The following is a transcript of my interview with Christopher Callahan. To find links to the audio files and more information about the interview, please click here.
These transcripts are made possible by a gift from the NNEAHE.
These transcripts are made possible by a gift from the NNEAHE.
Bonica:
Welcome to The Forge, Chris.
Callahan:
Thanks Mark. It's great to be here.
Bonica:
You went to King's College in Wilkes-Barre, Pennsylvania, and you studied economics and government and politic. What drew you to King's College, and why the double major?
Callahan:
Actually my dad went to King's College and it was ... so that's the first reason to apply. But the real reason I went there was the size and the reputation. It's a Catholic college, it's run by the Holy Cross fathers who run Notre Dame. We are one A to Notre Dame. You get into Notre Dame when you get into King's.
Bonica:
You said you liked the size, was it-
Callahan:
It was a smaller college. There was probably about 1,000, 1,200 students that lived on campus and probably another thousand from the Wilkes-Barre area.
With a small size, you really got to do a lot and get involved in leadership roles, which was important in retrospect, looking at the ability to take on a leadership role. You didn't have to jump through a lot of those flaming hoops. If you wanted to, it was available to you and I was able to do a number of things there.
The double major, when I went to college, I was really thinking about law school, I was thinking about public administration, so that was were the government part came from. Once I got there, I took a couple of economics courses and thought that it was a good foundational thinking for other business aspects, so I was able to pick up that as a double major after I got there.
I also had a minor in philosophy, so-
Bonica:
Wow. Well, you were all over the place.
Callahan:
I was well-grounded.
Bonica:
That's great. You went to the George Washington University shortly after graduation.
Callahan:
Yes. I went right from college, right to graduate school. I knew that I wanted to get in the hospital administration, healthcare administration. I didn't have any clinical background, which was problematic to get in an operation environment and I knew that I wanted to be in leadership at some level, so I just jumped right it.
Bonica:
You came to your undergrad thinking law school maybe. At what point did you make that shift to say, "I'd rather be in administration, and specifically in hospitals?" How did that come about?
Callahan:
Probably sophomore, junior year. I was influenced, again, by my dad, who was on the board of directors of a local hospital. He'd became the chairman of the board, and actually his day time job was the Office on Aging administrator in the country that we lived. And his office happened to be in another hospital, so I was exposed to a lot of hospital work.
It was late '70s, early '80s. The health care was still an expanding field. Medicare and Medicaid really weren't that old at that point, so there was emphasis still on growing access to health care services. And I got to see things through the board chairman's eyes as we were having adult beverages on the porch every once in a while.
So he got me interested in it, introduced me to a couple of folks that were in the field. I was lucky enough to be able to chat with them, get some guidance on programs. George Washington came up a couple of times, a larger program that was willing to accept people without real world experience, and as part of their program, they had a year long administrator residency. So they actually put you in a hospital, you were in DC for about 18 months, and then a full year doing an administrator residency in a hospital.
Bonica:
Where did they send you to do your residency?
Callahan:
I went to Mercy Community Hospital, in Port Jervis, New York. It was a smaller hospital in the rural part of Orange County, although Port Jervis was kind of a small little city.
It was great for me, because it was about 20 minutes away from where I grew up, so I didn't have to worry about housing and meals and all of that stuff. I just went home, which was great.
Bonica:
What was that experience like for you? First time, really working. I mean, you had some exposure to a hospital through your dad, but now you're in the thick of it. What was that like?
Callahan:
Well, it was a very interesting place. Catholic hospital, I showed up on the first day of merged operations, where the Catholic Hospital had purchased the Doctors Proprietary Hospital, which was ... the Doctors Hospital was about 35 or 40 beds. It was literally three blocks away from the Catholic Hospital that it was about a 150, 160 beds.
So, showed up on the first day of merged operations and they literally didn't had a letterhead. They had to x-out, I'm dating myself now on a typewriter, they had to x-out Saint Francis Hospital and type in Mercy Community Hospital.
The first year I was there was very interesting from a cultural perspective, because you're merging two very, very different cultures. And what I found there is, in a small hospital, in a small town, you almost have to have an enemy. So you're always ... there's an, "Us" and a, "Them." In that town, it was always Doctor Sunnyside Hospital versus Saint Francis, and Saint Francis versus Doctor Sunnyside. And now, all of a sudden you are merged and we're supposed to play on the same team. It was a great learning lesson for me in merging cultures. Now you take a look back, the merger mania is still going on today.
Bonica:
It seems to be picking up even at this point.
Callahan:
It is. Certainly I think it is.
The administrator residency that I was able to do was great, because I just had the ability to wander around the organization for a year, and find out how different departments work. I did rotations for four, five days in the operating room and gowned up. They didn't have me do any cutting, but in a non-teaching hospital, the doctors still loved to teach, so I was teaching material, and it was like, "Hey, come on over here and look at this, through this scope."
And it was fascinating from the medical aspect, but then you got to see how all the departments interacted, and how dependent they were on each other, and how siloed they were from each other.
It was a great experience to get in and do that. I was also focused in a couple of project areas back in the day, the personnel department was one of them.
Bonica:
Was that a thing, they said, "Hey, we want you to go work in that area for a bit?" That's part of the residency initially?
Callahan:
Yes. They had a couple of projects that they wanted to be done in personnel at that time. And it was an unsophisticated operation, run by good people, but they were not well-trained in either personnel, it was kind of OJT for them, nor in management planning in just kind of big picture thought and strategy. Really it all was very, very tactical, very, very short term.
Bonica:
And this was common in that time period.
Callahan:
Very common.
Bonica:
It was not unique to that organization, right?
Callahan:
No. Personnel was a filing system operation. There wasn't the sophistication in terms of behavioral interviewing, background checks. The office and the inspector general and all of the federal regulations around hiring just weren't past yet. It was a much, much simpler time, not always for the good.
But in this particular organization, they had also affiliated with the sisters in Mercy Health Corporation at Farmington Hills, Michigan just outside of Detroit. They were buying some consulting services. In fact, the administrator was a contracted employee from SMHC, who had taken over. He was actually the first lay administrator that the organization had. It had been all nuns before that. In fact-
Bonica:
That's a big cultural change too then, I guess.
Callahan:
It was a huge cultural change. And it actually taught me a lot about power and authority, which I remember at George Washington was a full three hour course on the difference between power and authority in short term hospital administration.
And I remember sitting there calculating how much I was spending in tuition to listen to this guy talk for three hours on the difference between power and authority. And in my first job, I found out and I reflected back on that, because I had no clue. I thought if you're the CEO, you were in charge. And it's certainly in healthcare that is not the case. You have to be very careful of which way the winds are blowing, or your boat is going to get swamped.
Bonica:
What's the 30 second summary of the three hour course on power and authority?
Callahan:
That there is a huge difference in just because you have a title, doesn't really mean that you're in charge. You have to understand where the board is, you have to understand where the medical staff is, you have to communicate well with the employees and you always have to work very, very hard to get everyone moving in the same direction, at about the same time.
If there are cross-currents that develop when you're sailing through those waters, you better have a life jacket on, because the seas can get pretty rough.
Bonica:
You finished your residency and you stayed on at ...
Callahan:
Yeah, this is part of the power versus authority thing. In early December, the administrator and the assistant administrator, who was my preceptor, didn't see eye to eye, and the assistant administrator was asked to leave. And this was 160-bed hospital, and there weren't enough hands there to keep the ship going. A year into a merger, we were just starting about a $25 million construction project, which back in the day was a huge slug it out.
The administrator asked me to stay on for a couple of months and just help him out. Given that I had no job offers at that time, and the realer the range of options, that seemed like a really good idea to me. So I stayed on for three months and helped him out and at the end of that period of time he said, "I really need help in HR, so could you be the assistant administrator for human resources?" And I said, "Yeah, I'm in."
Bonica:
That was kind of a life changing, or a direction setting moment.
Callahan:
It was. I really, at no time in my preparation for earning a living, did I ever sit back and think, "I want to be a human resources executive one day," but I fell into it.
Bonica:
I think that's a common story, right? Had you had any course in it? Did George Washington teach an HR course at that point in time?
Callahan:
Not a one.
Bonica:
Because it was still that personnel kind of orientation-
Callahan:
Traditional personnel. There is a little bit of group dynamics and organizational development type course that is probably standard for your students today. My high school daughter is doing project work and figuring out who's the lead and who's a follower and what makes an effective team. It was kind of cutting edge stuff back in the day, but I learned by making a lot of phone calls to our labor lawyer in New York City, I read a lot of periodicals, a lot of journals.
American College of Healthcare Executives was the professional association that I was joining at that time, and they had a number of HRE type deep seminars that were three, four days long. So I made sure that for the first couple of years of my professional life, that I got out and made that investment in myself, to go to these professional learnings.
I also picked up every free journal that there was in the whole world, so I was on every lawyer's free mailing list and was able to pick things up pretty quickly, and then figure out how to apply them at work and make it work.
The other fun thing was that I had no preconceived notions, so I often talk today about, "I'm just from HR so I can ask stupid questions." And I ask stupid questions, because I really didn't know. And when I got some answers back, why we did things the way that we'd always done them, that's doesn't seem to make a whole lot of sense anymore, does it? And people will go, "Yeah, I guess the underlined motivation for doing that has actually gone away now." So, why do you still do it?
First couple of years, I also felt it was part of my job to tell the emperor that he was naked. And that has been over the years an evolving role for HR, to be the truth teller to power.
Bonica:
Can you give an example of what kind of an issue would HR step in to deal with and help the-
Callahan:
Well, it would be really anything from an operational perspective, or a strategic perspective. I felt it was really my role when there was a group thing going on, that this is a really a good idea, and all the heads around the table were nodding, for me to ask the stupid questions. "Do we really want to do this?" And just push a little bit back, and hopefully get somebody to think, "Well, maybe there's another way," or," Maybe there's another time," and, "Maybe this is not the right sequencing for this."
Bonica:
Would you say that's you, personally as a leader in your leadership style, or is that something that seems to go with the field? Or both?
Callahan:
I think that I naturally was a nudge and did that. At a really expensive university of Michigan Graduate School week-long intensive course with some of the gods in the HR field, Brocklebanks and the Dave Ulriches of the world, I subsequently learned that that was one of the six, or seven emerging skills in HR that you needed to have and in their rubric of what a professional HR group looked like. I was ahead of my time, but I just didn't write the book.
Bonica:
So you stayed with Mercy for a while, and then you left in 1987, to be the director of human resources at Methodist Hospital in Philadelphia. How was Methodist different as an organization, from Mercy?
Callahan:
Very urban, South Philadelphia rocky territory. It was ethnic, it was urban, much larger than Mercy. It had a nursing home attached to it and a visiting nurse group. I got to work in a couple of new areas from a healthcare delivery perspective. Certainly the racial and ethnic makeup in Philadelphia is very different than Port Jervis, New York. That was a new experience for me.
Bonica:
As a leader, or just culturally you hadn't been exposed to that?
Callahan:
Culturally I really hadn't been exposed to a lot of different ethnicities. I grew up in Northwestern New Jersey, which was very white, or more cows than people when my parents moved to Sussex County, New Jersey. And then I went to a very similar experience at King's in Wilkes-Barre. So when I went to Washington for the first time, my eyes were opened and I realized that the rest of the world wasn't white, Irish and Catholic.
It was very interesting and I think it was good for me to get into a multiethnic, multiracial environment. It wasn't challenging at all. It was actually a little bit more fun.
But we had challenges in Philadelphia about recruitment. There were 65 hospitals in the city of Philadelphia when I was working there. They have probably 25 or 30 now, so it was tremendously over-bedded. Lots of neighborhood hospitals, lots of religiously sponsored hospitals. And we went through a couple of challenges with recruitment.
We also had some turnover in leadership right after I got there, that presented some interesting political challenges. And it was a challenged hospital fiscally. Reimbursement changed tremendously during that period of time. It was the beginning of the HMO era, where you stopped doing lots of things to patients, and all of a sudden your volume dried up.
Bonica:
And also the government reimbursement shifted from cost-plus to DRG at that point. Was that [crosstalk 00:19:24]
Callahan:
Yes, that was about '83, '84.
Bonica:
Yeah, that's true, okay.
Callahan:
But it really stared to ripple through at that time I think.
Bonica:
Yeah, I'm sorry. So we're still in late '80s here.
Callahan:
Yeah. But there were a couple of major payers in Philadelphia and preferred provider organizations, and HMOs really started to take off at that time. So your utilization dropped off the table and I needed to become relatively quickly a downsizing specialist.
Bonica:
Did the hospital go through a downsizing?
Callahan:
We went through probably three rounds of downsizing when I was there.
Bonica:
I wanted to ask you about that. How was that process like from the HR perspective? Because it's part of normal business ... well, not normal, normals look strong, but it's a thing that you will deal with if you're an HR professional. That's something-
Callahan:
In these days and times you will. At that point in time, again, healthcare had been in a growth and expansion mode. This was really the first pullback and the first realization as a nation, that oh my god, we're spending 10% of our gross domestic product on healthcare. That's going to squeeze everything out and there will be no more money left for infrastructure and anything else. Of course, we now spend 18% of the gross domestic product on healthcare.
Bonica:
If we'd only get back to 10%.
Callahan:
It looked pretty good.
This downsizing was new from the HR perspective. From the culture perspective, hospitals, especially religious hospitals weren't run very efficiently. There was a lot of mission in these hospitals, so you found yourself employing people in entry level service positions, at housekeeping, at food services, and you found yourself really being the employer of last resort. It was great from a mission perspective. It was really not very good from an efficiency perspective, and it made it all the more difficult when you had to let people go, because you just didn't have the money anymore.
Bonica:
And if you were the employer of last resort, where were they going?
Callahan:
Where were they going to go? It was challenging to be in on the business determination that this turnover doesn't look like we're going to get where we needed to go with people leaving on their own accord, or retiring. And we got to do something within a pretty short time frame. The hospitals at that point didn't have a ton of money sitting on a balance sheet someplace that they could take their time. They were worried about what was the operating margin looking like this year.
