In 2009, Paul Levy, then CEO of the prestigious Beth Israel-Deaconess Medical Center of Boston projected a near 20 million-dollar deficit. Mr. Levy knew he couldn’t avert some unsettling actions, but he wasn’t about to give in to the academic ‘cutting’ routine either.
Mr. Levy took a close look at the people working in his institution; he made particular note of the lower wage folks. When Mr. Levy stood before his senior staff and leaders he said "I want to run an idea by you that I think is important, and I'd like to get your reaction to it. I'd like to do what we can to protect the lower-wage earners – the transporters, the housekeepers, the food service people. A lot of these people work really hard, and I don't want to put an additional burden on them.
"Now, if we protect these workers, it means the rest of us will have to make a bigger sacrifice. It means that others will have to give up more of their salary or benefits." 1
The audience erupted in applause and appreciation. Collectively, senior management accepted 25% reductions in pay, physician groups made generous contributions and staff far and wide flooded Mr. Levy with ideas and action aimed at reducing lay-offs. As a result, the projected lay-off of 600 employees was scaled back to less than 150; in excess of 12 million-dollars had been saved.
Mr. Levy had made two key choices- not to put his head in the sand and not to try to fix it on his own.
Once an ostrich…
Leaders cannot afford to put their heads in the sand, but they do. Knowing what’s going on in your business and the world is essential. But for some, the burden becomes over-whelming and ‘looking the other way’ provides temporary, yet misguided, relief.
Mr. Levy knew that big changes were needed; he took stock of the who, what, why and how of his business. By observing lower-wage earners for example, he recognized not only the integrity of their work ethic but also that their services were essential to the efficient and effective operation of his business. As a result of his efforts he was better equipped to make appropriate decisions regarding staff reductions and cost-savings.
Rally the troops
A leader knows they cannot achieve success single-handed. Success calls for the input of many people and this rallying the troops in times of duress is essential. Rallying the troops hinges on a long-term investment in your people; inspiring loyalty, building trust and instilling a common sense of purpose. In this environment, rallying the troops can be initiated using a few simple tools:
- Share the reality- you shouldn’t put your head in the sand; the same goes for your employees. Don’t treat them as if it hurts to know the truth. The rumor mills are vicious and often ill-informed. Tell your employees what’s going on. Don’t expect them to like all of it, but be honest. They deserve nothing less.
- Ask for their help- once they know what reality is, your employees can provide some of the best advice as to what to do next. Ask them for their help; not only does this engage them in the outcome but chances are they have information you can’t afford to miss.
- Put your skin in the game- if you must ask for sacrifice, lead, by example. If salary cuts are needed, let them start with the leaders first. If a reduction or modification in benefits is needed, be sure yours are the first to change. What’s good enough for your employees should be tested and vetted by the very leaders that prescribe it.
It seems we have a lot to learn from the Beth Israel-Deaconess experience. Thanks Mr. Levy.
1 Source: A head with a heart; Kevin Cullen, Boston Globe; 3/12/09