Plan, then take action
To help reach the goal of $85 million in cost savings, Maryland and her management team identified 22 areas that presented opportunities for savings.
The number of areas was important, but not as important as the fact that most of the areas in question were on the corporate side of the organization.
“Focusing on our core business of patient care was fundamental as to how we moved forward,” Maryland says. “So we took a look at how we were managing our corporate functions on the shared services side. Much of this transformation involved looking at the overhead, looking at the nonclinical areas first.”
In order to gain support for the developing program, Maryland wanted to find ways to assure employees at the hospital and facility levels that their ability to do their jobs would not be compromised or hindered in any way. If anything, Maryland’s organizational transformation was aimed at giving medical staff more freedom to serve patients.
“We said at the start that our goal was to reduce the burden on our hospitals, on those individuals who were providing direct patient care,” she says. “We wanted to free up resources and dollars to reinvest in our patient care. That was a component in helping to sell the concept of why this transformation was so important.”
Transformations like the one undertaken at St. John are rooted in the dollars-and-cents reality of a faltering economy, but that’s not necessarily the way employees will digest it. Employees will see the staff cuts and increased burden placed on them before they’ll see the financial ramifications to the company.
Cutbacks might be first and foremost a financial issue to you and your top management team, but it will become a cultural issue to your employees. If they start to believe that you aren’t enabling them to do their jobs, you will damage morale. If they get the feeling that you aren’t living your mission statement and culture, it will damage your credibility.
To help give your company room to react to whatever the economy throws at you, Maryland says you need to become vigilant about scenario planning.
“As you think about the future of your organization, you have to do scenario planning,” she says. “You need to come up with best-case, most-probable-case and worst-case scenarios. You need to be able to anticipate and stay ahead of the curve. Leaders need to do that all the time.
“As of now, it looks like our most-probable-case scenario will actually fall closer to our worst-case scenario. So going forward, we’ve already started to do our scenario planning for the next year. We’re going to work with the state leadership to get some ideas from them in terms of their forecast. We have all of the data that we’ve compiled through our scenario planning and have anticipated what it might do for us in terms of overall buy-in and the potential increase of uninsured patients we might expect.”