You had to move much more quickly. And when you came up with the determinations of what the number was going to be and then figured out which departments were going to get cut, you really weren't dealing with people who had been there just a short period of time. You're talking about people who had been there for a long time.
I remember having to eliminate a class of employees that were nursing assistants when we were doing some work in Methodist. And the vast majority of these almost all women, had been at the hospital for probably an average of 22 to 23 years. They were all high school prepared, or GED. They didn't really have certifications, or licensure. They were paid very well for their level of education, they had a full benefit package, they had pensions, and most of them were African-American. There were a number of sleepless nights before I went in and I figured that I had to do the chat with each one of them along with their manager, to let them know that we had to let them go today.
It was gut-wrenching. It was horrible, because I knew that I was sending these folks off and that their employment prospects were not good. And if they got a job, it would be nowhere near the rate of pay that they were getting with us at that time.
Bonica:
From a macro perspective, is that just a change in the economy that was happening in that time? Or was it specific to hospitals?
Callahan:
It was really specific to the hospitals because of the HMO movement. The reduction in length of stay, getting patients out of the hospital sooner, and it was cost driven. At that point healthcare insurance premiums were going up 10, 15, 20% every year. And people thought it was bad then, but 10% on a very low number isn't really a big number. 10% on a premium now is a very big number. We're back systemically that 4, 5% inflation in healthcare premiums overall. But it's a very big number, so it takes a big bite out of your benefits budget. Back then it was moving patients out of the hospital much quicker.
Bonica:
So the industry was changing and that was just-
Callahan:
In huge ways. Yes.
Bonica:
And then these folks who had been employed, like you said, it was kind of an employer of last resort now, were going to be sent out to the economy, to opportunities that just weren't the same.
Callahan:
They weren't. You look at how does that impact you as a person, and then what is your role in guiding the business to make sure that you don't overbuilt, you don't over-hire, because in the back of your mind you know that you're going to be the one that's going to have to sit with these folks, and it is a very different perspective when you're up-close and personal to these folks. And cry along with them, because this is the end of something really good in their life, and you just don't want to go back there.
You look at every trick in the book that you can come up with, to prevent that from happening. Early retirement programs, I got to be an early retirement program design and execution specialist, buy-outs, they were outside of pension plans incentives for people to leave, so I didn't have to replace them. I got pretty creative in finding ways not to have bad conversations with people.
Bonica:
Yeah. So that's something that stuck with you since then?
Callahan:
Yeah, absolutely. And in the last couple of years, I've actually had to go back to the bag of tricks as we have gotten out of business alliance in Exeter Health Resources. I've actually turned the recruitment department into an outplacement department. Probably for a period of years we were looking to close a long term care facility. It was not one of those things that we could go, "Hey, Monday we're closing." We had to give six, eight months not just to the state, we had to give notice to patients and their families, we were responsible for transferring these patients to an appropriate level of care.
The tricky part was, I had to maintain staff in place to do that, with them knowing that really at a point in time, not that far out in the future, they weren't going to have a job anymore. You had to employ a new set of tricks, not only to get them to leave, but get them to leave at the right time and not too early.
Bonica:
Right, because you had to maintain staffing as long as you had patients and-
Callahan:
Absolutely.
Bonica:
[crosstalk 00:28:13]
Callahan:
This was kind of that transition to how do we get them to other places in our organization. We had 2,400 employees and in a couple of points during the last five years, we've been down to 2,100. So we had to close a couple of businesses and get out of those lines of work.
But from the HR perspective, how you have people leave your organization is almost as important as how you bring them in. Most of our employees live within 30 minutes of Exeter, so they're not only our employees to a large extent they're our customers as well, so we get to care for them, we get to care for their families, their extended families.
We're not just treating a human resource, we're treating one of our neighbors. It's a very, very different view of the world that you need to take as opposed to any large multinational company, who is going to close up a factory and move off to South Carolina, or Mexico, or China. You don't have to deal with those people anymore. You're up, you're done and over with.
We can't move the hospital. We're there because that's where the people are. It gives it a very, very different view. You have to be much more humanistic than a kind of business school cut and dry.
Bonica:
In the years you were at Methodist, how was the HR field development? It seems like there's a lot of change there as well. When you came in at Mercy, it was kind of more of a personnel department. From the time you first came into the field through here, was there a lot of change going on in terms of how HR was viewed?
Callahan:
It was starting to become a bit more sophisticated. It was becoming the norm that the HR leader sat at the executive table and was part of the senior executive team. I had that at Mercy. When I first went to Methodist, I reported to a vice president who was on the senior executive team. In part of the turnover in the changing of the guard at Methodist, within my six to eight months there, I ultimately wound up reporting to the chief executive officer, so I became even with the director title, I became part of the senior management group, which was something that I was very interested in helping to run the business, not just run the HR department.
Actually, I think in my first three jobs I changed the title of the department from Personnel to Human Resources. That was kind of interesting. The sign makers really enjoyed it when I went someplace, because they got some business.
Bonica:
In '93 you moved to Muhlenberg?
Callahan:
Muhlenberg.
Bonica:
Muhlenberg Hospital Center in Bethlehem, Pennsylvania. And this was now to take the director of human resources.
Callahan:
Yes. Jumping out of South Philadelphia, they were having continually financial pressures, and it takes a toll on you to work in an environment where you really don't really have any resources. And I've done that for six, six and a half years and it was just time for a change.
Muhlenberg was a bit different in Bethlehem, kind of a newer, smaller hospital. Had a very active psychiatry program, which was interesting. That was new, to work in behavioral health. It also had a long term rehab hospital attached to it in that corporation. So again, I was exposed to different care settings, and that was kind of fun and exciting.
Bonica:
How does that affect the work that you do, to have a different care setting, to have a rehab hospital versus acute care facility?
Callahan:
In many environments, these care settings are in different buildings. They come into the organization at different times, and they have different cultures. One of the fun things and one of the advantages I had in human resources, is the masters in health services administration. So really the masters in operations of a hospital.
I was able to come at a department's problem, or an organization's problem, actually knowing how it runs, which was a huge advantage for me when I would interview, because I was both the HR guy, but I also knew how the place ran and what the relationships were, what the handoffs were.
When I got to a place that had some new care settings, it was just a learning opportunity for me to see how that place actually ran, what the business was like, what the handoffs were like, with the operations, how that was like. That was kind of fun for me and then I was able to apply different HR tools and different approaches, based on the different settings of care.
It's like being a general car mechanic and working on a Volkswagen, and then a Mercedes, and then Chevy all on the same day. It was intellectually, I think, rewarding to play in those different care settings.
Bonica:
At that point you had about 10 years of experience in the field. How did you feel about your expertise at that point, and what was new, was were you learning as you went into that new assignment?
Callahan:
Some of the new care settings. Even though Bethlehem was 60 miles from Philadelphia, it really felt like a very different world. The payers and the incentives for those payers were very, very different. The level of sophistication of the HR department was not contemporary, so there were things that they were doing there, that were kind of easy fixes. You got a couple of quick wins, which gave you a little bit of wind in your sails, it pumped up your credibility a little bit. It was good to go in and find some of those things.
One of the advantages of working in organizations that are struggling financially is that you're used to operating looking for nickels and dimes. And then when you go to a place that has been more well-off, they don't have to look that hard, you can generally find a lot of change in the seat cushions really quick, because a lot of stuff falls out of people's pockets.
As those organizations were pressured financially in the changing healthcare world, you were able to really help out in some major ways, by finding opportunities to save money and become more efficient, think differently about the way that you train people and you interact with customers.
Bonica:
You were at Muhlenberg through 1997, and then you went to Saratoga Hospital and Nursing Home in New York, as the vice president now for human resources. What did it mean that you took on that title?
Callahan:
Well, the one thing that I was hoping for at Muhlenberg that didn't really happen, it was getting back to that senior management table. I thought that that was the trajectory. It didn't work out the way that I had hoped, so I was interested, when I was looking to pivot and find a couple of new opportunities, it was important for me to get a job back at the senior management level.
With 10 years of experience and some nice accomplishments on your resume that I was really helped with greatly by a friend of mine who was an outplacement councilor, my resume looked pretty good. And he taught me how to sell myself better than I was doing it before.
You look for those cultural fits that are going to work well for you. Saratoga was one of them, so back on the senior management team in an organization that was coming out of fiscal challenges, so I could see a little bit of light on the horizon for them in the way that their operating PNL and balance sheet were looking.
There was a lot of upside in going to Saratoga. Again, it may have been human resources at that time, but it was still pretty personnely.
Bonica:
So your early career was a lot of kind of making that movement from the old personnel shop to an HR service, an HR department.
Callahan:
They had had a relatively new CEO come in. And I think that he was recognizing that as well, so he was looking for a vice president. And he took me under his wing a little bit and helped me develop, pushed me in terms of my thinking, which was aggravating at the time. Why didn't he just accept what I said and let it be that way? So you're asking him all of these questions.
I came to appreciate it later on, and recognize that that was his job, was to push, and push, and push, so that performance and improvement would go up, both personally with me, as well as with the organization. That was an interesting life lesson to learn from him.
Bonica:
You made a jump in 2004 to vice president for HR for the patient care division of Northeast Health. What was Northeast Health?
Callahan:
Northeast Health was an interesting company, not for profit. Had two hospitals, one in Albany, New York. It was small, the smallest of the three hospitals in Albany. And then Samaritan Hospital in Troy, New York. They also had a number of nursing homes, a home care agency, and they started an assisted living facility adult, over 55 community, while I was there.
It was interesting, because at the time, most hospitals were buying nursing homes, but it was a hospital centric world. This is actually a bunch of nursing homes who kind of blocked the hospitals, so really odd they got very excited there about tele-home medicine, in visiting nurse MAU. And I was like, "Yeah, well we got this really cool CT, or MRI that we just bought." And they were like, "Yeah, that's good. But look at this tele-home medicine. That's really neat." So it was a very interesting experience.
They brought me in as a vice president for human resources just for the two hospitals, and the two hospitals were also just beginning to put their toe in the water of physician and climb up. It was a very new concept at that time.
It was an interesting position to be kind of the HR ambassador for the hospitals with this system, and I think the hospitals felt that it was nursing home centric, so I think some of my job was to bring more resources, focus and attention of the HR system team back on to the hospitals. It was an interesting mission.
Sometimes I tended to do more and better work in helping the system level team, than really bringing it back into the hospitals themselves. Probably not a great fit. I was there for a couple of years and recognized that wasn't that good of fit. They really did not have the job I think well-defined and it's tough to ... deliberately, you really don't know what the goal is.
Bonica:
Yeah, okay. So you did move on to Saint Joseph Healthcare Services in Rhode Island, so it brings you in New England for the first time.
Callahan:
It does. Providence was a nice place. It was time to move on from Northeast Health. I had a former colleague from Saratoga who had become the vice president for nursing there and she was a strong proponent, advocate of me going to Providence at Saint Jo's.
Another very different organization. Two hospital system, the chairman of the board was the bishop of Providence. And they kind of been old school board from the Catholic intelligentsia in the Diocese of Providence and some very long term supporters of that organization. A heath systems that was in change, used to have a 350-bed hospital in South Providence. The neighborhood changed, the pyramids changed, and by the time I got there, they weren't running any acute care patient operations out of that building.
It was a behavioral health, and it was long term rehab and they had an urgent care facility that they ran out of what used to be the emergency room. But here is this 350-bed, 11 story building, in South Providence, that we were maybe utilizing 25% of the space.
Bonica:
Oh, wow.
Callahan:
And then the-
Bonica:
That's not a good business plan, right?
Callahan:
It's not really good, especially when the building was built in probably late '40s, '50s and '60s and there was asbestos all thought it, so the cost to take it down, would cost more that the value of the land that it was on. So again, not a good business model.
Had two unions when I got there. One nursing union at each hospital, separate locals, so it wasn't the same people that I was dealing with at both hospitals. This was the first time that I had union experience. That was an eye opener to me, the-
Bonica:
HR plays a big role in these unions, right? Typically?
Callahan:
Yeah, they're really centralized in the negotiation process of contracts, but also much more in the day to day interchange between union members and their department directors, around discipline, changes in schedules, changes in policies.
We went through some layoffs at Saith Jo's as well. And they dictate the contract, dictates the rules on who goes first. And it's last in first out. Doesn't matter what the performance level is, doesn't matter really what the skill set is.
Bonica:
Well, that's a problem if you're trying to reshape the organization.
Callahan:
Yeah. I mean, it's musical chairs. If you want to do a reduction in one area, you can do that but you're going to figure out who has the lowest seniority in the entire bargaining unit, and they get to go first and then you're going to move all of the other people around into different chairs.
It really hampers your ability at a time of great change, to make change rapidly in order to achieve business goals. So, quite challenging in a business environment there.
Bonica:
You didn't stay there all that long.
Callahan:
No.
Bonica:
About two years, I think.
Callahan:
It wasn't a year.
Bonica:
It wasn't even a year?
Callahan:
It was 11 months.
Bonica:
Oh my. Okay. And at that point you actually come to Exeter Health Resources, in 2007. So what drove that relatively rapid-
Callahan:
Well, I had a phone call from the CEO Tuesday afternoon. I had been there for about five months. And when you interviewed at places at that time and subsequently, there were two questions that you wanted to make sure that you asked, which was, "Are you planning any mergers?" And I was assured, "No, we've been talking to the hospital down the street for 10 years, but that's not really going to go anywhere and nothing's really is going on now." Okay, check that box. And then, because ... it's like you don't go to an organization, you go to people, not the bricks and mortar, you ask the questions, "Well, John, you've been here for 20 years. What are your plans? How long are you hanging around for? Because I got a long time to work still, so I want to make sure that you're going to be in place." "I've been here for 20 years, I'll probably retire from here."
