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Putting Employees First: A Leadership Strategy That Works

Sunday, October 15, 2006 - by Rulon Stacey

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Any business in the world will only be as successful as it is in meeting the needs of its customers. The trick for leaders is to know how best to do that, and who really does it. The simple truth, of course, is employees make the difference, and only those companies who first meet the needs of their employees will truly excel in meeting the needs of their customers.

In our organization, The Poudre Valley Health System (PVHS) in Fort Collins, Colorado, our customers are the patients we serve. We believe that each patient deserves world-class healthcare and that we have a responsibility to provide it. So we established a clear and direct set of priorities to drive us toward that goal. Our top priority may surprise you.

Priority 1: Meeting the needs of our employees

While our goal is to provide world-class healthcare, it is our employees who provide that care. It is unrealistic to expect that we can treat patients appropriately if we don't first treat our employees appropriately. That's why our first priority is to meet the needs of our employees, just as we expect them to meet the needs of our patients.

To do this we implemented an employee survey to determine how well we are meeting their needs. I believe that the leaders in our organization provide a service, and that service is management. We ask our employees regularly how well we, as leaders, provide that service to them. Supervisors in the organization then use that information to discuss opportunities for improvement with their employees. Every leader creates an action plan to improve the service he or she provides employees. Each employee should know, at any given time, what their supervisor is doing to better meet their needs.

By first listening to our employees and devoting the resources of our organization to meet their needs first, we have developed a culture of "family" within the organization. We regularly grill lunch for the employees; senior staff personally visit all departments in the organization; we pay salaries that are competitive, have staffing plans that are at the top of the industry, and, to be honest, we have a lot of parties. People enjoy working at PVHS. In fact, I regularly tell our employees that if this is not the single best place they have ever worked, I want to know about it. I, along with the CEOs of the other hospitals in our system, have given out our home phone numbers and have made a commitment to see any employee with a concern as soon as possible. We truly want to make a difference with employees, and for the leaders throughout PVHS to be equally committed to this philosophy. Time and again managers in our organization come up with their own new and innovative ways to better meet the needs of their employees.

Many have criticized this strategy as being too extravagant, but I think our results speak for themselves. Over the past 10 years our employee turnover rate has dropped from nearly 20 percent per year to less than 7 percent, giving PVHS perhaps the single best employee turnover rate of any healthcare company in the country. This lower turnover has resulted in a decrease of millions of dollars a year in expenses needed to find and hire new people, and millions saved as a result of increased efficiency because the employees we have are simply better at their jobs.

Priority 2: Meeting the needs of our physicians

Hospitals don't run without physicians. If you can't meet the needs of physicians who practice at a hospital, the hospital will simply not be clinically or financially successful. Therefore, we also measure how well we meet the needs of our physicians and, with our employees, create action plans to do it better. This is another reason why Priority 1 is so important. By first meeting the needs of our employees, we are in a better position to support our physicians. To expect employees to meet the needs of physicians without first having their own needs met is unrealistic. Skeptical at first, the doctors now receive such excellent support from the rest of our employees that they now understand the importance of Priority 1.

Priority 3: Meeting the needs of our customers

By meeting the needs of our employees, who in turn meet the needs of our physicians, we are in a better position to provide the world-class healthcare that is our ultimate goal. The success has been dramatic. Poudre Valley Hospital (PVH), the largest facility in our growing system, has been selected as one of the top 100 hospitals three years running. PVH has been selected by Healthgrades as a distinguished hospital and by the American Nurses Association as a Magnet hospital, making PVH one of only a handful of hospitals in the country to simultaneously have both of these distinctions. Clearly, our goal is being achieved.

We have been able to increase revenue and decrease expenses, and at the same time, we have increased the quality of care. That is very unusual in our industry.

To provide world-class healthcare, we established a system of priorities built upon first meeting the needs of our employees. Those who are on the inside often joke that, at PVHS, quality is "Job 3" because we established the other priorities first. Perhaps they are right. But in the end, by establishing the strategy built upon the foundation of our employees, we have successfully kept costs down and quality up. In healthcare, that is a pretty big deal. And that is what constitutes good leadership.