 million in savings, and in 2010 was named one of Birmingham's best places to work for the second year in a row by the Birmingham Business Journal. Bradford sees these HR and financial advances as highly correlated; it was BHS' renewed commitment to organizational and leadership development, he says, that turned the health system's performance around.
"There are many different reasons for the revenue gains," he says. "From the retention perspective, you can take an employee's salary and multiply it by 1.5, and that's the cost for turning someone over—there's a huge savings there. But more importantly, with better employee engagement you get continuity, better quality of care, more efficiency. There are a lot of tangible savings, but the intangibles are just as important."
