This year a hospital administrator at a busy hospital in Henderson, Nevada had emergency room patients transported by ambulance to a less busy hospital nearby so he could put more profitable surgery patients in the available beds. The physicians in the hospital revolted because they felt the practice could harm the patients even though his actions made the hospital profitable.
This is a clear demonstration of a clash of cultures, says Dr. Brenda Kowske, manager and senior analyst for the HR practice at Bersin by Deloitte. She says the administrator’s chief cultural value was profitability while the physicians’ primary cultural value was topnotch patient care. There was a clash because their values didn’t match. “Each group operated under different rules, values and expectations,” she explains.
Why culture will determine profitability for healthcare providers
The Patient Protection and Affordable Care Act will force those two cultures to merge when implementation begins next year. Now that “Obamacare” has survived a Supreme Court challenge, hospitals will increasingly face financial consequences for failing to live up to patient expectations of quality care. That’s because part of the US federal government’s hospital reimbursement fee will depend on a patient satisfaction score, called a HCAPHS score.
Since HCAHPS scores are directly linked to reimbursement, they are a “pay for performance” metric. However, hospitals that have raised their HCAHPS results discovered they also had fewer falls, lower infection rates and fewer readmissions, which are all factors that also impact federal reimbursement.
Brent Daily, COO of RoundPegg, a culture management software company, believes a low HCAHPS score can cause “budget swings of tens of millions of dollars for large hospitals.” He says “no hospital can afford to leave money on the table.” And who doesn’t want to provide the best patient care available?
So how do healthcare providers improve this critical HCAHPS score? Daily says cultural assessments are one tack. Teams of employees in the healthcare world “perform better when they are all rowing in the same direction,” he insists.
Today healthcare organizations “must be able to achieve organization-wide alignment of their teams in the face of this transformation,” he explains. Now their financial health depends on it. Daily says hospitals have asked RoundPegg for culture assessments so “their teams can align together around patient success.”
How do you determine your company’s culture?
How do you determine a company’s culture? And what do you do if there’s a clash that’s affecting the bottom line?
Dr. Kowske said individuals are not good at this “because their personal experiences color the way they understand culture and its expectations for behavior.” She says the best way is to have an outside company provide assessments “which are objective and scientifically valid.”
That’s where RoundPegg comes in. The service provider works with HR managers to do just that. It then allows HR leaders and C-level executives to manage the culture from the cloud. Currently RoundPegg makes its clients are not dealing with square holes.
Daily says the provider’s clients use the assessments for four purposes:
- To hire appropriate employees
- To develop existing employees
- To engage and reward current employees
- To track changes to the culture with the goal of stronger alignment
Assessing the culture from the cloud
RoundPegg measures a company’s culture using four software applications based in the cloud.
Daily says traditional cultural reviews, which rely heavily on interviews, have been available to HR managers for decades. The problem, he says, is they present a static picture of the organization. RoundPegg’s technology gives a constant, changing picture. “A business executive can keep track of the culture daily as long as he or she has access to the Internet,” he points out.
Employees take a cultural survey online. The survey measures and reports on 36 different values like sharing information freely, being competitive or being creative. Respondents determine which values define them the most or the least.
RoundPegg’s software then taps into a psychological data base to help the executives determine a course of action.
In one case the client wanted to make accountability its chief cultural value. However, every time it installed a process to improve accountability, the effort failed.
After its employees took the survey, they found half the company felt following the rules was important. But the other half felt being fenced in kept them for doing their jobs properly. Getting the job done right was more important than following the rules. So they self-selected what rules to follow.
RoundPegg suggested two fixes:
- In the hiring process, identify candidates with the “rules are OK” gene and probe those without it to understand risk.
- Ask the employees who don’t like being told what to do to craft a process that they can live with that would hold them accountable
“We are helping them shift their culture and quantify the progress,” says Daily.
Culture is important to all companies at this stage of the economic cycle
Healthcare providers are not the only industry where cultural convergence is key today. Dr. Kowske says charting a company’s culture has become critical at this time in the economic cycle. “There is little tolerance for employees or departments who are not pulling in the same direction,” she observes.
Recovering companies need every resource to be working “to the fullest extent. If any talent is wasted, it shows. This shaves off an edge in your competition advantage,” she says.
Dr. Kowske says companies coming out of the recession are expanding their geographic reach in two ways:
- Through mergers and acquisitions
- By organically developing new markets in different geographies with different social mores
“Both of these can lead to culture clashes, especially if it involves global growth,” she says. She says often an American company doing business abroad has to adopt some of the tenets of the local community if it is going to be successful. A winning example is Ford Figo, a car sold in India by Indians. “Imposing American ethnocentric ways of doing business threatens the success of the product in the market,” she says. Today, the most successful companies are “adjusting their attitudes to deal with that country’s cultural values.”
If a company grows by merger and acquisition, HR has to teach the acquired company’s employees the new, acceptable behaviors. “They need to know things like ‘what kind of conflict is OK?'” she explains. She calls this “the socialization stage of onboarding.”
Dr. Kowske says “a sound culture is the foundation for success” in today’s economy. And for healthcare providers, it may be the only prescription for financial health.
Do you think culture is important? How do you measure culture in your organization? How do you deal with cultural clashes?