Most forces in healthcare today drive standardization of operations:  Joint Commission, Managed Care companies/contracts, CMS, etc. Any healthcare reform will only emphasize this more. Assuming you have been doing cost containment for years, there are two competitive advantages you have as an organization:  One is the creation of new revenue (physician recruitment, program development, better payor contracts). The other is the “Maximization of your Human System”.  You can do a little about the former, but are the architect and catalyst for the latter. 

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Ask yourself:  Are you more, or less than “average”?

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Foundational theory:  There is a competitive advantage that you are responsible for:  it is the Maximization of YOUR Human System. 

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Distinction:  “Human resource management” and “maximizing your human system” are not synonymous. One is a “managing” mindset, the other, “strategic.” If hospitals were manufacturing plants (people being the machines), what do you do to make sure you have the very best well maintained and efficient machines?

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I have seen pieces of HR done with the wrong emphasis or in the wrong order.  I’m not saying that wrong things were being done; just that maximizing was not accomplished.  That’s what we are about here. One of my goals is that you question your success and reevaluate it continually.  Re-invention is the essence of innovation and excellence.  I will challenge you.

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Steven Covey puts it this way, "The enemy of the 'best' is the 'good'."  

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"Good is good enough until you know what better is; then good enough just isn’t good enough anymore.”---Don Rottman, 6/6/01 (That will twist your tongue and bend your mind. I call it mental yoga.)

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 Do you think there are people who don’t want to know what better is?   Seems silly doesn’t it?   Ever seen this behavior though? I see it all the time.   

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“Don’t make me change, my comfort zone has been pretty comfortable for the last 10 years, why isn’t it good enough today?”  

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“We’ve always done it this way.”

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 From your experiences, I’m sure you could share dozens of your own examples.  

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 Here is the jugular question:  Are you one of “those” people?  Are you part of what I call the:

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  “Everyone is above average phenomenon”

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Below is a standard distribution curve.  (I know, a flashback to a statistics course and your reaching for the Rolaids/Aspirin as we speak.) 

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As a quick refresher, remember that zero represents the 50th percentile, or average; 70% fall between  -1 and +1 standard deviation (a unit of measure in stats), 84% are below +1 standard deviation.  Do you feel the migraine coming? I bet you didn’t know I was bi-lingual in “Confusionese”. I’ll start talking English again. 

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Stop and take a moment.  I want you to or score yourself in terms of the curve at some percentile.  Where, relative to your peers in the industry and your competition, do you fall on this “map”? 

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Where did you score yourself? 60th, 70th, 80th percentile?  How many people do you think just scored themselves below average?  Guess what, by definition, ½ ARE below average.  BOOM: big gap in reality!  But that’s them, not you, right?  Can you articulate the tangible, identifiable things you do that are more-better-different than your peers and competitors; things to validate whatever margin above average you scored? 

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Consider that curve a composite.  Now lets separate some of the components of human resources.  We will use two categories; mechanical to represent things with relatively high standardization; variable to represent those things that have more flexibility/changeability.  (I know there are gray areas, you can change my list any way you like.)

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  Mechanical                                                                    Variable

Joint Commission                                                        Training & development

State & federal regulations                                          Culture cultivation

Compensation                                                               Motivation

Benefit plans                                                                  Recruitment

Labor relations/contract compliance                          Selection

Policy & procedures                                                       Retention

Recruitment                                                                   Employee relations

Selection

 

Below are  more curves:  The red curve is a standard distribution.

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The green curve has high kurtosis. (I threw that in for those that didn’t think I knew the technical term for it.  No, you can’t get a vaccination against kurtosis.)  Basically, the applicable meaning is that there is much less that distinguishes someone who is at the 40th percentile from those at the 60th percentile.  (What’s really cool is when you work to create a quantifiable value to that variance.)

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With the blue curve, low kurtosis, there is a wider variance between those at the 40th vs. 60th percentile.  Therefore, with a greater difference,  (difference does equal value).

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The green curve represents the mechanical things, standardized things.  I put compensation and benefits in here because you are forced to be very similar to your competitors.  Most variation here is in inter, not intra-market.

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The blue curve therefore represents the variable things.

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Back to English.  Here’s the application:

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When you look for ways to set yourself apart, to gain an advantage competitive advantage (maximizing or saving $), spend time on those things that have a higher opportunity for differentiation.  Don’t put your creativity into meeting state regulations or meeting OSHA guidelines, you won’t see much of a difference. Spend it on retention strategies, developing your culture, developing your people.  Not that the mechanical things don’t require your time, but understand the value of the variable things.  Many people spend all their time on the things in that “mechanical” column and don’t get time do work on the “variable” things.

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With things that are standardized, you can only loose, not gain much ground.   (Don't tempt me, I'll put in a curve that is skewed)  Competitively, if you are not in compliance, you fall down the curve.  Compliance scores an “average” on the curve.

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 The variable things give you the greatest opportunities to excel and create organizational value and competitive advantage: recruitment, selection, training and development, culture development, and retention.  These are the things that are people oriented to0.    It is by developing the variable things, that when you go back to the first curve (a combination of #1 and #2), you will be able to have confidence in setting yourself apart and able to articulate why you are better.

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Now do you want to take the whole organization up another notch?  Individually take this model to those you manage.  Have him/her tell you why they are above average.  Use the other two curves to explain the impact and value of variation.   Use the logic to sell others on the value of your initiatives.   Use it as a decision support model. 

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Free Critical point:  Though turnover cost doesn’t have a line item on the balance sheet, it is very real.  This may be the only way to sell “theoretical” spending: things that build morale, culture, retention, development, etc.  

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Did you notice that recruitment and selection were in both columns?  Several things could possibly go in both.   You may have a traditional, standardized function or you may have a more progressive one.  Recruitment and selection are handled mechanically in some organizations, strategically in others (be careful about which one you put yours in).

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In summary:  Are you above average?  Know how and why you are.  Most don't realize that strategic human resources, especially the variable "soft" dynamics are foundational to maximizing your human system.  You may have to adjust your vision to both understand and see the financial value in these things because they are not direct line items on your financials....but they are VERY real.  Many of them don't cost more $.  Valuing people is free, its a way of being.  Creating a culture that is positive, that says "I care" is free.  We'll talk about other things down the road that can make a real difference. 

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Good news, I have more models.....next time.

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Choose to make it a great day!

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Don Rottman, HR Evangelist