As the hospital industry enters a period where costs must be slashed by 25% to 30%, supply chain professionals are facing an unusual set of circumstances. While one would suspect these circumstances would offer excellent growth potential for the supply chain profession, in reality, the opposite is true.
A variety of factors are forcing the hospital industry to consolidate into systems and networks, a process that will reduce the number of higher-salaried supply chain executive positions. A shift is under way from supply chain to expense chain solutions. To survive in this new environment, incumbent supply chain personnel must formulate personal business plans, plans that acknowledge that “survivors” will be elevated to chief resource officer-type positions, while others will be relegated to managing inventory, procuring supplies and services based on established volume contracts and overseeing intra-hospital sterile processing. The task of inter-hospital reprocessing will likely be the responsibility of the corporate CRO.
Each system or network will use a variety of factors to select their CROs. However, it is rather obvious that leadership capabilities, as opposed to technical skills (i.e., IT or product knowledge) will be the primary factor. Often, middle managers think of leadership in terms of authority when, in reality, success depends upon facilitative leadership – the ability to lead without authority. Such leadership is earned as opposed to being bestowed. It evolves from a commitment of an individual to attempt to create win-win relationships with everyone in the organization – the foundation from which respect will be earned from their peers as well as their employees.
Leaders who seek to build personal credibility must make a conscious plan to earn the respect of everyone within an organization, especially the members of their team (department). When a team truly works as a unit, attitude trumps aptitude, and the team earns the respect of everyone within the organization’s infrastructure. Bound together by mutual respect fueled by departmental leadership, effective teams are recognized by the willingness and ability to collaborate to respond to challenges regardless of the complexity of the task or time constraints.
As insignificant as it may seem, departmental personnel recognize and appreciate leaders who understand the many variables that are stressors in every job. Actions trump empathy when leadership is involved. Accordingly, a concerted effort must be made to truly support the needs of the troops, a critical factor that will enable the supply chain leader to earn their respect. How do you respond when an individual is on vacation? Do you become involved in supporting the flow of work to avoid “stress” when the individual returns to work?
Respect becomes contagious. As a supply chain executive, this fact cannot be ignored. Leadership capabilities will determine your ability to thrive in the hospital industry, where competition will be keen for the top jobs that will be required to manage the decision making for the 53%-57% of all dollars dedicated to non-labor expenditure. All other jobs in the expense chain will also be critical to ensure organizational survival. However, if income growth is important, it will not be part of the “supply chain!”
William J. McFaul is the founder of MCFIP, a modeling company striving to mitigate chronic disease through clinical and scientific applications of homeostasis in epigenetics and metabolomics. He founded and later sold the healthcare expense management consultancy McFaul & Lyons.