When it comes to running a 23-hospital health system, Michael Warden believes too many decision-makers can spoil the broth. So when his organization merged with another to form Banner Health, Warden was fully on board with the goal of implementing a centralized governance model. However, he knew that this meant getting separate departments to communicate more effectively, and finding a way to combine budgets. In this interview, he talks about what it was like to walk into a merger, why it’s critical for CIOs to take control of the budget, the system Banner has for evaluating new ideas, how the organization is working to facilitate data exchange with physicians, and his clinical application strategy.
- Providing avenues for good ideas to be evaluated
- What’s the right number of direct reports? “I liked it better with 11”
- How not to get overwhelmed when managing the details
- Huddling up to enhance communication
- Is customer the right word?
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We try to make that determination in advance. If a pilot is successful, are we going to deploy this? Is this going to become a company standard now? Are we going to deploy it widely, or is this going to be limited to one area of the company or one function?
I was encouraged to try a smaller suite of direct reports and it’s working okay. But personally, I liked it better with 11 direct reports. The way I had it compartmentalized, it was easier for me to deal with those 11 folks than it is for me to deal with five, because now I’ve got six people that are a layer away from me that I still stay in pretty close to touch with.
All of my direct reports know that they’re going to see each other once a day, and because of that, we operate as a pretty close team. I always think about it as a football team; they huddle up and they talk for a few seconds before they run a play. That’s what we’re doing here in IT so we can make quick decisions.
We were trying to serve them and they had a choice about who they could get their information technology services from, and I wanted to retain them as our customers. I wanted to fight for their business, and that’s sort of the tone I try to put on the word ‘customer.’
If you call me, I’ll answer the phone. If you knock on my door — it’s rarely closed, but if you knock on my door or if you see me in my office, walk in and talk to me. If you mean that and if people get used to you behaving like that, then they start behaving like that, and then their employees start behaving like that. Pretty soon you’ve got a group that is pretty focused on our customers.
Guerra: You made another great point I wanted you to expand on and I’ve heard this echoed recently by a few CIOs in different ways. You talked about providing an avenue for good ideas to be evaluated and considered and acted upon. I’d like you to expand on that concept a little more. Like I said, I’m hearing a lot about that — as people try to standardize, they don’t want to cut off innovation because a lot of things are coming from the consumer side like iPhones and iPads. Good ideas can come from people who are just using products in their own personal life that should somehow bubble into the organization and be evaluated.
Warden: Yeah, we see that challenge as well. We have several paths to surface ideas. One path is through our capital process. Every year, we go through a capital budgeting process and we separate out as a corporation. We separate out the IT capital from pretty much all the rest of the capital in the corporation, and we give that a fixed percentage of our available capital. The way we handle that is we take ideas from literally anyone across the company and put those on our proposed list of capital and we price things out, and then we have a process that gets a lot of people involved in prioritizing the IT capital for the coming year. It’s a pretty rigorous process that involves a lot of individuals and produces a very interesting prioritized list that is pretty highly regarded. We have very few people go away just bitterly unhappy that their ideas or projects weren’t considered and weren’t prioritized in a fair and equitable way. So that’s one way we do it. And then of course that list is always too long and it’s always that we’re asking for too much money. And somewhere along the line, a line is drawn in that list to say that items above this line are funded and items below aren’t funded. So there is a prioritization there.
Secondly, we have a kind of a clinical steering committee and with that clinical steering committee, you can approach them and propose a new idea or a new project, and if you do, that committee hands it to a subcommittee who thinks about those things and comes back and either recommends a pilot or recommends we don’t do it. But as part of recommending a pilot, it’s always a question of, if the pilot is successful, what do we do then? So we try to make that determination in advance. If a pilot is successful, are we going to deploy this? Is this going to become a company standard now? Are we going to deploy it widely, or is this going to be limited to one area of the company or one function? If the pilot isn’t successful, do we abandon the pilot and close it down entirely or do we allow the pilot hospital to continue to run it? We try to think those things out ahead of time. It’s easier ahead of time than it is after you’re well down the road.
Guerra: You mentioned direct reports. How many direct reports do you have?
Warden: Literally six months ago, I had 11 direct reports; today I have five.
Guerra: Five sounds a bit more manageable, right?
Warden: Well, it sounds more manageable, and as a result of some outside influence, I was encouraged to try a smaller suite of direct reports and it’s working okay. But personally, I liked it better with 11 direct reports. The way I had it compartmentalized, it was easier for me to deal with those 11 folks than it is for me to deal with five, because now I’ve got six people that are a layer away from me that I still stay in pretty close to touch with. So you can look at it either way. I personally thrive on 11 direct reports, but a lot people would like four or five.
Guerra: Very interesting. You had 11 direct reports and you kind of like that. You mentioned that in order to do things the way you want them done, you need to personally sign a lot of things and see a lot of things. One could see in that the possibility of being overwhelmed by details. Is that something you had to stay away from or is that not a problem?