So on Tuesday afternoon at about two o'clock, I got a phone call from the CEO and he says, "Can I come down to your office?" That is not a good phone call to get. So he comes down, he says, "I just want to let you know, I'm taking another job." "Okay, congratulations John." "And we're looking to merge with Roger Williams Hospital down the street." "Good. Thanks very much." I've been here for five months, and I'm commuting from Providence to Saratoga Springs, I had moved my family.
So the next call was to my wife. And I say, "Stop packing, because we ain't moving." The uncertainty level was just too high. So, that's when I started to look and I was really fortunate to find the opportunity at Exeter.
Bonica:
So how did that come about?
Callahan:
It was a transition time for HR at Exeter. They had an opening after a long tenure HR exec and had left. When you look for jobs, there are certain key individuals that you build relationships with, and you pick up the phone and you work the bone, and you send out your resume and you keep an eye on the job postings with key for associates as a headhunting firm, that I've done business with on both the recruiting side and I've used them, work with them to help me find other opportunities.
And I got in touch with them and they said, "I think this would be a good match. Why don't you go up and talk to the folks up there?" It was a good match. I get along incredibly well with my CEO who I know, you know, and I've heard-
Bonica:
We've had him on-
Callahan:
[crosstalk 00:47:58] podcast. Kevin Callahan is his name and we're not related.
Bonica:
No relation, right?
Callahan:
No relation. Although you can-
Bonica:
I did ask that question when I first heard your last name. I'm like, "Is this like his cousin or something?
Callahan:
His brother?
But actually my wife said, "What's your boss's name?" when I was interviewing. I said, "Kevin Callahan." And she's, "You don't have a shot at that job. That would be way too confusing."
Bonica:
And yet here you are.
Callahan:
Nine years later.
Bonica:
Nine years later.
Callahan:
Nine years later.
Bonica:
Let's talk a little bit about Exeter Health Resources as an organization, before we talk specifically about your department and your responsibility. Exeter, in brief, what are the ... I've had Kevin Callahan on, he's already said all this stuff, but in case somebody hasn't listened to his interview, give us a brief run down of what is Exeter Health Resources.
Callahan:
100-bed hospital, about 117 years in business. A physician employment company that started 20 years ago, has now grown to 600 employees. The hospital has about 1,500 employees. We have a visiting nurse group that is up to about 150 employees.
Over the last five years we have gotten out of two lines of business. One was a for-profit fitness facility called Synergy. Had about 100 employees, so we went through closing that business and the people aspects of that.
We also closed a provider of service called Exeter Healthcare, which used to be a short term rehabilitation hospital, and a ventilator depended care unit. The ventilator depended unit had about 10 patients in it, and they were long term ventilator patients. I think the longest patient that we had as a resident there, and they referred to them as residents, was 10 years.
Bonica:
Wow. That's a long time on a ventilator.
Callahan:
It's a very long time to be on a ventilator.
The people that did that work, again, were just exceptional, exceptional people. And we had a short term rehabilitation unit, which was 14, or 15 beds. And both of those businesses really became unprofitable, to the point that the rest of the organization couldn't subsidize them anymore.
Bonica:
Does your office provide the HR support to the entire organization? Or are there separate HR entities for the other organizations?
Callahan:
We provide centralized HR for the entire organization. I do have some HR business partners that will cross companies and they'll principally support the visiting nurse group. Those are 115 employees, they need to understand that business. I have a couple of HR partners who do cross companies. So some of the VNA, they need to have a couple of departments at the hospital, some people support primary care at Core Physicians and also there's some other support departments.
I have one partner that supports the in-patient hospital procedural units, so the operating rooms, endoscopy, and she also support the out-patient practices at Core that are doing that type of medicine.
Bonica:
[crosstalk 00:51:35] What's the total population support have been about?
Callahan:
We have 2,400 employees all over those companies.
Bonica:
And is that the primary driver of your workload? Is there a headcount?
Callahan:
Yeah, primarily it's headcount. We also deal with contractors and tracking contractors that come into our organization as well. I also have responsibility for the volunteer program at the hospital. We have about 120 volunteers that come in and help us in various ways.
Bonica:
How does the HR department organized? Who reports to you?
Callahan:
Okay. I have a person that does compensation and benefits, Sue Callahan. No relationship to me, or to Kevin. Way too many Callahans there.
I have a gentleman who runs both recruitment, as well as payroll and HRIS. His name is Charlie Thomas.
Bonica:
Not Callahan.
Callahan:
Not Callahan. I have a person that supports our internal communication and our intranet, Lisa [Caracosto 00:52:50]. That's in interesting segment a function that most people associate it with marketing and communications.
We have one person that is dedicated to taking those messages that we need to get out and focusing them on the employees. Through the internet, through a by-weekly internal newsletter, how do we craft different messages that go out to our various constituencies at any one time. That is a little bit unique to our setup.
I have an organizational development person, Sue DeMarco, who has also gone out and developed an expertise in coaching, so she's certified as a coach and it's actually proved very, very beneficial for us.
Bonica:
What kind of coaching? What do you mean by coaching? Because I'm assuming she doesn't have a whistle and gym shorts.
Callahan:
A whip, a gun, and a chair sometimes.
She will come in to do executive coaching with leadership. She'll come in, she'll chat with you, she'll do a 360 kind of performance evaluation on you. You invite other people to give comments on your leadership style, it's anonymous. She shares those results with you and then works with you to develop a plan to fine tune management skills, to change communication skills, in order to improve executive performance. It's mostly ... we do it in the department at director level.
It really is management coaching, how do you be a better leader. And it's proven to be quite effective. Coaching is a new thing that's going on, and she had the foresight sector go out a couple of years ago and say, "I really would like to do this. I think that it could be a value to us." And she's run a number of coaching management development programs that were very specific and are much more applicable now as physicians on moving into leadership roles within healthcare organizations.
There's a need for a physician executive skill development. They're really, really good at the medicine part, but they don't teach you how to lead teams in medical school. She's doing a lot of work with physicians right now.
Bonica:
Interesting. Other sections? You said comp and benefits, recruiting, internal communication, organizational development.
Callahan:
I have a team of HR business partners that will go out and support department directors and their vice presidents in their line of business with HR staff.
Everything from onboarding, to doing some paperwork, to make sure that the cost get in the right place, to disciplinary and coaching matters that they have with their staff.
One of the initiatives that Sue is actually working on, Sue DeMarco, is to how to train up our HR partners in coaching techniques. So I can take one person now and defuse that knowledge to four or five other folks that do this in their daily practice anyway, but it may give them some new skills, some new thought processes, some new approaches.
Bonica:
These folks are generalists? They're generalists?
Callahan:
They're generalists, but they're not doing recruiting. So the typical HR generalist is recruiting, benefits, employee-
Bonica:
They do everything.
Callahan:
They do everything. These folks we have tighten up their scope, so that there're really employee relations and some tactical management development, and a little bit of succession in planning, a little bit of helping managers move people into the right place. Sometimes the right place is not in our organization anymore. But holding and helping those managers to achieve a level of accountability that they may not otherwise achieve.
Bonica:
So they help them do, maybe evaluations and [crosstalk 00:57:37]
Callahan:
Thoughts on evaluations, we try to line up our systems so that if you have some disciplinary action in an employee during the course of a year, that that is actually reflected on their performance evaluation. And sometimes managers don't do that. Well, that was in the early part of the year. They're much better today.
We're evaluating people for the body of work during this calendar period, so if they did it this year, it needs to be reflected. And to get them to document that, because the complexity of the legal process when you're looking to take disciplinary action or end someone's employment, really relies on a lot of documentation. You can then bring these notes to prove that you made a good faith effort to get them to improve their performance, besides the fact that it's the right thing to do to communicate clearly and effectively to employees just where they stand.
Bonica:
Can you talk a little bit about what makes an effective evaluation system? You must have seen a number of them over the course of your career.
Callahan:
Yeah. I think that an evaluation system is effective if it supports the mission vision of values of the organization.
One of the things that we've done at Exeter a number of years back, is move away from a performance evaluation system that was solely based on the duties and responsibilities in your job description, because healthcare has changed and is now a team sport. It's not an individual sport, so the way that you interact with patients, the way that you interact with your co-workers, the way you're supportive of our values as an organization.
Compassion, flexibility and initiative, creativity and optimism, efficiency in your work, are some of the values that we have. You can be really, really good at the task, but really not so good at being creative and optimistic and flexible. And those are the aspects of employees that, in these days in times with the amount of change that's going on in healthcare, you really need people that live up to those values almost moreso than being very technically competent, but poison to the team.
I'm a Yankee fan, so I can use the, "How long are you going to let Manny be Manny Rodriguez from the Red Sox?" You can hit home runs, but he was just poison in the clubhouse. The Red Sox eventually sent him off, to ... I think they sent him to Los Angeles, where he wound up crashing and burning relatively quickly.
This is how do teams work better, and that's one of the things that we're finding. And I think that we have improved the organizational performance, because we have aligned what success looks like much more with our mission vision and values than we did just looking at tasks on a job description.
Bonica:
Interesting. Can you talk a little bit about what does your compensation and benefits division do?
Callahan:
Comp looks at a number of different salary surveys. We're continuously looking at what the market is doing, so every job in the organization gets an evaluation of where their market position is every year. It's a lot of work.
And our comp philosophy is to pay at market averages. That means that some people are going to pay a bit higher than we will, and some people will pay a bit lower than we will. But we want to be competitive in the labor market.
Really both, with compensation and then in their role and in benefits, to also take a look to what benefit packages are available in the market, and develop a total compensation program, both comp and benefits, that is attractive, that seeks to reward good performance, and hopefully that, in combination with a culture and a good working environment that the department directors are providing, our employees don't think about going someplace else, so they're retiring one day.
I think that we're more successful than the rest of the market at doing that.
Bonica:
Why is that?
Callahan:
Because they think the balance of all three of those things, comp, benefits and working environment, has created a good place for people to work. I know that I am under the statewide average for employee turnover by 3 percentage points. So it's a pretty statistically ... I don't know if it's statistically significant. 3 percentage points on 2,400 employees is a lot more people who we'd have to be recruiting for if they left. If you can keep people, it just improves the working environment, and that continually training, and re-training people, the cohesiveness of the work team, is much better.
Comp and benefits really is ... their goal is to make sure that we're market competitive, but also recognize that we have a fiduciary responsibility to the organization, and to make sure that we're not spending scarce resources in areas that we don't need to, because there's always more resources needed, than we have money to spend on them.
That's their balancing work, is to get that right. I want them to cover the bottom two, or three runs of [inaudible 01:03:47] those hierarchy of needs pretty well, and then turn the love needs and self-actualization needs over to the managers that they're working with.
Bonica:
I could get used to that.
You mentioned recruiting and having to get people. What is it like to try to find people to fill your jobs? And you have a pretty wide range of jobs that you have to fill.
Callahan:
We do. Yeah. I mean it's everything from food service and housekeeping jobs, to orthopedic surgeons, radiation therapists, nurses. We have a lot of different job descriptions that are out there that we're tying to cover.
It is challenging. The demographics of the employment marketing in the seacoast are changing. The first thing is the employment is probably at or near historic lows. Hew Hampshire's unemployment rate is 3% right now. The national unemployment rate is 5% and I've heard, I haven't nailed it down, but I've heard people say that the unemployment rate on the seacoast is about 1.6%. That candidate pool is not very deep and I want to be diving into that.
And the other part of the demographic is that Southern New Hampshire especially is getting older, so the in-migration from Northern Massachusets has pretty much stopped. That was the New Hampshire advantage for the last 20 years. And the people that are moving in, are moving in to 55 and older communities. They are not candidates for the positions that I have open, or they're not candidates for long term employment with us, is they're interested in working.
It has put a lot of pressure on recruitment and kind of up the line to me, to figure out what the training streams are of younger people coming out of school, or to sponsor training programs, from which we can get employees either right out of training, or ... Actually we're doing a model now with Great Bay Community College, where we're hiring people and paying them to go to a 12 week medical assistant training course that in cooperation with the Great Bay Community College we designed. It was an associates degree full two year program. We got them to do it in 12 weeks, Monday to Friday, nine to five, eight weeks in a classroom, four weeks in a physician's office doing clinical rotations. And we pay them to go to school.
Little bit expensive to do it that way, but there was no other market out there that I could recruit from. And Core Physicians is expanding tremendously in the model of care and their physician's office is changing, so we need well-qualified, well-trained medical assistants.
We've been running the program with Great Bay for about two years, and we have 35 graduates of that program, and I think 33 of them are still with us, in a time when medical assistant turnover and the state is running at 20%.
Bonica:
That's pretty good keep then.
Callahan:
Yeah, that's a good keep.
We're going to have to get into doing things differently than we have in the past, beyond just putting an ad in the Sunday paper and seeing what paper applications come in the mail by Tuesday. We're looking to use social media, we're looking to use LinkedIn, we're on all of the job boards. You can't get a paper application at Exeter anymore. It's all online
Bonica:
Right. I wanted to ask you a couple questions about your talent management. I guess that would fit into the organizational development side of things. How does Exeter develop leaders, people who are going to step into supervisor, management and upper management roles?
Callahan:
We have a new manager program and we just kicked it off yesterday. We invite new managers who we've recruited to the organization, to come into a nine session program, where we teach them mission and vision values, we teach them what is important to us from a leadership perspective, what we expect of them. We teach them about human resources rules and regs and philosophy. We teach them customer service training skills, then we're goin to be teaching and have taught their staff, so that they're all on the same page with that.
We teach them about the development of lean thinking in the Toyota Production System, which we're heavily invested in. So how do we get them to engage their employees in helping the employees improve their work processes. How do we make sure that they're creating an environment of psychological safety, so people can raise their hand and say to a nurse, or a manager, or a physician, "Hold on just a second. I don't think this is the right thing to do. Let's take a timeout and let's think about what we're doing before we make a mistake."
