​AHRMM18 kicked off today.  The theme of the conference this year is talent.   I couldn't be more proud of AHRMM for prioritizing this topic. 

PEOPLE are a supply chain function's most essential resource.  Talented people cultivate relationships, develop strategies and advance the supply chain agenda.   People design processes, implement systems and extend insights to drive operational excellence.  The desired results (i.e. savings, innovation, quality improvement, service improvement, etc) are are predictable outcomes we get when we approach things in this order.  It's all too temping to take on the big savings goal without a corresponding investment in talent management.  This would be a risky step towards mortgaging your future.    

Today, I hosted an extraordinary panel of iconic leaders including Laurel Junk (Kaiser), Brent Johnson (former Intermountain Healthcare and Intalere) and Lara Latham (Stryker).  The concentration of wisdom offered to attendees by this panel was truly humbling and was an honor to moderate this session.  During the session, we shared the results from our industry's first survey about the competencies and attributes of the Supply Chain Leader of the Future.  You can also download it here. 

Late last week, I participating in a podcast interview with Nate Mickish, on behalf of The Bellwether League.  It was so rewarding to get to know Nate through this process and I admire his superpower of leading with curiosity as he asked powerful questions.  Impressive.  We had a great time recording the podcast and talking about some of the topics just reminded me of why I do what I do.  I'm more committed than ever to elevating the healthcare supply chain.  Here is a link to the podcast if you are interested in listening in:   

This week continued to be full of tremendous insights on healthcare talent.  Each session at AHRMM is filled with leaders demonstrating a real commitment to attracting, developing and engaging the best talent for our healthcare supply chain.  It's arguably the best time to be in the healthcare supply chain profession.  

Imagine being in the automotive industry in the industrial revolution or in the telecom industry in the late 90's.  This is our time to shine as our industry powers through an irreversible inflection point.  Talent is finally the front burner topic.  We need a new generation of leaders to compliment the experienced incumbent leaders and collectively guide us into our future.  Our patients are depending on us.   

Over the last couple months, I've been privileged to serve as a keynote speaker at numerous events, to support inspiring coaching clients, to cultivate commercial growth for supplier organizations and to facilitate education events.  Overwhelmingly, the question I keep getting asked is "what keeps you up at night?" 

Our healthcare supply chain is at a crossroads, facing an unprecedented convergence of circumstances.  Are we progressing or regressing?

Below are seven "front burner" topics consuming my attention credits:

1. Merger Mania:  Companies often buy each other for a few specific reasons:  economies of scale, economies of scope, customer/market share growth, population health risk pool viability, diversification or synergies.  The real challenging work begins post merger when the integration activities consume both organizations for period of time.  Many mega-mergers make perfect strategic sense.  Others should cause us to pause and invite curiosity about the motive, strategic justification and conviction to integrate.  Let's not forget that if IDNs were publicly traded companies, the Fortune 500 list would be reconfigured to include many hospital systems (pre-merger).  


2. Strategic Misalignment:  The CDC reports 86% of nation's $2.7 trillion annual health care expenditures are for people with chronic and mental health conditions.  Why does the C-Suite task service line leaders and supply chain leaders to reduce supply expense when they could be collaborating to fundamentally change the care model across the ?  Why is supply chain taking goals and initiatives rather than sitting at the table (as part of C-Suite) and influencing/setting the goals and initiatives?  If 50% of a hospital's cost structure is non-labor, then when is supply chain going to step up and earn the seat at the table next to the COO, CFO, CIO, CHRO and CMO? 


3. Executive Talent:  There have been more than 25 vacant VP/Chief Supply Chain Officer roles since January.  More astounding than the actual number of openings is the harsh reality that these organizations did not have a clear successor ready to assume the role (or unfortunately did not have enough confidence in the qualified emerging leader in their own organization).  Through my coaching and mentoring business, I've been exposed to number of uniquely-talented emerging leaders, each of whom are already ready for top-spot roles.  Who is fostering their development, advocating for them and coaching them to their fullest potential?  Many feel isolated, trapped and discouraged even though our future is in their hands.  


4. Leadership Development:  Possibly related to the Executive Talent topic above, the healthcare supply chain is under investing in its leadership talent.  Supply Chain Sherpas is about to issue the industry's first Supply Chain Talent survey.  Early polling responses already indicate we are not adequately elevating the leadership competencies of our incumbent executive leaders, our emerging leaders or our next general leaders.  Improving supply chain influence and impact is a function of leadership competency much more than technical competency.  