Warden: Our processes here now are pretty well streamlined so that signing and looking at everything usually it’s pretty much in aggregate, so I’m not actually signing individual PC requests very often. Normally they come as a larger group. But let me tell you one other thing that I do. I don’t know if this is of any use to anybody, but I meet with my direct reports every morning at 8:30 for about a half an hour. A lot of people listen to that and think that’s nuts because you’re spending a lot of time. Well if you think about it, with five direct reports or 11 direct reports, I’m still only spending that half an hour with each of my direct reports all at the same time. And during that time, we look at the previous 24 hours’ worth of operational production to see if there were any errors that we should be flagging, anything we should be aware of, anything chronic popping up that we should look into. We negotiate support staffing and budget between the various groups that report to me. We talk about any issues that are coming up with major projects, and so by doing it on a daily basis, it’s pretty fast and pretty efficient because you’re not saving stuff up for a month — it’s all happening in pretty much real time. During that meeting I sign anything that needs to be signed, so I don’t let people send me agreements, contracts, travel requests, or purchase requests. I don’t let them send them to me in the mail. I want them to hand them to me when I can ask them a question so that things don’t back up. So if you bring a piece of paper to me, I’ll look at it. If it’s routine, I sign it and we’re done. If it’s not routine, I might ask you a couple of questions about it or I might ask you a lot of questions about it. And if I don’t sign it, I hand it right back to you and we agree on what we’re going to do instead. It makes those transactions very quick, very efficient and I’m not a bottleneck for all those review processes that I impose on everybody.
Guerra: It reduces your email nightmare that a lot of CIOs deal with.
Warden: It does to some extent, that’s right. And all of my direct reports know that they’re going to see each other once a day, and because of that, we operate as a pretty close team. I always think about it as a football team; they huddle up and they talk for a few seconds before they run a play. That’s what we’re doing here in IT so we can make quick decisions. We can be very flexible and we can maintain the relationship so that nobody can say that they’re not aware of what other people are doing or vice versa.
Guerra: You mentioned that when you talk to people you tell them, ‘I work for you.’ I’ve been speaking with a lot of CIOs about the concept of customer service. Some people are comfortable with the word, and some people play around with it and use different words. I guess the question is what are your thoughts around what an IT shop should be to the organization? Should it be a vendor customer relationship — although that implies some coldness. Sometimes even vendors prefer to use the word ‘partner’ with their customer as opposed to ‘customer,’ but if you’re an IT shop, sometimes you like the word ‘customer.’ So just give us your thoughts around, what is the relationship? What should we call it ideally? Because sometimes the words help create the behavior that you want from your team.
Warden: Yeah, I don’t know a perfect word. I got here to Samaritan — which is now Banner — 14 years ago, and when I got here the IT folks referred to our customers as users, which was pretty common in the day. And I told them I didn’t like that word and I don’t want to use it anymore. The reason I didn’t want to use it is when somebody says the word user to me it has one of two connotations. Either it’s a drug abuser, because we refer to them as users, or it’s a person who has an agenda that they’re trying to take advantage of you. That’s what you refer to users as. I didn’t see our customers as being users and I wanted to refer to them as our customers because I wanted to treat them like customers. By that I meant that we were trying to serve them and they had a choice about who they could get their information technology services from, and I wanted to retain them as our customers. I wanted to fight for their business, and that’s sort of the tone I try to put on the word ‘customer.’ In all the time I’ve been here, I’ve only had one person complain to me that they didn’t like the word ‘customer.’ It was a senior person who was vehement about not liking it and I said, ‘well, tell me what you want me to call you and I’ll call you that, but everybody else I think of as my customers.’
It’s just a word. It’s just trying to convey an idea that we’re trying to provide a service and I want to retain your business. Now partners, we could call people partners and you could call them associates and people call their customers all different things.
Warden: Right, ‘clients’ and all different kind of things. I don’t think it matters so much. ‘User’ is a bad word but all the other words are probably okay, as long as you treat your customers as if they were customers; as if you were running a small business and you were desperate to keep their business and to keep them happy.
Guerra: Now you said in your answer — and maybe we just need to clarify — that they had a choice, but I think what you meant is, let’s treat them as if they had a choice even though they don’t have a choice.
Warden: Yeah, that’s right.
Guerra: Right, okay. I just wanted to clear that up.
Warden: But if we don’t believe that; if we don’t act that way, as if they had a choice, then they’re our slaves, I guess. And they’re certainly not our slaves. But they are our customer to the extent that if they get to be pretty unhappy, they’ll be complaining. If they’re complaining, then something will change — either they’ll be permitted to go outside and buy from a competing organization, or the internal organization will be changed. You and I both know that they’re really not customers — they don’t have a choice on any given transaction to go inside or outside, but the fact is, if you treat them as if they did, you’re going to be better off.
Guerra: The critical thing is to really get your people to believe that, so they don’t act like a typical government agency that we all have to deal with like the DMV or these organizations that you just dread dealing with because they know you have nowhere else to go. That breeds a certain attitude. So you just have to keep working with your people to make sure that doesn’t creep in, correct?
Warden: That’s right, and that takes communication, and it takes listening. I also tell everybody, ‘here’s my phone number.’ If you call me, I’ll answer the phone. If you knock on my door — it’s rarely closed, but if you knock on my door or if you see me in my office, walk in and talk to me. If you mean that and if people get used to you behaving like that, then they start behaving like that, and then their employees start behaving like that. Pretty soon you’ve got a group that is pretty focused on our customers.