We're a hierarchical organization, much like the military, and we have taken some concepts from military aviation and from the aviation industry and developed, and actually used a program from the Federal Government called Team Steps, that teaches people how to communicate the way that pilots do in a cockpit, so that there is clear communication, so that no one is afraid to provide mutual support, and to keep other people out of trouble.
We teach that. That is going to be probably the next training initiative that we have as a development of psychological safety with all of our team members, because we know retaliation is a big deal in the workplace now. People don't want to raise questions or problems because they're afraid of what the retaliation is going to be. And contemporaneous last night, two young women came forward and said Donald Trump did things to them. Why didn't they report that? Because they were afraid of what the retaliation was going to be. It really is a probably more ramped in society than we want to know, to think some of the walls on that have come down, but it's still something to be concerned about.
So that and a number of other things we provide the new managers coming in. And then we also invite existing staff who may have expressed an interest to their leaders if they want to get in on this. It's a big investment of their time, to get this training and understanding. It's great for us, because if they're staff now, they get to go back to the unit and they go, "Now I understand what they're thinking about." What is the context that we're doing this in, how can we get them to accept roles as change managers within their units, before they're ready to step up.
That has been a good program. We've been running that for probably six years, generally twice a year, sometimes three times a year.
Bonica:
Do you have a systematic way of identifying future leaders and identifying talent that could potentially step up?
Callahan:
It's a little more informal than maybe I'd like it to be. We actually had a process a couple of years ago, where we asked department directors to talk to the top performers in their areas, so going back to our performance evaluation process, talk to the top 40%, everybody who is rated as an exceeds expectations. And just ask them, "What are you looking for? What can I do to make you more engaged here? Where do you want to be?" And we found that probably about 50% of the people said, "What you can do for me is leave me alone. I just want to do my job and I want to go home, and I want to play with the kids and the dog," and it's great, we're all good with that.
We had another group that wanted to advance in management. One of the problems that we had is we don't have a lot of leadership positions come open. When you have 20% of your top performers wanting to be the boss one day, and I'm the boss and I'm saying, "Got to tell you, I am not going anywhere for another 10 years," and they go, "So what else can you do for me?" It creates some challenging conversations with the department directors, because what am I supposed to say to them now?
You can train them up, they could go to another organization, but this is a marathon, it's not a sprint. So what would be wrong if, one of your really good people goes away to another organization for a couple of years and then comes back when there's an opening? Now they're now stepping up as a staff member into a leadership role. Now they're transferring when they've had an opportunity to practice their leadership skills. It wasn't with us, but now they can come back as a more developed leader.
Bonica:
Do you see that happening? Do you have a lot of boomerangs? Is there anything that referred to-
Callahan:
We do. We have some people who have come back, who have stepped up. We've had a couple of people come up from internally in our ranks. In fact, our current vice president for acute care services, we actually figured out that she was really ready to make a move up to vice president.
She was a department director before, and our vice president of acute care services at that time, had the top performer chat with her and said, "Where do you want to go?" And she said, "Well, I want to sit in your chair. And I've actually interviewed a couple of places. I haven't gotten the job, but that's where I want to go and I want to go pretty soon." She says, "Oh, well, thanks for letting me know, because I'm looking to leave in about four or five months."
So internally, we developed a high level executive, who had great reliability because she had been at the front lines of leadership for 10 years. So all of a sudden the troops know who the vice president for acute care services is, because they worked with her for 10 years. It was a nice success story. She's done very, very well.
Bonica:
What do you find most challenging as the vice president of human resources for Exeter Health Resources? What's the most challenging part in your job?
Callahan:
It's something that we've dealt with a lot in the last five years, and that's the pace of change. One of the things that I asked these new leaders yesterday, many of whom had been with us for a while, when I ran a session yesterday I said ... change is tough, people don't like change. I said, "How many people have parked in the same parking spot within a spot or two? How many people do that every day when they come to work?" 80% of the hands in the room went up. I said, "Now you understand how difficult it is to change."
And you think about all of the changes that have occurred in medicine, not only in the provision of care and the technology and the improved outcomes we had with our patients, but in the finance end, in the business end, just in the last five years since the Affordable Care Act came into being. And we really required physicians to use computerized electronic medical records. The changes are vast and they are very, very fast as well as being vast.
We as human beings don't deal with change really well, so we had to focus on how do we get our leadership to explain the context in which we're operating as a business in the provision of care, and get them to communicate that down to the front lines of, "So, why can't I park in the same spot that I've been parking at for the last 10 years?" And unless you're good at providing that context, that frontline employee is going to be at sea as to, "Why do I have to change my parking spot? I really don't understand."
That's probably the biggest challenge we've had in the last five years. And I don't see the change slowing down very much. I think back 35 years ago, maybe 40, my dad had his gallbladder out and he was in the hospital for a week, and he has a scar that went from one side of his belly to the next. And he was out of work for a month. And two years ago, I had a gallbladder attack, and I went to our emergency room, and they used a little hand-held ultrasound machine and said, "Yep. You have gallstones," and the surgeon came in and said, "You need to get them out." And I said, "Okay, as long as I'm here." I was in the OR at one o'clock in the afternoon, and I was returning work emails from my smartphone in my hospital bed, at about 6:30 that night. And I was back to work in four days after I had my gallbladder out. But I was doing work my hospital, through the surgeon that took my gallbladder out that night.
It's just incredible when you think at the technological advances that we've made in medicine.
Bonica:
That is amazing. And I think we are going to see a lot more change in very near future. Speaking of change, how do you, as a member of the senior executive team, what's your role in the organization as ... excuse me. What's your role on the team? Working with Kevin Callahan, your CEO, you said early on, you saw HR as kind of being a professional nudge. Do you still see yourself in that role a little bit, or is it something else?
Callahan:
I do. One of-
Bonica:
How often do you get to tell Kevin he doesn't have any clothes on? I kind of want to know about that.
Callahan:
He's normally well-dressed, actually. And sometimes he has that chat with me. It is because he is an extraordinary thinker and he thinks much further ahead than the average CEO that I've worked with, who isn't about meeting the numbers this quarter, but sometimes could get close to that.
Kevin is really thinking four or five years down the road. Sometimes I have a hard time keeping up with where his view of the healthcare system of the future is going to be.
But I get to sometimes play, asking the stupid HR question between how does this initiative line us up to where we want to be three years down the road. So it's a tug between the strategic and the tactical, and what do you want to do and in what sequence you want to do it.
And then we're really good at coming up with plans, and documents, and measures to improve. So how do we hold ourselves accountable? And sometimes you get too focused in on the numbers and you don't take a step back to say, "Well I've achieved this number, but what does that really do from a strategic perspective to move the organization further down the road?"
It's a constant tug back and forth, because I said before, there are many more needs than there are resources available. As a senior leader, you're always trying to figure out what do we have to do now and what can wait. And we've gotten into some ocean of planning, which is all around what are the vital few things that you have to do.
And it's much harder to figure out what you need to take a pass on, than it is to figure out what you want to do. We're constantly saying there's too many things on the list.
Bonica:
I want to just ask you a couple of quick questions about leadership, as we've gone fairly long. A couple of quick questions about leadership. What would you say is your leadership philosophy? Encapsulate it in a few words.
Callahan:
I think at this point in my career and at my level, it really is to empower the people that work for me, to think creatively towards those big picture goals that we have. And to a certain extent get out of their way. I have smart people, they want to contribute, and I could probably come up with all of the answers, but it wouldn't be engaging to them and it's more fun to ask them questions and watch them think through all of the permutations and contentiousness themselves, and help get a good plan.
And, as you get grayer around the temples, you maybe get a little bit wiser, and let those folks at the front lines have a little bit of fun, because they're going to be much more invested if they own the work and own the process than if I were to impose it on them.
Bonica:
How would you say your leadership style has changed over your career?
Callahan:
Early on you're much more tactical, in smaller organizations, in roles that are much closer to the front lines, so you need to be tactical. So you work your way up the ladder, I think that you can be more strategic and do good work through other people as opposed to doing it yourself.
Bonica:
How was that adjustment for you? Because you're a leader of leaders now. At one point you probably were supervising yourself ...
Callahan:
Yeah. It was chief cook and bottle washer when I started out.
Bonica:
What were those steps like, as you first, you were supervising, then you were supervising supervisors. That move from supervising to supervising supervisors it's often a difficult transition.
Callahan:
It's hard to let go, because there are some trust levels, so you need to make sure that you trust the person that's doing the work, but it's a whole lot easier to take an objective look at someone else's work, than it is to take an objective look at your work.
So as I've come into organizations where I had additional resources underneath me, it's really fun to take that role and you will fall into a teacher and a mentor, much more than a doer, which is a lot of fun.
Bonica:
Can you give an example of a leadership lesson you maybe had to learn the hard way?
Callahan:
I talked a little bit before about some of the fit issues in cultures, when I was looking to join another organization. And those fit issues are really tough. I haven figured out how to make perfect knowledge yet, so that I can make great decisions on which teams I wanted to join. Certainly the team I'm on now is a great team, so to some extent I'd rather be lucky than good. But there are some challenges when you get into a situation that you have misread in terms of what you thought the job was, versus what they thought your capabilities were.
It's really work hard at finding out what the real culture is when you're joining an organization. Wander around, sit in waiting rooms, sit in the cafeteria, and have a critical eye. Sometimes you really want to get out of where you are, and you would really like to join any other organization, and you have to just take your time and make sure it's the right fit.
Bonica:
As a director of HR, a vice president of HR, you've had some unique opportunities to see where people fail. Where have you seen leaders fail and what lessons would you take from that?
Callahan:
Where I've seen leaders fail is generally not in their technical competencies. It's in how they interact with other people and other team members. It is the ability to influence others and get them to see things that they can't see right now as opposed to dragging them there kicking and screaming. That really is the difference. The ability to work well with others is really critical in the executive suite.
There's aren't really many executives around anymore that are banging shoes on the table and saying, "You're going to do it my way or the highway." That's where people historically have failed. They have got in front of, or behind key constituencies. Board, medical staff, their peers, the employees that they're leading. And there's a big gap and it just doesn't end well.
Bonica:
Same question, but focused on early careerists. Our program here is, we're training young folks, undergraduates in particular, to go into the healthcare administration field. Where do you see young folks come in into the field have their struggles? Maybe not completely fail, but where do you find them getting taken aside and saying, "Hey, you need to be redirected."
Callahan:
Yeah. Young people coming into leadership positions are placed in a very challenging roles, because sometimes they're leading old people like me, who have been parking in the same parking spot for 35 years. And you're 23 years old and you're going to tell me how to do it? I don't think so.
The adoption of some of the lean philosophy principles about honoring the frontline workforce and empowering them, and engaging them in process improvement, is probably a key skill, because you're not going to get those employees to move from positional authority. Those days are dead.
Bonica:
Back to your three credit lesson on authority and pos-
Callahan:
Oh, absolutely.
Bonica:
Authority and influence.
Callahan:
I think that would be a good style for them to adopt. It's much more a questioning style. "Tell me about," is probably the two best words that they can utter so that they're learning from people. I call it, "Ask me the stupid HR question."
Bonica:
You've had 30 years of experience in healthcare, in human resource management. How is the field of human resource management changed? And specifically how have the changes in healthcare changed and affected the practice of human resource management in the healthcare industry?
Callahan:
I think that the fact that we're much less tactical than we are strategic at the senior levels. I think there is a much deeper appreciation within executives all throughout the organization about the impact of culture, about civility in the workforce, and getting the best out of every team member to improve the delivery of care at all levels. The breaking it down of hierarchies is really important, so allowing housekeepers to raise their hand when they see something wrong on a nursing floor is critical.
But we still have to understand that those housekeepers still probably have a view of the world and their place in it, that is not as important as they think that it is. It's how do we treat each other with dignity and respect, in addition to the fact that it's the right thing to do, but in order to harness the experiences of everybody who comes into your workforce.
I think we have a much better appreciation for that now, certainly than we did back in the day when you just did what the doctor said. As I prepared for this, I just thought back 30 years ago, to some of the things that were quite common place in hospitals that I worked at early on. They just would not fly today, not in a New York minute.
Bonica:
If you had to pick one book that an early careerist healthcare administrator, who's aspired to be a senior leader should read, what would you recommend? One or more than one if you'd like.
Callahan:
I prepared for this question. I had to think about it a little bit. Actually there are two, and we had talked a little bit earlier about a book that was interesting to me that's called Into the Storm: A Study in Command. It's actually a Tom Clancy book, and he wrote it with General Fred Franks. It's a great story of growth and development in the armed forces and the execution of training, right through the development of work planning and execution. It's really quite interesting, and I've actually learned a lot from it.
The second book is a little bit heavy, but it's Team of Rivals by Doris Kearns Goodwin.
Bonica:
I know that one.
Callahan:
Just a fascinating view of Lincoln and his management genius in how he worked to preserve the Union and worked with a team of rivals, people that he was running against for the Republican nomination for the presidency, and got him into his cabinet, and how he held that group together for eight years. Fascinating read. It's awful heavy that one. It's about 700 pages. It's not a [crosstalk 01:32:40]. It's a good book.
Bonica:
That's a good book. It's great, I agree.
Let's close on this. Again, for my students who are getting ready to head out into the healthcare industry, why should they look at a career in human resource management within the healthcare industry? What's particularly rewarding about it you think?
Callahan:
I think that if you're not focused on a clinical career, if you're not one of the STEM people, and I'm not one of the STEM people, so I feel sidled sometimes at the emphasis on science, technology, engineering and math, because I ain't one of those.
Dealing with people and helping them achieve their potential is a lot of fun. Doing it in an industry that is by its nature helpful and healing, brings a joy to the work that you may not get in hotel hospitality, manufacturing, accounting or fiscal services.
They may be a little bit more lucrative, if you catch the right wave, but you have to like what you do at the end of the day and there are a whole lot more good days than there are bad days, especially at Exeter right now.
