CEO Blog: Are You Prepared For A Disaster?
Corporations need a disaster plan 'before' disaster hits
Organizations need to be:
Safeguarded against accidents
Fortified to withstand them
Buoyant to recover
As the fifth anniversary of Hurricane Katrina approaches, it’s impossible to ignore another disaster wreaking havoc in the Gulf Coast region. And while a hurricane and an oil spillare dramatically different events, they’re bound to share one outcome—a devastating impact on the people, communities, and industries surrounding them.
Corporate America has a lesson to learn here—we must act as though people’s lives and livelihoods depend upon our decisions. Because they do. The best defense against disaster, whether natural or man-made, is to take steps now to ensure your organization is safeguarded against accidents, fortified to withstand them, and buoyant enough to recover in their wake.
At Ochsner Health System, we lived this lesson five years ago. When Hurricane Katrina hit, we faced a $70 million operating loss, more than $27 million in property damage, and 4,000 employees who relocated or were displaced. It would have been easy for us to fall victim to the storm. Instead, we tapped into a culture of resilience to not only survive Katrina but ultimately grow from a single hospital in a struggling community to a thriving regional health care system.
Several years before the storm, we saw a significant opportunity to improve the way we ran our organization; while our priority had always been to serve our patients, we needed to start thinking more like a business if we were going to serve them effectively. Through a deep collaborative relationship with GE Healthcare, we focused on three core areas to evolve our culture: leadership, people, and process.
Leadership is the foundation of our success, and without it we would have been lost in the storm. We recognized early on that we needed to invest in our leaders and expose them to a variety of perspectives from other industries and disciplines. Working with GE, we developed a Leadership Institute where experts from Harvard, Northwestern University’s Kellogg School of Management, and other thought-leading organizations developed content and served as instructors; the institute is constantly evolving with courses in subject areas that are relevant to various positions. General Electric helped us sharpen our focus to bring leadership and a culture of accountability to employees at all levels of the organization—ultimately helping to strengthen our operations at the front lines. In the immediate wake of Katrina, this leadership sensibility helped us fight the instinct to hunker down and instead re-engage with our community.
Second, we recognized that we’re only as good as the people who make up our workforce, and it’s not enough to just invest in individuals. Rather, we believe that great ideas are generated when collaboration is highest. We built an operating structure in which teamwork, open discussion, and sharing of best practices are encouraged, regardless of level or function. For example, we make sure that new programs and tools have buy-in from both administrative and medical staff so that both viewpoints are represented and patient needs are better served. As a result, collaboration has become hardwired into our culture–which proved a saving grace when we acquired several troubled hospitals after Katrina and had to integrate and retain new employees at all levels. In 2009 alone, Ochsner’s staff turnover dropped from 20 percent to 13 percent.
At Ochsner, employees begin the process of goal-setting and understanding our operations even before their first day on the job. We have equipped our managers with “Red Carpet Experience” resources that focus on the new hire’s lifelong career with us. The program includes peer interviewing, meetings with organization leaders, group welcomes, and follow-up calls from Human Resources. In addition, all departments have a designated mentor for each new hire whose role is to help the new hire acclimate to Ochsner and develop a career plan. The mentor aids in steps such as introductions to colleagues across the system, training recommendations, and on-the-job learning.
Finally, we have refined and defined our operational process based on three key questions: Where are we headed? What’s the best way to get there? And how’s the journey going so far?
We realized that instead of starting at our present state, we needed to start with the answer. This shift in thinking helped us better define our objectives, strategies, and timelines, and ultimately become more efficient. By building rhythm and rigor into our operations, we were able to exact a $70 million turnaround and achieve both profitability and improved medical outcomes within five years following the storm.
The lesson here is that when disaster hits, it isn’t just your emergency response plan that can save you—it goes far deeper than that. Our focus on leadership, people, and process that began well before the storm has led to an across-the-board improvement in cost, quality, and access that has endured ever since. Today, we’re the largest private health care system in the Gulf Coast Region.
And while we had to learn to “think like a business,” at the heart of every decision we made was the knowledge that our community needed us to survive. And whether your organization is local or global, someone, somewhere depends on your actions.
As a business that faces life-and-death decisions every day, we know that some tragedies can be prevented and some simply cannot. But the steps we took to re-energize our business and prepare for the worst aren’t specific to healthcare—or to hurricanes. In the coming months, as we watch businesses emerge from this latest disaster, I urge all companies to take a close look at their operations, leadership, and staff, and ask themselves how well they would fare if disaster came their way. And I encourage business leaders—not only from the Gulf Coast but also from across the country—to visit Ochsner, see what we’ve achieved, and help us become even better.
Dr. Patrick Quinlan is the CEO of Ochsner Health System. In 2007, he was named the No. 1 most powerful physician executive in the nation by Modern Physician magazine. Ochsner Health System is cited by Reuter Thompson as a Top 100 Hospital in the United States, by HealthGrades as a Top 5% in Patient Successes, and by U.S. News & World Report as a National Top 50 in 7 Specialties.