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Positive Business Outcomes for Healthcare Companies

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Posted by on in Employee Relations

One night, somewhat towards the beginning of my career, I found myself sitting in the living room of a new neighbor. Let’s call him Jack after dear old “Neutron Jack” Welch who, like the neutron bomb, was known to eliminate whole staffs while leaving buildings intact. Jack was a self-proclaimed “hatchet man” whose job was to go into unproductive companies or offices and improve results by eliminating staff and otherwise shaking things up. “The first thing I do when I meet the staff…” Jack proudly proclaimed, “is pick the person I am going to fire! It doesn’t matter who they are, or what they do. I pick someone and fire them immediately. It sends a message about who I am and that changes will be made

Since then I have met and worked with several “Neutron Jacks.” They come in and eliminate positions and people without fully understanding what those employees do or the effect that eliminating those positions may have on the organization. They then count up the savings in salary and benefits and exclaim it to their superiors as if these actions will have no risks or potential negative effects. No one ever seems to take into account the lost business, turnover, lawsuits and regulatory issues that inevitably follow. No one understands that eliminating entire management staffs (and doing nothing else) eliminates company history, dooming the organization into making the same decisions that have proved to be wrong in the past.

In my career, I have been tasked with turning around many unsuccessful organizations and, in doing so, I have replaced many employees and eliminated many positions including whole layers of management. However, I have never lost sight of the point that you can never simply cut your way to success! You can temporarily keep a sinking ship afloat by stripping it to the bone, but if your goal is to truly revitalize a company, your plan must include new programs, new products, automation, selective outsourcing or centralization of functions as well as savings in staff and expenses. Furthermore, until you can hire or (preferably) develop the right leadership to champion these changes, you will not be successful and neither will the company.

When revamping a management team, remember that promotion from within will deliver positive results including retention of company history, shorter implementation curves, and be less expensive than recruiting from the outside. Not all employees are resistant to change; many times they are the most vocal advocates for doing things better and more efficiently. The problem is that they are often not provided with the training and support needed to be successful once promoted.  Employee development is imperative in any successful revitalization. The plan must include employee input in its development. Once developed, it is imperative that effort be made to inform the reorganized staff on the expected results of the changes, their new or changed responsibilities, and that training be provided to give them the tools to implement those changes and achieve those results. Any restructuring plan has its risks, but without employee buy-in, those risks increase exponentially.

There are times, however, when new blood is needed. Some organizations are just too inbred, too committed to outmoded ideas, processes or products. I was once told that “we do it the right way, and if a customer does not want to do it that way, they need to choose someone else.”  When confronted with this mind set, it is unwise to be sentimental about keeping employees just because of longevity. The best thing for the company is that the revised structure fits the company’s goals and the marketplace. To not do so is a disservice to all remaining employees and the company’s investors. The point to remember when making the decision to recruit from the outside is that it will probably be more expensive and can dramatically increase the timeline needed to achieve success and the costs of that increased timeline must be reflected in the plan.

So in equating all of this to my old neighbor Jack, his question really needed to be not “Who do I fire” but “What is the plan and who do I need to keep or hire to get this company to where it needs to be?” To reiterate: you can never simply cut your way to success. Success can only be achieved when a sensible plan, developed with input by stakeholders, and understood by those who are to execute it, is developed and implemented.

Tagged in: Employees Management
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