Bonica:
Great. Thank you so much for taking the time to talk with me today.
Callahan:
It was a pleasure to talk with you and I hope it's a value to your students.
Welcome to The Forge, Chris.
Callahan:
Thanks Mark. It's great to be here.
Bonica:
You went to King's College in Wilkes-Barre, Pennsylvania, and you studied economics and government and politic. What drew you to King's College, and why the double major?
Callahan:
Actually my dad went to King's College and it was ... so that's the first reason to apply. But the real reason I went there was the size and the reputation. It's a Catholic college, it's run by the Holy Cross fathers who run Notre Dame. We are one A to Notre Dame. You get into Notre Dame when you get into King's.
Bonica:
You said you liked the size, was it-
Callahan:
It was a smaller college. There was probably about 1,000, 1,200 students that lived on campus and probably another thousand from the Wilkes-Barre area.
With a small size, you really got to do a lot and get involved in leadership roles, which was important in retrospect, looking at the ability to take on a leadership role. You didn't have to jump through a lot of those flaming hoops. If you wanted to, it was available to you and I was able to do a number of things there.
The double major, when I went to college, I was really thinking about law school, I was thinking about public administration, so that was were the government part came from. Once I got there, I took a couple of economics courses and thought that it was a good foundational thinking for other business aspects, so I was able to pick up that as a double major after I got there.
I also had a minor in philosophy, so-
Bonica:
Wow. Well, you were all over the place.
Callahan:
I was well-grounded.
Bonica:
That's great. You went to the George Washington University shortly after graduation.
Callahan:
Yes. I went right from college, right to graduate school. I knew that I wanted to get in the hospital administration, healthcare administration. I didn't have any clinical background, which was problematic to get in an operation environment and I knew that I wanted to be in leadership at some level, so I just jumped right it.
Bonica:
You came to your undergrad thinking law school maybe. At what point did you make that shift to say, "I'd rather be in administration, and specifically in hospitals?" How did that come about?
Callahan:
Probably sophomore, junior year. I was influenced, again, by my dad, who was on the board of directors of a local hospital. He'd became the chairman of the board, and actually his day time job was the Office on Aging administrator in the country that we lived. And his office happened to be in another hospital, so I was exposed to a lot of hospital work.
It was late '70s, early '80s. The health care was still an expanding field. Medicare and Medicaid really weren't that old at that point, so there was emphasis still on growing access to health care services. And I got to see things through the board chairman's eyes as we were having adult beverages on the porch every once in a while.
So he got me interested in it, introduced me to a couple of folks that were in the field. I was lucky enough to be able to chat with them, get some guidance on programs. George Washington came up a couple of times, a larger program that was willing to accept people without real world experience, and as part of their program, they had a year long administrator residency. So they actually put you in a hospital, you were in DC for about 18 months, and then a full year doing an administrator residency in a hospital.
Bonica:
Where did they send you to do your residency?
Callahan:
I went to Mercy Community Hospital, in Port Jervis, New York. It was a smaller hospital in the rural part of Orange County, although Port Jervis was kind of a small little city.
It was great for me, because it was about 20 minutes away from where I grew up, so I didn't have to worry about housing and meals and all of that stuff. I just went home, which was great.
Bonica:
What was that experience like for you? First time, really working. I mean, you had some exposure to a hospital through your dad, but now you're in the thick of it. What was that like?
Callahan:
Well, it was a very interesting place. Catholic hospital, I showed up on the first day of merged operations, where the Catholic Hospital had purchased the Doctors Proprietary Hospital, which was ... the Doctors Hospital was about 35 or 40 beds. It was literally three blocks away from the Catholic Hospital that it was about a 150, 160 beds.
So, showed up on the first day of merged operations and they literally didn't had a letterhead. They had to x-out, I'm dating myself now on a typewriter, they had to x-out Saint Francis Hospital and type in Mercy Community Hospital.
The first year I was there was very interesting from a cultural perspective, because you're merging two very, very different cultures. And what I found there is, in a small hospital, in a small town, you almost have to have an enemy. So you're always ... there's an, "Us" and a, "Them." In that town, it was always Doctor Sunnyside Hospital versus Saint Francis, and Saint Francis versus Doctor Sunnyside. And now, all of a sudden you are merged and we're supposed to play on the same team. It was a great learning lesson for me in merging cultures. Now you take a look back, the merger mania is still going on today.
Bonica:
It seems to be picking up even at this point.
Callahan:
It is. Certainly I think it is.
The administrator residency that I was able to do was great, because I just had the ability to wander around the organization for a year, and find out how different departments work. I did rotations for four, five days in the operating room and gowned up. They didn't have me do any cutting, but in a non-teaching hospital, the doctors still loved to teach, so I was teaching material, and it was like, "Hey, come on over here and look at this, through this scope."
And it was fascinating from the medical aspect, but then you got to see how all the departments interacted, and how dependent they were on each other, and how siloed they were from each other.
It was a great experience to get in and do that. I was also focused in a couple of project areas back in the day, the personnel department was one of them.
Bonica:
Was that a thing, they said, "Hey, we want you to go work in that area for a bit?" That's part of the residency initially?
Callahan:
Yes. They had a couple of projects that they wanted to be done in personnel at that time. And it was an unsophisticated operation, run by good people, but they were not well-trained in either personnel, it was kind of OJT for them, nor in management planning in just kind of big picture thought and strategy. Really it all was very, very tactical, very, very short term.
Bonica:
And this was common in that time period.
Callahan:
Very common.
Bonica:
It was not unique to that organization, right?
Callahan:
No. Personnel was a filing system operation. There wasn't the sophistication in terms of behavioral interviewing, background checks. The office and the inspector general and all of the federal regulations around hiring just weren't past yet. It was a much, much simpler time, not always for the good.
But in this particular organization, they had also affiliated with the sisters in Mercy Health Corporation at Farmington Hills, Michigan just outside of Detroit. They were buying some consulting services. In fact, the administrator was a contracted employee from SMHC, who had taken over. He was actually the first lay administrator that the organization had. It had been all nuns before that. In fact-
Bonica:
That's a big cultural change too then, I guess.
Callahan:
It was a huge cultural change. And it actually taught me a lot about power and authority, which I remember at George Washington was a full three hour course on the difference between power and authority in short term hospital administration.
And I remember sitting there calculating how much I was spending in tuition to listen to this guy talk for three hours on the difference between power and authority. And in my first job, I found out and I reflected back on that, because I had no clue. I thought if you're the CEO, you were in charge. And it's certainly in healthcare that is not the case. You have to be very careful of which way the winds are blowing, or your boat is going to get swamped.
Bonica:
What's the 30 second summary of the three hour course on power and authority?
Callahan:
That there is a huge difference in just because you have a title, doesn't really mean that you're in charge. You have to understand where the board is, you have to understand where the medical staff is, you have to communicate well with the employees and you always have to work very, very hard to get everyone moving in the same direction, at about the same time.
If there are cross-currents that develop when you're sailing through those waters, you better have a life jacket on, because the seas can get pretty rough.
Bonica:
You finished your residency and you stayed on at ...
Callahan:
Yeah, this is part of the power versus authority thing. In early December, the administrator and the assistant administrator, who was my preceptor, didn't see eye to eye, and the assistant administrator was asked to leave. And this was 160-bed hospital, and there weren't enough hands there to keep the ship going. A year into a merger, we were just starting about a $25 million construction project, which back in the day was a huge slug it out.
The administrator asked me to stay on for a couple of months and just help him out. Given that I had no job offers at that time, and the realer the range of options, that seemed like a really good idea to me. So I stayed on for three months and helped him out and at the end of that period of time he said, "I really need help in HR, so could you be the assistant administrator for human resources?" And I said, "Yeah, I'm in."
Bonica:
That was kind of a life changing, or a direction setting moment.
Callahan:
It was. I really, at no time in my preparation for earning a living, did I ever sit back and think, "I want to be a human resources executive one day," but I fell into it.
Bonica:
I think that's a common story, right? Had you had any course in it? Did George Washington teach an HR course at that point in time?
Callahan:
Not a one.
Bonica:
Because it was still that personnel kind of orientation-
Callahan:
Traditional personnel. There is a little bit of group dynamics and organizational development type course that is probably standard for your students today. My high school daughter is doing project work and figuring out who's the lead and who's a follower and what makes an effective team. It was kind of cutting edge stuff back in the day, but I learned by making a lot of phone calls to our labor lawyer in New York City, I read a lot of periodicals, a lot of journals.
American College of Healthcare Executives was the professional association that I was joining at that time, and they had a number of HRE type deep seminars that were three, four days long. So I made sure that for the first couple of years of my professional life, that I got out and made that investment in myself, to go to these professional learnings.
I also picked up every free journal that there was in the whole world, so I was on every lawyer's free mailing list and was able to pick things up pretty quickly, and then figure out how to apply them at work and make it work.
The other fun thing was that I had no preconceived notions, so I often talk today about, "I'm just from HR so I can ask stupid questions." And I ask stupid questions, because I really didn't know. And when I got some answers back, why we did things the way that we'd always done them, that's doesn't seem to make a whole lot of sense anymore, does it? And people will go, "Yeah, I guess the underlined motivation for doing that has actually gone away now." So, why do you still do it?
First couple of years, I also felt it was part of my job to tell the emperor that he was naked. And that has been over the years an evolving role for HR, to be the truth teller to power.
Bonica:
Can you give an example of what kind of an issue would HR step in to deal with and help the-
Callahan:
Well, it would be really anything from an operational perspective, or a strategic perspective. I felt it was really my role when there was a group thing going on, that this is a really a good idea, and all the heads around the table were nodding, for me to ask the stupid questions. "Do we really want to do this?" And just push a little bit back, and hopefully get somebody to think, "Well, maybe there's another way," or," Maybe there's another time," and, "Maybe this is not the right sequencing for this."
Bonica:
Would you say that's you, personally as a leader in your leadership style, or is that something that seems to go with the field? Or both?
Callahan:
I think that I naturally was a nudge and did that. At a really expensive university of Michigan Graduate School week-long intensive course with some of the gods in the HR field, Brocklebanks and the Dave Ulriches of the world, I subsequently learned that that was one of the six, or seven emerging skills in HR that you needed to have and in their rubric of what a professional HR group looked like. I was ahead of my time, but I just didn't write the book.
Bonica:
So you stayed with Mercy for a while, and then you left in 1987, to be the director of human resources at Methodist Hospital in Philadelphia. How was Methodist different as an organization, from Mercy?
Callahan:
Very urban, South Philadelphia rocky territory. It was ethnic, it was urban, much larger than Mercy. It had a nursing home attached to it and a visiting nurse group. I got to work in a couple of new areas from a healthcare delivery perspective. Certainly the racial and ethnic makeup in Philadelphia is very different than Port Jervis, New York. That was a new experience for me.
Bonica:
As a leader, or just culturally you hadn't been exposed to that?
Callahan:
Culturally I really hadn't been exposed to a lot of different ethnicities. I grew up in Northwestern New Jersey, which was very white, or more cows than people when my parents moved to Sussex County, New Jersey. And then I went to a very similar experience at King's in Wilkes-Barre. So when I went to Washington for the first time, my eyes were opened and I realized that the rest of the world wasn't white, Irish and Catholic.
It was very interesting and I think it was good for me to get into a multiethnic, multiracial environment. It wasn't challenging at all. It was actually a little bit more fun.
But we had challenges in Philadelphia about recruitment. There were 65 hospitals in the city of Philadelphia when I was working there. They have probably 25 or 30 now, so it was tremendously over-bedded. Lots of neighborhood hospitals, lots of religiously sponsored hospitals. And we went through a couple of challenges with recruitment.
We also had some turnover in leadership right after I got there, that presented some interesting political challenges. And it was a challenged hospital fiscally. Reimbursement changed tremendously during that period of time. It was the beginning of the HMO era, where you stopped doing lots of things to patients, and all of a sudden your volume dried up.
Bonica:
And also the government reimbursement shifted from cost-plus to DRG at that point. Was that [crosstalk 00:19:24]
Callahan:
Yes, that was about '83, '84.
Bonica:
Yeah, that's true, okay.
Callahan:
But it really stared to ripple through at that time I think.
Bonica:
Yeah, I'm sorry. So we're still in late '80s here.
Callahan:
Yeah. But there were a couple of major payers in Philadelphia and preferred provider organizations, and HMOs really started to take off at that time. So your utilization dropped off the table and I needed to become relatively quickly a downsizing specialist.
Bonica:
Did the hospital go through a downsizing?
Callahan:
We went through probably three rounds of downsizing when I was there.
Bonica:
I wanted to ask you about that. How was that process like from the HR perspective? Because it's part of normal business ... well, not normal, normals look strong, but it's a thing that you will deal with if you're an HR professional. That's something-
Callahan:
In these days and times you will. At that point in time, again, healthcare had been in a growth and expansion mode. This was really the first pullback and the first realization as a nation, that oh my god, we're spending 10% of our gross domestic product on healthcare. That's going to squeeze everything out and there will be no more money left for infrastructure and anything else. Of course, we now spend 18% of the gross domestic product on healthcare.
Bonica:
If we'd only get back to 10%.
Callahan:
It looked pretty good.
This downsizing was new from the HR perspective. From the culture perspective, hospitals, especially religious hospitals weren't run very efficiently. There was a lot of mission in these hospitals, so you found yourself employing people in entry level service positions, at housekeeping, at food services, and you found yourself really being the employer of last resort. It was great from a mission perspective. It was really not very good from an efficiency perspective, and it made it all the more difficult when you had to let people go, because you just didn't have the money anymore.
Bonica:
And if you were the employer of last resort, where were they going?
Callahan:
Where were they going to go? It was challenging to be in on the business determination that this turnover doesn't look like we're going to get where we needed to go with people leaving on their own accord, or retiring. And we got to do something within a pretty short time frame. The hospitals at that point didn't have a ton of money sitting on a balance sheet someplace that they could take their time. They were worried about what was the operating margin looking like this year.