5. Benchmarking:  We continue to misuse benchmarking for prices and for practices.  Benchmarking is a great starting point on a value continuum, which supply chain should be creating over time as illustrated below.   We are too often stuck at phase 1.1 in a perpetual loop of benchmarking prices with each other rather than advancing each expense category to incremental forms of value towards population health.  Benchmarking alone may also create an artificial price floor for our industry.  Why would any supplier provide lower an IDN lower prices if they expected that price to show up in an  industry-wide benchmarking database (even if de-identified)?  From a practice benchmarking perspective, we have a bit of impostor syndrome in that we limit benchmarking people, process and technology to healthcare peers.  Imagine the breakthrough potential if healthcare supply chain leaders began benchmarking their people investments to Proctor & Gamble or Apple rather than to each other.  


6. Ripe Fruit on the Ground:  Why do walk over ripe fruit on the ground to climb trees to the highest branches, out on thin limbs to get what we believe to be the last bits of fruit?  Many hospital systems continue to explore creative ways of eliminating choices for physicians so they can rationalize suppliers and implants to create negotiating leverage with suppliers.  Meanwhile, there are still hundreds of unaddressed Purchased Services expense categories throughout Construction/Facilities, Finance,  IT, Human Resources, Marketing, Clinical Operations and others.  We also fight over the acquisition price of equipment only to forgo 20-30% of its value at the end of its useful life.  We still cost-shift through price haggling rather than creating value by addressing the 30-40% waste in the shared supply chain between the supplier and the hospital.  I'm committed to creating a movement around these important topics.  Look for articles, videos and whitepapers and maybe even some mastermind groups in the near future.  


7. Innovation:  Excluding academic hospitals, its rare for an IDN to have an R&D budget.  Suppliers are therefore a tremendous source for meaningful innovation.  Progressive IDNs already consider their best suppliers to be an extension of their teams.  However, there is an overwhelming sense of discouragement from supplier organizations that their ideas, concepts and relationship are trapped in the bottleneck of the healthcare supply chain.  I invite each of us to embrace important lessons learned from RTI's journey, which is highlighted in the film Puncture (click here for a summary of the film).  How many meaningful innovations are not making it to the point of care because of breakdowns in our healthcare supply chain?  How does a company making a single breakthrough device get the attention of supply chain?  How does a company offering tech solutions to supply chain itself get the attention of supply chain?  How does the supply chain leader know how and where to allocate their limited attention credits, when they are already overworked, undervalued and misunderstood?  Providers and suppliers are both struggling while meaningful innovation comes to a halt.  

These topics are white-hot in our healthcare supply chain today.  They are relevant, important and urgent.  These topics understandably shape the battleground for my provider and supplier clients.  I invest significant time digging into solutions around these areas since I'm not a fan of admiring problems.  Supply Chain Sherpas is centered around these topics and we will continue to adapt to the ever changing needs of our clients.  

With that said, these are not necessarily the topics that keep me up at night.  I have found myself consumed by our country's mental health epidemic.  The CDC just released a long term study, highlighting a 25.4% increase in suicide rates (nationwide) between 1999 and 2016.  Click Here for the study.  I don't yet know what this means to me, but something is clearly pulling my attention towards a meaningful purpose. 

​What's keeping you up at night?

It's been three weeks since the "go-live" of Supply Chain Sherpas.  I spent the first week in Santa Monica at a Rich Litvin Coaching Intensive program.  Then flew directly to the IDN Summit in Orlando for an extraordinary week with the healthcare supply chain industry.  This week started with a trip to Atlanta to spend time with John Pritchard of Shared Moving Media before heading to my home office in Colorado for a few much-needed days to catch up on messages and inquiries. 

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1.  Talent is Becoming a Top Priority
At the IDN Summit board dinner, John Kelly asked each attendee to highlight what they are most looking forward to in the healthcare supply chain (or in the world more broadly).  The hottest theme...leaders from suppliers and providers were excited about the interest and focus on talent and leadership development. 


2.  Coaching is Powerful
As a practicing coach, I've often witnessed the wonderful professional breakthroughs of my clients. Over these last three weeks, I've also witnessed a concentration of life-changing personal breakthroughs.  I’m beginning to fully appreciate the cumulative power of our limiting thoughts, beliefs and behaviors.  I will forever cherish the emails and letters I've received these last three weeks.  I’m filled with gratitude for the wonderful coaches supporting my own development too.  
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3.  Our Next Generation of Leaders will Positively Change our World
Next generation leaders (generally from the millennial generation) have been reaching out to me at an unexpectedly high rate.  These extraordinary individuals are wired for meaningful purpose, willing to explore diverse experiences, hopeful, curious, optimistic, eager to learn, collaborative and connected.  They think BIG and are aspirational about what's possible.  I've left every single conversation inspired and I'm committed to helping to prepare our next generation, emerging leaders and motivated incumbent leaders for the healthcare of tomorrow.  


4.  Healthcare Suppliers Feel Discouraged
Suppliers continue to transition from feature-selling to a solutions approach.  They consistently voiced concern about their inability to get meaningful solutions to the point of use.  They are discouraged by the bottleneck that has become the healthcare supply chain.  Frustration is often confused with deep underlying discouragement with the lack of progress.  Our suppliers are very intentionally trying.   
 

5.  Supply Chain Leaders Feel Undervalued
CFO's continue to escalate price savings expectations of supply chain functions.  Supply Chain leaders know there is more potential to deliver all forms of value.  M&A distraction is real.  Resources are constrained.  Expectations continue to increase and are often unrealistic, despite the very real cost issues in healthcare.  It's a formula for feeling undervalued, misunderstood, underappreciated and often overwhelmed.  Will Supply Chain leaders lean into courage and ask for help and support?

Spring 2018 is an especially meaningful time for me as I invite three wonderful new chapters in my life.  As winter gives way to the spectacular renewal of life all around us, I am welcoming growth opportunities on both the professional and personal fronts.

Professionally, I am intentionally choosing courage over comfort as I leave the safety net of corporate leadership roles, where I have invested over 20 years of my professional life. I joined the healthcare industry a decade ago after losing both of my parents, four months apart from each other, in two different healthcare systems.  Since that time, I've been inspired to elevate the collective capabilities of the supply chain so we can directly improve affordability, quality, compassion, service levels throughout entire healthcare industry.  Leading Intermountain Healthcare's supply chain transformation and helping Pensiamo serve its commercialization mission have been incredibly rewarding experiences.  I'm filled with gratitude for the opportunity to have interacted with so many extraordinary individuals. 

Today, I'm officially announcing the formation and startup of a company called Supply Chain Sherpas.  Supply Chain Sherpas helps provider and supplier organizations unlock the transformative potential of the healthcare supply chain.  Solutions include executive coaching, education services and advisory services.  I've been humbled by level the industry support and related momentum.  Supply Chain Sherpas has contracted clients across all three pillars of the business and I'm a bit surprised to be already focusing efforts on how to scale the business.  

I passionately believe in the force multiplier effect of investing all of my professional time helping inspired leaders to pursue their dreams, providing talent development resources to the motivated and helping organizations accelerate their plans.  Too many brilliant supplier solutions are prevented from reaching the point of care/use because of the increasingly-frustrating bottleneck that has become the healthcare supply chain.  For providers, the potential to elevate talent, improve strategic relevance and to liberate meaningful solutions is extraordinary.

Personally, I'm grateful for an unexpected and welcomed breakthrough with my health.  For 15 years, I suffered from a progressively-worsening, intractable migraine condition.  Two years ago, a nutrition change dramatically improved this condition.  After living with such a debilitating condition (and with the associated limiting beliefs that often accompany a degenerative illness), it took me the better part of 18 months to embrace the possibilities of an independent future.  I now honor my deep-rooted entrepreneurial spirit and embrace the present and future with excitement. 

Finally, Christine and I are celebrating a meaningful 20-year anniversary of starting our lives together and moving to Colorado in 1998.  We are happy to be back "home" in Colorado after wonderful chapters in the Carolinas and in Utah.  We are enjoying high quality time together and with close friends as we hike, bike, motorcycle and ski throughout the beautiful rocky mountains. 

Wishing you the renewing gifts of Spring.  Let's make the time to connect with each other over these next few months.  

Gibson Consulting recently invited me to share a perspective on the healthcare supply chain.  This was my first article introducing the talent imperative in our healthcare supply chain.  Click Here for the original article.  ​

Healthcare is experiencing profound macro pressures including revenue compression, growing consumerism, rapid provider consolidation, population health strategies, payor-provider integrations and the emergence of many non-traditional disrupters and competitors. Aggressive cost reduction targets inevitably become a large component of a multi-faceted strategic response to these pressures. Cue the supply chain team (or procurement team in some organizations) for supply expense reduction efforts. To unlock the full potential of the supply chain, we must be willing to re-imagine the supply chain function and invest in talent management strategies.