You had to move much more quickly. And when you came up with the determinations of what the number was going to be and then figured out which departments were going to get cut, you really weren't dealing with people who had been there just a short period of time. You're talking about people who had been there for a long time.
I remember having to eliminate a class of employees that were nursing assistants when we were doing some work in Methodist. And the vast majority of these almost all women, had been at the hospital for probably an average of 22 to 23 years. They were all high school prepared, or GED. They didn't really have certifications, or licensure. They were paid very well for their level of education, they had a full benefit package, they had pensions, and most of them were African-American. There were a number of sleepless nights before I went in and I figured that I had to do the chat with each one of them along with their manager, to let them know that we had to let them go today.
It was gut-wrenching. It was horrible, because I knew that I was sending these folks off and that their employment prospects were not good. And if they got a job, it would be nowhere near the rate of pay that they were getting with us at that time.
Bonica:
From a macro perspective, is that just a change in the economy that was happening in that time? Or was it specific to hospitals?
Callahan:
It was really specific to the hospitals because of the HMO movement. The reduction in length of stay, getting patients out of the hospital sooner, and it was cost driven. At that point healthcare insurance premiums were going up 10, 15, 20% every year. And people thought it was bad then, but 10% on a very low number isn't really a big number. 10% on a premium now is a very big number. We're back systemically that 4, 5% inflation in healthcare premiums overall. But it's a very big number, so it takes a big bite out of your benefits budget. Back then it was moving patients out of the hospital much quicker.
Bonica:
So the industry was changing and that was just-
Callahan:
In huge ways. Yes.
Bonica:
And then these folks who had been employed, like you said, it was kind of an employer of last resort now, were going to be sent out to the economy, to opportunities that just weren't the same.
Callahan:
They weren't. You look at how does that impact you as a person, and then what is your role in guiding the business to make sure that you don't overbuilt, you don't over-hire, because in the back of your mind you know that you're going to be the one that's going to have to sit with these folks, and it is a very different perspective when you're up-close and personal to these folks. And cry along with them, because this is the end of something really good in their life, and you just don't want to go back there.
You look at every trick in the book that you can come up with, to prevent that from happening. Early retirement programs, I got to be an early retirement program design and execution specialist, buy-outs, they were outside of pension plans incentives for people to leave, so I didn't have to replace them. I got pretty creative in finding ways not to have bad conversations with people.
Bonica:
Yeah. So that's something that stuck with you since then?
Callahan:
Yeah, absolutely. And in the last couple of years, I've actually had to go back to the bag of tricks as we have gotten out of business alliance in Exeter Health Resources. I've actually turned the recruitment department into an outplacement department. Probably for a period of years we were looking to close a long term care facility. It was not one of those things that we could go, "Hey, Monday we're closing." We had to give six, eight months not just to the state, we had to give notice to patients and their families, we were responsible for transferring these patients to an appropriate level of care.
The tricky part was, I had to maintain staff in place to do that, with them knowing that really at a point in time, not that far out in the future, they weren't going to have a job anymore. You had to employ a new set of tricks, not only to get them to leave, but get them to leave at the right time and not too early.
Bonica:
Right, because you had to maintain staffing as long as you had patients and-
Callahan:
Absolutely.
Bonica:
[crosstalk 00:28:13]
Callahan:
This was kind of that transition to how do we get them to other places in our organization. We had 2,400 employees and in a couple of points during the last five years, we've been down to 2,100. So we had to close a couple of businesses and get out of those lines of work.
But from the HR perspective, how you have people leave your organization is almost as important as how you bring them in. Most of our employees live within 30 minutes of Exeter, so they're not only our employees to a large extent they're our customers as well, so we get to care for them, we get to care for their families, their extended families.
We're not just treating a human resource, we're treating one of our neighbors. It's a very, very different view of the world that you need to take as opposed to any large multinational company, who is going to close up a factory and move off to South Carolina, or Mexico, or China. You don't have to deal with those people anymore. You're up, you're done and over with.
We can't move the hospital. We're there because that's where the people are. It gives it a very, very different view. You have to be much more humanistic than a kind of business school cut and dry.
Bonica:
In the years you were at Methodist, how was the HR field development? It seems like there's a lot of change there as well. When you came in at Mercy, it was kind of more of a personnel department. From the time you first came into the field through here, was there a lot of change going on in terms of how HR was viewed?
Callahan:
It was starting to become a bit more sophisticated. It was becoming the norm that the HR leader sat at the executive table and was part of the senior executive team. I had that at Mercy. When I first went to Methodist, I reported to a vice president who was on the senior executive team. In part of the turnover in the changing of the guard at Methodist, within my six to eight months there, I ultimately wound up reporting to the chief executive officer, so I became even with the director title, I became part of the senior management group, which was something that I was very interested in helping to run the business, not just run the HR department.
Actually, I think in my first three jobs I changed the title of the department from Personnel to Human Resources. That was kind of interesting. The sign makers really enjoyed it when I went someplace, because they got some business.
Bonica:
In '93 you moved to Muhlenberg?
Callahan:
Muhlenberg.
Bonica:
Muhlenberg Hospital Center in Bethlehem, Pennsylvania. And this was now to take the director of human resources.
Callahan:
Yes. Jumping out of South Philadelphia, they were having continually financial pressures, and it takes a toll on you to work in an environment where you really don't really have any resources. And I've done that for six, six and a half years and it was just time for a change.
Muhlenberg was a bit different in Bethlehem, kind of a newer, smaller hospital. Had a very active psychiatry program, which was interesting. That was new, to work in behavioral health. It also had a long term rehab hospital attached to it in that corporation. So again, I was exposed to different care settings, and that was kind of fun and exciting.
Bonica:
How does that affect the work that you do, to have a different care setting, to have a rehab hospital versus acute care facility?
Callahan:
In many environments, these care settings are in different buildings. They come into the organization at different times, and they have different cultures. One of the fun things and one of the advantages I had in human resources, is the masters in health services administration. So really the masters in operations of a hospital.
I was able to come at a department's problem, or an organization's problem, actually knowing how it runs, which was a huge advantage for me when I would interview, because I was both the HR guy, but I also knew how the place ran and what the relationships were, what the handoffs were.
When I got to a place that had some new care settings, it was just a learning opportunity for me to see how that place actually ran, what the business was like, what the handoffs were like, with the operations, how that was like. That was kind of fun for me and then I was able to apply different HR tools and different approaches, based on the different settings of care.
It's like being a general car mechanic and working on a Volkswagen, and then a Mercedes, and then Chevy all on the same day. It was intellectually, I think, rewarding to play in those different care settings.
Bonica:
At that point you had about 10 years of experience in the field. How did you feel about your expertise at that point, and what was new, was were you learning as you went into that new assignment?
Callahan:
Some of the new care settings. Even though Bethlehem was 60 miles from Philadelphia, it really felt like a very different world. The payers and the incentives for those payers were very, very different. The level of sophistication of the HR department was not contemporary, so there were things that they were doing there, that were kind of easy fixes. You got a couple of quick wins, which gave you a little bit of wind in your sails, it pumped up your credibility a little bit. It was good to go in and find some of those things.
One of the advantages of working in organizations that are struggling financially is that you're used to operating looking for nickels and dimes. And then when you go to a place that has been more well-off, they don't have to look that hard, you can generally find a lot of change in the seat cushions really quick, because a lot of stuff falls out of people's pockets.
As those organizations were pressured financially in the changing healthcare world, you were able to really help out in some major ways, by finding opportunities to save money and become more efficient, think differently about the way that you train people and you interact with customers.
Bonica:
You were at Muhlenberg through 1997, and then you went to Saratoga Hospital and Nursing Home in New York, as the vice president now for human resources. What did it mean that you took on that title?
Callahan:
Well, the one thing that I was hoping for at Muhlenberg that didn't really happen, it was getting back to that senior management table. I thought that that was the trajectory. It didn't work out the way that I had hoped, so I was interested, when I was looking to pivot and find a couple of new opportunities, it was important for me to get a job back at the senior management level.
With 10 years of experience and some nice accomplishments on your resume that I was really helped with greatly by a friend of mine who was an outplacement councilor, my resume looked pretty good. And he taught me how to sell myself better than I was doing it before.
You look for those cultural fits that are going to work well for you. Saratoga was one of them, so back on the senior management team in an organization that was coming out of fiscal challenges, so I could see a little bit of light on the horizon for them in the way that their operating PNL and balance sheet were looking.
There was a lot of upside in going to Saratoga. Again, it may have been human resources at that time, but it was still pretty personnely.
Bonica:
So your early career was a lot of kind of making that movement from the old personnel shop to an HR service, an HR department.
Callahan:
They had had a relatively new CEO come in. And I think that he was recognizing that as well, so he was looking for a vice president. And he took me under his wing a little bit and helped me develop, pushed me in terms of my thinking, which was aggravating at the time. Why didn't he just accept what I said and let it be that way? So you're asking him all of these questions.
I came to appreciate it later on, and recognize that that was his job, was to push, and push, and push, so that performance and improvement would go up, both personally with me, as well as with the organization. That was an interesting life lesson to learn from him.
Bonica:
You made a jump in 2004 to vice president for HR for the patient care division of Northeast Health. What was Northeast Health?
Callahan:
Northeast Health was an interesting company, not for profit. Had two hospitals, one in Albany, New York. It was small, the smallest of the three hospitals in Albany. And then Samaritan Hospital in Troy, New York. They also had a number of nursing homes, a home care agency, and they started an assisted living facility adult, over 55 community, while I was there.
It was interesting, because at the time, most hospitals were buying nursing homes, but it was a hospital centric world. This is actually a bunch of nursing homes who kind of blocked the hospitals, so really odd they got very excited there about tele-home medicine, in visiting nurse MAU. And I was like, "Yeah, well we got this really cool CT, or MRI that we just bought." And they were like, "Yeah, that's good. But look at this tele-home medicine. That's really neat." So it was a very interesting experience.
They brought me in as a vice president for human resources just for the two hospitals, and the two hospitals were also just beginning to put their toe in the water of physician and climb up. It was a very new concept at that time.
It was an interesting position to be kind of the HR ambassador for the hospitals with this system, and I think the hospitals felt that it was nursing home centric, so I think some of my job was to bring more resources, focus and attention of the HR system team back on to the hospitals. It was an interesting mission.
Sometimes I tended to do more and better work in helping the system level team, than really bringing it back into the hospitals themselves. Probably not a great fit. I was there for a couple of years and recognized that wasn't that good of fit. They really did not have the job I think well-defined and it's tough to ... deliberately, you really don't know what the goal is.
Bonica:
Yeah, okay. So you did move on to Saint Joseph Healthcare Services in Rhode Island, so it brings you in New England for the first time.
Callahan:
It does. Providence was a nice place. It was time to move on from Northeast Health. I had a former colleague from Saratoga who had become the vice president for nursing there and she was a strong proponent, advocate of me going to Providence at Saint Jo's.
Another very different organization. Two hospital system, the chairman of the board was the bishop of Providence. And they kind of been old school board from the Catholic intelligentsia in the Diocese of Providence and some very long term supporters of that organization. A heath systems that was in change, used to have a 350-bed hospital in South Providence. The neighborhood changed, the pyramids changed, and by the time I got there, they weren't running any acute care patient operations out of that building.
It was a behavioral health, and it was long term rehab and they had an urgent care facility that they ran out of what used to be the emergency room. But here is this 350-bed, 11 story building, in South Providence, that we were maybe utilizing 25% of the space.
Bonica:
Oh, wow.
Callahan:
And then the-
Bonica:
That's not a good business plan, right?
Callahan:
It's not really good, especially when the building was built in probably late '40s, '50s and '60s and there was asbestos all thought it, so the cost to take it down, would cost more that the value of the land that it was on. So again, not a good business model.
Had two unions when I got there. One nursing union at each hospital, separate locals, so it wasn't the same people that I was dealing with at both hospitals. This was the first time that I had union experience. That was an eye opener to me, the-
Bonica:
HR plays a big role in these unions, right? Typically?
Callahan:
Yeah, they're really centralized in the negotiation process of contracts, but also much more in the day to day interchange between union members and their department directors, around discipline, changes in schedules, changes in policies.
We went through some layoffs at Saith Jo's as well. And they dictate the contract, dictates the rules on who goes first. And it's last in first out. Doesn't matter what the performance level is, doesn't matter really what the skill set is.
Bonica:
Well, that's a problem if you're trying to reshape the organization.
Callahan:
Yeah. I mean, it's musical chairs. If you want to do a reduction in one area, you can do that but you're going to figure out who has the lowest seniority in the entire bargaining unit, and they get to go first and then you're going to move all of the other people around into different chairs.
It really hampers your ability at a time of great change, to make change rapidly in order to achieve business goals. So, quite challenging in a business environment there.
Bonica:
You didn't stay there all that long.
Callahan:
No.
Bonica:
About two years, I think.
Callahan:
It wasn't a year.
Bonica:
It wasn't even a year?
Callahan:
It was 11 months.
Bonica:
Oh my. Okay. And at that point you actually come to Exeter Health Resources, in 2007. So what drove that relatively rapid-
Callahan:
Well, I had a phone call from the CEO Tuesday afternoon. I had been there for about five months. And when you interviewed at places at that time and subsequently, there were two questions that you wanted to make sure that you asked, which was, "Are you planning any mergers?" And I was assured, "No, we've been talking to the hospital down the street for 10 years, but that's not really going to go anywhere and nothing's really is going on now." Okay, check that box. And then, because ... it's like you don't go to an organization, you go to people, not the bricks and mortar, you ask the questions, "Well, John, you've been here for 20 years. What are your plans? How long are you hanging around for? Because I got a long time to work still, so I want to make sure that you're going to be in place." "I've been here for 20 years, I'll probably retire from here."