Let’s consider the current state of the typical healthcare supply chain function. It is grossly underfunded and understaffed when benchmarking the investments relative to world-class performers such as Proctor & Gamble, Unilever, McDonald’s and Cisco. Healthcare too often benchmarks within healthcare exclusively, which may be one of the root causes preventing revolutionary progress. Supply chain typically influences purchasing decisions for only 50% of the total addressable non-payroll expenditures; thus, leaving significant annual expenses on consulting services, marketing services, IT infrastructure, construction services and HR services relatively unmanaged. Supply chain typically relies on Group Purchasing Organization(s) for the majority of its contracting activities with suppliers. Therefore, the supply chain team hasn’t had the development time or resources to progressively advance its own cost management capabilities.

Far too often, supply chain is only measured on its ability to reduce operating expenses by showing how it negotiated lower pricing with suppliers. This myopic measurement process results in industry-wide value shifting. Simply stated, value shifting means that a hospital saves money by negotiating away a bigger slice of the supplier’s profit margin. The supplier’s cost structure has not changed at all and therefore the total cost structure of healthcare remains unchanged. Rather, the provider and supplier have just renegotiated how to redistribute the value between them (i.e value shifting). Healthcare has an underlying cost problem and this problem can’t be address through value-shifting activities alone.

Compounding these supply chain challenges is the underinvestment in supply chain talent. We have experienced an unprecedented number of retirements of C-level healthcare supply chain leaders over the last five years, many of whom are industry icons. There are currently more than 20 Vice President or C-Level open roles at hospital systems alone, which also suggests succession plans didn’t exist or failed. Healthcare is not yet a destination industry for the thousands of talented graduates from supply chain management degree programs. Our professional associations, trade shows and education opportunities do not provide accredited leadership education programs that adequately develop our executive supply chain leaders of tomorrow. Most healthcare supply chain functions do not have budget for talent acquisition, talent development, coaching and education, even if the solutions existed.

This is a call to action to everyone in healthcare. The supply chain function matters more today than ever before. Ask more of the supply chain function; fight the temptation and peer pressure to inadvertently relegate the team to a price management department. Supply chain has the potential to impact cost, quality, patient satisfaction, innovation, physician engagement and so much more. They also have the potential to influence 100% of an organization’s non-payroll expenditures, which includes all supplies, all purchased services, all drugs, all software and all capital across every line of business. This team can return ten dollars for every dollar you invest in them, every year for the foreseeable future. You may be strategically hurting the company with budget cuts that are uniformly applied across every department of the organization.

Once you ask more of your supply chain, it’s also important to invest in your supply chain team. An intentional talent management strategy unlocks the business strategy! Exercise uncompromising discernment when hiring talent and offer total compensation packages consistent with world-class performers from beyond healthcare. Goal and incentive alignment is also part of a comprehensive talent management strategy. Imagine a future where we measure the effectiveness of supply chain through the lenses of lower total cost of ownership, improved clinical outcomes, increased patient satisfaction or even increased revenue capture.

Effective talent management also means investing in the development of your supply chain team members. Technical competency development is essential, especially for front line team members. AHRMM, Sourcing Interest Group, APICS and other trade associations offer relevant technical certification programs. Leaders have an obligation to value these certifications and to help their team members pursue mastery in their roles.

Technical competencies must also be complemented with leadership competencies, especially as a rising star assumes more responsibility in a rapidly growing organization amidst rising expectations. Currently, there is no industry-wide leadership development program for healthcare supply chain leaders. The nuances of our healthcare industry, combined with the uniqueness of the healthcare supply chain profession, implore us to develop a supply chain leadership competency model. This model would help current leaders, emerging leaders and next generation leaders with specific leadership development, including attracting and engaging talent, change leadership, strategic visioning, execution, alignment, emotional intelligence, relationship building/collaboration, communications, customer centricity, quality management and possibly others.

Finally, talent management also includes succession planning for key roles and talent management reviews to ensure we are fostering the early and intentional development of our next generation of leaders. I’m grateful for the extraordinary executive coaches and mentors I’ve had throughout much of my professional life. These coaches have accelerated my development, deepened my self-awareness, expanded my worldview and dramatically improved my self-confidence. Competency development programs, succession planning and talent reviews become exponentially actionable with formalized coaching and mentoring programs.

Healthcare is a service industry, which means people are our most valuable resource. Have the courage and conviction to invest in a talent management strategy for your supply chain. Ask your supply chain team to do more, to immerse themselves into the business, to deliver more forms of value and to just be more courageous. Talent management unlocks a new world of possibilities so profound, you may find yourself having to re-name the supply chain function itself. Any suggestions?