So on Tuesday afternoon at about two o'clock, I got a phone call from the CEO and he says, "Can I come down to your office?" That is not a good phone call to get. So he comes down, he says, "I just want to let you know, I'm taking another job." "Okay, congratulations John." "And we're looking to merge with Roger Williams Hospital down the street." "Good. Thanks very much." I've been here for five months, and I'm commuting from Providence to Saratoga Springs, I had moved my family.
So the next call was to my wife. And I say, "Stop packing, because we ain't moving." The uncertainty level was just too high. So, that's when I started to look and I was really fortunate to find the opportunity at Exeter.
Bonica:
So how did that come about?
Callahan:
It was a transition time for HR at Exeter. They had an opening after a long tenure HR exec and had left. When you look for jobs, there are certain key individuals that you build relationships with, and you pick up the phone and you work the bone, and you send out your resume and you keep an eye on the job postings with key for associates as a headhunting firm, that I've done business with on both the recruiting side and I've used them, work with them to help me find other opportunities.
And I got in touch with them and they said, "I think this would be a good match. Why don't you go up and talk to the folks up there?" It was a good match. I get along incredibly well with my CEO who I know, you know, and I've heard-
Bonica:
We've had him on-
Callahan:
[crosstalk 00:47:58] podcast. Kevin Callahan is his name and we're not related.
Bonica:
No relation, right?
Callahan:
No relation. Although you can-
Bonica:
I did ask that question when I first heard your last name. I'm like, "Is this like his cousin or something?
Callahan:
His brother?
But actually my wife said, "What's your boss's name?" when I was interviewing. I said, "Kevin Callahan." And she's, "You don't have a shot at that job. That would be way too confusing."
Bonica:
And yet here you are.
Callahan:
Nine years later.
Bonica:
Nine years later.
Callahan:
Nine years later.
Bonica:
Let's talk a little bit about Exeter Health Resources as an organization, before we talk specifically about your department and your responsibility. Exeter, in brief, what are the ... I've had Kevin Callahan on, he's already said all this stuff, but in case somebody hasn't listened to his interview, give us a brief run down of what is Exeter Health Resources.
Callahan:
100-bed hospital, about 117 years in business. A physician employment company that started 20 years ago, has now grown to 600 employees. The hospital has about 1,500 employees. We have a visiting nurse group that is up to about 150 employees.
Over the last five years we have gotten out of two lines of business. One was a for-profit fitness facility called Synergy. Had about 100 employees, so we went through closing that business and the people aspects of that.
We also closed a provider of service called Exeter Healthcare, which used to be a short term rehabilitation hospital, and a ventilator depended care unit. The ventilator depended unit had about 10 patients in it, and they were long term ventilator patients. I think the longest patient that we had as a resident there, and they referred to them as residents, was 10 years.
Bonica:
Wow. That's a long time on a ventilator.
Callahan:
It's a very long time to be on a ventilator.
The people that did that work, again, were just exceptional, exceptional people. And we had a short term rehabilitation unit, which was 14, or 15 beds. And both of those businesses really became unprofitable, to the point that the rest of the organization couldn't subsidize them anymore.
Bonica:
Does your office provide the HR support to the entire organization? Or are there separate HR entities for the other organizations?
Callahan:
We provide centralized HR for the entire organization. I do have some HR business partners that will cross companies and they'll principally support the visiting nurse group. Those are 115 employees, they need to understand that business. I have a couple of HR partners who do cross companies. So some of the VNA, they need to have a couple of departments at the hospital, some people support primary care at Core Physicians and also there's some other support departments.
I have one partner that supports the in-patient hospital procedural units, so the operating rooms, endoscopy, and she also support the out-patient practices at Core that are doing that type of medicine.
Bonica:
[crosstalk 00:51:35] What's the total population support have been about?
Callahan:
We have 2,400 employees all over those companies.
Bonica:
And is that the primary driver of your workload? Is there a headcount?
Callahan:
Yeah, primarily it's headcount. We also deal with contractors and tracking contractors that come into our organization as well. I also have responsibility for the volunteer program at the hospital. We have about 120 volunteers that come in and help us in various ways.
Bonica:
How does the HR department organized? Who reports to you?
Callahan:
Okay. I have a person that does compensation and benefits, Sue Callahan. No relationship to me, or to Kevin. Way too many Callahans there.
I have a gentleman who runs both recruitment, as well as payroll and HRIS. His name is Charlie Thomas.
Bonica:
Not Callahan.
Callahan:
Not Callahan. I have a person that supports our internal communication and our intranet, Lisa [Caracosto 00:52:50]. That's in interesting segment a function that most people associate it with marketing and communications.
We have one person that is dedicated to taking those messages that we need to get out and focusing them on the employees. Through the internet, through a by-weekly internal newsletter, how do we craft different messages that go out to our various constituencies at any one time. That is a little bit unique to our setup.
I have an organizational development person, Sue DeMarco, who has also gone out and developed an expertise in coaching, so she's certified as a coach and it's actually proved very, very beneficial for us.
Bonica:
What kind of coaching? What do you mean by coaching? Because I'm assuming she doesn't have a whistle and gym shorts.
Callahan:
A whip, a gun, and a chair sometimes.
She will come in to do executive coaching with leadership. She'll come in, she'll chat with you, she'll do a 360 kind of performance evaluation on you. You invite other people to give comments on your leadership style, it's anonymous. She shares those results with you and then works with you to develop a plan to fine tune management skills, to change communication skills, in order to improve executive performance. It's mostly ... we do it in the department at director level.
It really is management coaching, how do you be a better leader. And it's proven to be quite effective. Coaching is a new thing that's going on, and she had the foresight sector go out a couple of years ago and say, "I really would like to do this. I think that it could be a value to us." And she's run a number of coaching management development programs that were very specific and are much more applicable now as physicians on moving into leadership roles within healthcare organizations.
There's a need for a physician executive skill development. They're really, really good at the medicine part, but they don't teach you how to lead teams in medical school. She's doing a lot of work with physicians right now.
Bonica:
Interesting. Other sections? You said comp and benefits, recruiting, internal communication, organizational development.
Callahan:
I have a team of HR business partners that will go out and support department directors and their vice presidents in their line of business with HR staff.
Everything from onboarding, to doing some paperwork, to make sure that the cost get in the right place, to disciplinary and coaching matters that they have with their staff.
One of the initiatives that Sue is actually working on, Sue DeMarco, is to how to train up our HR partners in coaching techniques. So I can take one person now and defuse that knowledge to four or five other folks that do this in their daily practice anyway, but it may give them some new skills, some new thought processes, some new approaches.
Bonica:
These folks are generalists? They're generalists?
Callahan:
They're generalists, but they're not doing recruiting. So the typical HR generalist is recruiting, benefits, employee-
Bonica:
They do everything.
Callahan:
They do everything. These folks we have tighten up their scope, so that there're really employee relations and some tactical management development, and a little bit of succession in planning, a little bit of helping managers move people into the right place. Sometimes the right place is not in our organization anymore. But holding and helping those managers to achieve a level of accountability that they may not otherwise achieve.
Bonica:
So they help them do, maybe evaluations and [crosstalk 00:57:37]
Callahan:
Thoughts on evaluations, we try to line up our systems so that if you have some disciplinary action in an employee during the course of a year, that that is actually reflected on their performance evaluation. And sometimes managers don't do that. Well, that was in the early part of the year. They're much better today.
We're evaluating people for the body of work during this calendar period, so if they did it this year, it needs to be reflected. And to get them to document that, because the complexity of the legal process when you're looking to take disciplinary action or end someone's employment, really relies on a lot of documentation. You can then bring these notes to prove that you made a good faith effort to get them to improve their performance, besides the fact that it's the right thing to do to communicate clearly and effectively to employees just where they stand.
Bonica:
Can you talk a little bit about what makes an effective evaluation system? You must have seen a number of them over the course of your career.
Callahan:
Yeah. I think that an evaluation system is effective if it supports the mission vision of values of the organization.
One of the things that we've done at Exeter a number of years back, is move away from a performance evaluation system that was solely based on the duties and responsibilities in your job description, because healthcare has changed and is now a team sport. It's not an individual sport, so the way that you interact with patients, the way that you interact with your co-workers, the way you're supportive of our values as an organization.
Compassion, flexibility and initiative, creativity and optimism, efficiency in your work, are some of the values that we have. You can be really, really good at the task, but really not so good at being creative and optimistic and flexible. And those are the aspects of employees that, in these days in times with the amount of change that's going on in healthcare, you really need people that live up to those values almost moreso than being very technically competent, but poison to the team.
I'm a Yankee fan, so I can use the, "How long are you going to let Manny be Manny Rodriguez from the Red Sox?" You can hit home runs, but he was just poison in the clubhouse. The Red Sox eventually sent him off, to ... I think they sent him to Los Angeles, where he wound up crashing and burning relatively quickly.
This is how do teams work better, and that's one of the things that we're finding. And I think that we have improved the organizational performance, because we have aligned what success looks like much more with our mission vision and values than we did just looking at tasks on a job description.
Bonica:
Interesting. Can you talk a little bit about what does your compensation and benefits division do?
Callahan:
Comp looks at a number of different salary surveys. We're continuously looking at what the market is doing, so every job in the organization gets an evaluation of where their market position is every year. It's a lot of work.
And our comp philosophy is to pay at market averages. That means that some people are going to pay a bit higher than we will, and some people will pay a bit lower than we will. But we want to be competitive in the labor market.
Really both, with compensation and then in their role and in benefits, to also take a look to what benefit packages are available in the market, and develop a total compensation program, both comp and benefits, that is attractive, that seeks to reward good performance, and hopefully that, in combination with a culture and a good working environment that the department directors are providing, our employees don't think about going someplace else, so they're retiring one day.
I think that we're more successful than the rest of the market at doing that.
Bonica:
Why is that?
Callahan:
Because they think the balance of all three of those things, comp, benefits and working environment, has created a good place for people to work. I know that I am under the statewide average for employee turnover by 3 percentage points. So it's a pretty statistically ... I don't know if it's statistically significant. 3 percentage points on 2,400 employees is a lot more people who we'd have to be recruiting for if they left. If you can keep people, it just improves the working environment, and that continually training, and re-training people, the cohesiveness of the work team, is much better.
Comp and benefits really is ... their goal is to make sure that we're market competitive, but also recognize that we have a fiduciary responsibility to the organization, and to make sure that we're not spending scarce resources in areas that we don't need to, because there's always more resources needed, than we have money to spend on them.
That's their balancing work, is to get that right. I want them to cover the bottom two, or three runs of [inaudible 01:03:47] those hierarchy of needs pretty well, and then turn the love needs and self-actualization needs over to the managers that they're working with.
Bonica:
I could get used to that.
You mentioned recruiting and having to get people. What is it like to try to find people to fill your jobs? And you have a pretty wide range of jobs that you have to fill.
Callahan:
We do. Yeah. I mean it's everything from food service and housekeeping jobs, to orthopedic surgeons, radiation therapists, nurses. We have a lot of different job descriptions that are out there that we're tying to cover.
It is challenging. The demographics of the employment marketing in the seacoast are changing. The first thing is the employment is probably at or near historic lows. Hew Hampshire's unemployment rate is 3% right now. The national unemployment rate is 5% and I've heard, I haven't nailed it down, but I've heard people say that the unemployment rate on the seacoast is about 1.6%. That candidate pool is not very deep and I want to be diving into that.
And the other part of the demographic is that Southern New Hampshire especially is getting older, so the in-migration from Northern Massachusets has pretty much stopped. That was the New Hampshire advantage for the last 20 years. And the people that are moving in, are moving in to 55 and older communities. They are not candidates for the positions that I have open, or they're not candidates for long term employment with us, is they're interested in working.
It has put a lot of pressure on recruitment and kind of up the line to me, to figure out what the training streams are of younger people coming out of school, or to sponsor training programs, from which we can get employees either right out of training, or ... Actually we're doing a model now with Great Bay Community College, where we're hiring people and paying them to go to a 12 week medical assistant training course that in cooperation with the Great Bay Community College we designed. It was an associates degree full two year program. We got them to do it in 12 weeks, Monday to Friday, nine to five, eight weeks in a classroom, four weeks in a physician's office doing clinical rotations. And we pay them to go to school.
Little bit expensive to do it that way, but there was no other market out there that I could recruit from. And Core Physicians is expanding tremendously in the model of care and their physician's office is changing, so we need well-qualified, well-trained medical assistants.
We've been running the program with Great Bay for about two years, and we have 35 graduates of that program, and I think 33 of them are still with us, in a time when medical assistant turnover and the state is running at 20%.
Bonica:
That's pretty good keep then.
Callahan:
Yeah, that's a good keep.
We're going to have to get into doing things differently than we have in the past, beyond just putting an ad in the Sunday paper and seeing what paper applications come in the mail by Tuesday. We're looking to use social media, we're looking to use LinkedIn, we're on all of the job boards. You can't get a paper application at Exeter anymore. It's all online
Bonica:
Right. I wanted to ask you a couple questions about your talent management. I guess that would fit into the organizational development side of things. How does Exeter develop leaders, people who are going to step into supervisor, management and upper management roles?
Callahan:
We have a new manager program and we just kicked it off yesterday. We invite new managers who we've recruited to the organization, to come into a nine session program, where we teach them mission and vision values, we teach them what is important to us from a leadership perspective, what we expect of them. We teach them about human resources rules and regs and philosophy. We teach them customer service training skills, then we're goin to be teaching and have taught their staff, so that they're all on the same page with that.
We teach them about the development of lean thinking in the Toyota Production System, which we're heavily invested in. So how do we get them to engage their employees in helping the employees improve their work processes. How do we make sure that they're creating an environment of psychological safety, so people can raise their hand and say to a nurse, or a manager, or a physician, "Hold on just a second. I don't think this is the right thing to do. Let's take a timeout and let's think about what we're doing before we make a mistake."
We're a hierarchical organization, much like the military, and we have taken some concepts from military aviation and from the aviation industry and developed, and actually used a program from the Federal Government called Team Steps, that teaches people how to communicate the way that pilots do in a cockpit, so that there is clear communication, so that no one is afraid to provide mutual support, and to keep other people out of trouble.
We teach that. That is going to be probably the next training initiative that we have as a development of psychological safety with all of our team members, because we know retaliation is a big deal in the workplace now. People don't want to raise questions or problems because they're afraid of what the retaliation is going to be. And contemporaneous last night, two young women came forward and said Donald Trump did things to them. Why didn't they report that? Because they were afraid of what the retaliation was going to be. It really is a probably more ramped in society than we want to know, to think some of the walls on that have come down, but it's still something to be concerned about.
So that and a number of other things we provide the new managers coming in. And then we also invite existing staff who may have expressed an interest to their leaders if they want to get in on this. It's a big investment of their time, to get this training and understanding. It's great for us, because if they're staff now, they get to go back to the unit and they go, "Now I understand what they're thinking about." What is the context that we're doing this in, how can we get them to accept roles as change managers within their units, before they're ready to step up.
That has been a good program. We've been running that for probably six years, generally twice a year, sometimes three times a year.
Bonica:
Do you have a systematic way of identifying future leaders and identifying talent that could potentially step up?
Callahan:
It's a little more informal than maybe I'd like it to be. We actually had a process a couple of years ago, where we asked department directors to talk to the top performers in their areas, so going back to our performance evaluation process, talk to the top 40%, everybody who is rated as an exceeds expectations. And just ask them, "What are you looking for? What can I do to make you more engaged here? Where do you want to be?" And we found that probably about 50% of the people said, "What you can do for me is leave me alone. I just want to do my job and I want to go home, and I want to play with the kids and the dog," and it's great, we're all good with that.
We had another group that wanted to advance in management. One of the problems that we had is we don't have a lot of leadership positions come open. When you have 20% of your top performers wanting to be the boss one day, and I'm the boss and I'm saying, "Got to tell you, I am not going anywhere for another 10 years," and they go, "So what else can you do for me?" It creates some challenging conversations with the department directors, because what am I supposed to say to them now?
You can train them up, they could go to another organization, but this is a marathon, it's not a sprint. So what would be wrong if, one of your really good people goes away to another organization for a couple of years and then comes back when there's an opening? Now they're now stepping up as a staff member into a leadership role. Now they're transferring when they've had an opportunity to practice their leadership skills. It wasn't with us, but now they can come back as a more developed leader.
Bonica:
Do you see that happening? Do you have a lot of boomerangs? Is there anything that referred to-
Callahan:
We do. We have some people who have come back, who have stepped up. We've had a couple of people come up from internally in our ranks. In fact, our current vice president for acute care services, we actually figured out that she was really ready to make a move up to vice president.
She was a department director before, and our vice president of acute care services at that time, had the top performer chat with her and said, "Where do you want to go?" And she said, "Well, I want to sit in your chair. And I've actually interviewed a couple of places. I haven't gotten the job, but that's where I want to go and I want to go pretty soon." She says, "Oh, well, thanks for letting me know, because I'm looking to leave in about four or five months."
So internally, we developed a high level executive, who had great reliability because she had been at the front lines of leadership for 10 years. So all of a sudden the troops know who the vice president for acute care services is, because they worked with her for 10 years. It was a nice success story. She's done very, very well.
Bonica:
What do you find most challenging as the vice president of human resources for Exeter Health Resources? What's the most challenging part in your job?
Callahan:
It's something that we've dealt with a lot in the last five years, and that's the pace of change. One of the things that I asked these new leaders yesterday, many of whom had been with us for a while, when I ran a session yesterday I said ... change is tough, people don't like change. I said, "How many people have parked in the same parking spot within a spot or two? How many people do that every day when they come to work?" 80% of the hands in the room went up. I said, "Now you understand how difficult it is to change."
And you think about all of the changes that have occurred in medicine, not only in the provision of care and the technology and the improved outcomes we had with our patients, but in the finance end, in the business end, just in the last five years since the Affordable Care Act came into being. And we really required physicians to use computerized electronic medical records. The changes are vast and they are very, very fast as well as being vast.
We as human beings don't deal with change really well, so we had to focus on how do we get our leadership to explain the context in which we're operating as a business in the provision of care, and get them to communicate that down to the front lines of, "So, why can't I park in the same spot that I've been parking at for the last 10 years?" And unless you're good at providing that context, that frontline employee is going to be at sea as to, "Why do I have to change my parking spot? I really don't understand."
That's probably the biggest challenge we've had in the last five years. And I don't see the change slowing down very much. I think back 35 years ago, maybe 40, my dad had his gallbladder out and he was in the hospital for a week, and he has a scar that went from one side of his belly to the next. And he was out of work for a month. And two years ago, I had a gallbladder attack, and I went to our emergency room, and they used a little hand-held ultrasound machine and said, "Yep. You have gallstones," and the surgeon came in and said, "You need to get them out." And I said, "Okay, as long as I'm here." I was in the OR at one o'clock in the afternoon, and I was returning work emails from my smartphone in my hospital bed, at about 6:30 that night. And I was back to work in four days after I had my gallbladder out. But I was doing work my hospital, through the surgeon that took my gallbladder out that night.
It's just incredible when you think at the technological advances that we've made in medicine.
Bonica:
That is amazing. And I think we are going to see a lot more change in very near future. Speaking of change, how do you, as a member of the senior executive team, what's your role in the organization as ... excuse me. What's your role on the team? Working with Kevin Callahan, your CEO, you said early on, you saw HR as kind of being a professional nudge. Do you still see yourself in that role a little bit, or is it something else?
Callahan:
I do. One of-
Bonica:
How often do you get to tell Kevin he doesn't have any clothes on? I kind of want to know about that.
Callahan:
He's normally well-dressed, actually. And sometimes he has that chat with me. It is because he is an extraordinary thinker and he thinks much further ahead than the average CEO that I've worked with, who isn't about meeting the numbers this quarter, but sometimes could get close to that.
Kevin is really thinking four or five years down the road. Sometimes I have a hard time keeping up with where his view of the healthcare system of the future is going to be.
But I get to sometimes play, asking the stupid HR question between how does this initiative line us up to where we want to be three years down the road. So it's a tug between the strategic and the tactical, and what do you want to do and in what sequence you want to do it.
And then we're really good at coming up with plans, and documents, and measures to improve. So how do we hold ourselves accountable? And sometimes you get too focused in on the numbers and you don't take a step back to say, "Well I've achieved this number, but what does that really do from a strategic perspective to move the organization further down the road?"
It's a constant tug back and forth, because I said before, there are many more needs than there are resources available. As a senior leader, you're always trying to figure out what do we have to do now and what can wait. And we've gotten into some ocean of planning, which is all around what are the vital few things that you have to do.
And it's much harder to figure out what you need to take a pass on, than it is to figure out what you want to do. We're constantly saying there's too many things on the list.
Bonica:
I want to just ask you a couple of quick questions about leadership, as we've gone fairly long. A couple of quick questions about leadership. What would you say is your leadership philosophy? Encapsulate it in a few words.
Callahan:
I think at this point in my career and at my level, it really is to empower the people that work for me, to think creatively towards those big picture goals that we have. And to a certain extent get out of their way. I have smart people, they want to contribute, and I could probably come up with all of the answers, but it wouldn't be engaging to them and it's more fun to ask them questions and watch them think through all of the permutations and contentiousness themselves, and help get a good plan.
And, as you get grayer around the temples, you maybe get a little bit wiser, and let those folks at the front lines have a little bit of fun, because they're going to be much more invested if they own the work and own the process than if I were to impose it on them.
Bonica:
How would you say your leadership style has changed over your career?
Callahan:
Early on you're much more tactical, in smaller organizations, in roles that are much closer to the front lines, so you need to be tactical. So you work your way up the ladder, I think that you can be more strategic and do good work through other people as opposed to doing it yourself.
Bonica:
How was that adjustment for you? Because you're a leader of leaders now. At one point you probably were supervising yourself ...
Callahan:
Yeah. It was chief cook and bottle washer when I started out.
Bonica:
What were those steps like, as you first, you were supervising, then you were supervising supervisors. That move from supervising to supervising supervisors it's often a difficult transition.
Callahan:
It's hard to let go, because there are some trust levels, so you need to make sure that you trust the person that's doing the work, but it's a whole lot easier to take an objective look at someone else's work, than it is to take an objective look at your work.
So as I've come into organizations where I had additional resources underneath me, it's really fun to take that role and you will fall into a teacher and a mentor, much more than a doer, which is a lot of fun.
Bonica:
Can you give an example of a leadership lesson you maybe had to learn the hard way?
Callahan:
I talked a little bit before about some of the fit issues in cultures, when I was looking to join another organization. And those fit issues are really tough. I haven figured out how to make perfect knowledge yet, so that I can make great decisions on which teams I wanted to join. Certainly the team I'm on now is a great team, so to some extent I'd rather be lucky than good. But there are some challenges when you get into a situation that you have misread in terms of what you thought the job was, versus what they thought your capabilities were.
It's really work hard at finding out what the real culture is when you're joining an organization. Wander around, sit in waiting rooms, sit in the cafeteria, and have a critical eye. Sometimes you really want to get out of where you are, and you would really like to join any other organization, and you have to just take your time and make sure it's the right fit.
Bonica:
As a director of HR, a vice president of HR, you've had some unique opportunities to see where people fail. Where have you seen leaders fail and what lessons would you take from that?
Callahan:
Where I've seen leaders fail is generally not in their technical competencies. It's in how they interact with other people and other team members. It is the ability to influence others and get them to see things that they can't see right now as opposed to dragging them there kicking and screaming. That really is the difference. The ability to work well with others is really critical in the executive suite.
There's aren't really many executives around anymore that are banging shoes on the table and saying, "You're going to do it my way or the highway." That's where people historically have failed. They have got in front of, or behind key constituencies. Board, medical staff, their peers, the employees that they're leading. And there's a big gap and it just doesn't end well.
Bonica:
Same question, but focused on early careerists. Our program here is, we're training young folks, undergraduates in particular, to go into the healthcare administration field. Where do you see young folks come in into the field have their struggles? Maybe not completely fail, but where do you find them getting taken aside and saying, "Hey, you need to be redirected."
Callahan:
Yeah. Young people coming into leadership positions are placed in a very challenging roles, because sometimes they're leading old people like me, who have been parking in the same parking spot for 35 years. And you're 23 years old and you're going to tell me how to do it? I don't think so.
The adoption of some of the lean philosophy principles about honoring the frontline workforce and empowering them, and engaging them in process improvement, is probably a key skill, because you're not going to get those employees to move from positional authority. Those days are dead.
Bonica:
Back to your three credit lesson on authority and pos-
Callahan:
Oh, absolutely.
Bonica:
Authority and influence.
Callahan:
I think that would be a good style for them to adopt. It's much more a questioning style. "Tell me about," is probably the two best words that they can utter so that they're learning from people. I call it, "Ask me the stupid HR question."
Bonica:
You've had 30 years of experience in healthcare, in human resource management. How is the field of human resource management changed? And specifically how have the changes in healthcare changed and affected the practice of human resource management in the healthcare industry?
Callahan:
I think that the fact that we're much less tactical than we are strategic at the senior levels. I think there is a much deeper appreciation within executives all throughout the organization about the impact of culture, about civility in the workforce, and getting the best out of every team member to improve the delivery of care at all levels. The breaking it down of hierarchies is really important, so allowing housekeepers to raise their hand when they see something wrong on a nursing floor is critical.
But we still have to understand that those housekeepers still probably have a view of the world and their place in it, that is not as important as they think that it is. It's how do we treat each other with dignity and respect, in addition to the fact that it's the right thing to do, but in order to harness the experiences of everybody who comes into your workforce.
I think we have a much better appreciation for that now, certainly than we did back in the day when you just did what the doctor said. As I prepared for this, I just thought back 30 years ago, to some of the things that were quite common place in hospitals that I worked at early on. They just would not fly today, not in a New York minute.
Bonica:
If you had to pick one book that an early careerist healthcare administrator, who's aspired to be a senior leader should read, what would you recommend? One or more than one if you'd like.
Callahan:
I prepared for this question. I had to think about it a little bit. Actually there are two, and we had talked a little bit earlier about a book that was interesting to me that's called Into the Storm: A Study in Command. It's actually a Tom Clancy book, and he wrote it with General Fred Franks. It's a great story of growth and development in the armed forces and the execution of training, right through the development of work planning and execution. It's really quite interesting, and I've actually learned a lot from it.
The second book is a little bit heavy, but it's Team of Rivals by Doris Kearns Goodwin.
Bonica:
I know that one.
Callahan:
Just a fascinating view of Lincoln and his management genius in how he worked to preserve the Union and worked with a team of rivals, people that he was running against for the Republican nomination for the presidency, and got him into his cabinet, and how he held that group together for eight years. Fascinating read. It's awful heavy that one. It's about 700 pages. It's not a [crosstalk 01:32:40]. It's a good book.
Bonica:
That's a good book. It's great, I agree.
Let's close on this. Again, for my students who are getting ready to head out into the healthcare industry, why should they look at a career in human resource management within the healthcare industry? What's particularly rewarding about it you think?
Callahan:
I think that if you're not focused on a clinical career, if you're not one of the STEM people, and I'm not one of the STEM people, so I feel sidled sometimes at the emphasis on science, technology, engineering and math, because I ain't one of those.
Dealing with people and helping them achieve their potential is a lot of fun. Doing it in an industry that is by its nature helpful and healing, brings a joy to the work that you may not get in hotel hospitality, manufacturing, accounting or fiscal services.
They may be a little bit more lucrative, if you catch the right wave, but you have to like what you do at the end of the day and there are a whole lot more good days than there are bad days, especially at Exeter right now.
Bonica:
Great. Thank you so much for taking the time to talk with me today.
Callahan:
It was a pleasure to talk with you and I hope it's a value to your students.
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