It’s not uncommon for healthcare IT leaders to find themselves in a difficult situation when taking on a new role; whether it’s lack of governance, poor customer service, overspending, or a host of other issues.
What’s not so common is for the new CIO to face all of these challenges, and more. But that’s precisely what happened when Chuck Podesta started with Renown Health — a 985-bed network located in Reno, Nev. — in the summer of 2021.
“Typically, when you go to an organization, you have a couple of issues. You don’t have all of them,” he said. “I had all of them. There were issues with policy, procedures, technology — everything.”
Fortunately, Podesta has learned a few things during his 28-year career. During a recent webinar, he described the remarkable turnaround his team marked at Renown, and shared valuable insights that can be applied across all organizations.
“No time” for shiny objects
The situation at Renown, to put it mildly, was bleak. The IT department was spending 7 percent of the total OPEX and had just laid off more than 20 people. Today, the IT spend is at 4 percent, and the organization is looking at a 1.7 percent positive margin for 2023. “We’re probably ahead of schedule,” Podesta said. “It will end up being close to a $150 million turnaround in one year, which is tremendous for an organization of our size.”
However, although Renown’s about-face happened quickly, it required a great deal of reflection and hard work, along with a philosophical shift. And that meant embracing Podesta’s ‘stick-to-the-knitting’ philosophy. “We’re not going to chase shiny, bright objects here,” he said. “If you find what I found, you have no time for that. We had to fix things.”
First, he had to take an honest look at how the organization was operating and where it was falling short. While the organization did have some “pockets of excellence,” including a successful Epic implementation, there were a host of red flags. “We had too many FTEs and too many specialists,” meaning individuals who were assigned to one task. Renown also had several non-project consultants who were still doing maintenance work.
And the list goes on.
Employee engagement scores were among the lowest of all departments — as assessed by an outside firm, and governance was non-existent. “We had no RFP process,” Podesta recalled. “People were just buying software applications.” At one point he counted 728 applications, which amounted to a whopping $28 million in annual maintenance costs. “For a $1.6 billion organization, that’s way too high.”
There were, clearly, a lot of areas that needed to be addressed. And although it can be tempting to just start slashing costs, it’s important to first identify the low-hanging fruit, and to start with areas that don’t impact the staff.
For Renown, it was a no-brainer: application rationalization. Podesta’s team quickly cut the number of apps down to 620, and identified 50 unused applications running on the network (some of which hadn’t been accessed in years). “That was a lot of money saved,” he said, “and it didn’t affect peoples’ jobs.”
Another avenue to consider is attrition. “With 225 FTEs, if someone quits, do you really need to fill that position?” noted Podesta, who urged listeners to look closely at span of control. For example, if a leader has only two or three people under them, they can combine with another group.
But simply cutting positions isn’t the answer. For Podesta, it immediately became clear that eliminating staff wasn’t going to fix the culture. “We had credibility and trust issues. You have to fix those along with reducing the spend,” he said.
Instead, he opted to focus on improving customer service. And the most effective way to do that is by talking to those on the front line, noted Podesta. During his “listening tour,” he learned that individuals felt a lot of frustration toward the IT team, which was referred to as ‘the Department of No’ more than once. And while it’s not pleasant to hear, that type of feedback is extremely valuable, he said. “That’s the real data you can use.”
Building relationships with other leaders is also a critical step during the first few weeks. This should extend beyond the C-suite to include human resources, finance, legal, supply chain, and clinical. “Those folks are going to help you change the organization.”
As a result of some of the conversations he held, Renown was able to develop a new intake process for the project management office that put an end to chasing shiny objects. “We have solid governance now. If it doesn’t have a strong ROI, it’s not going to get approved,” he noted. “There’s a process you need to go through, and by doing that, you’ll have better outcomes.”
These conversations have been critical, according to Podesta, who has made education a key priority, especially when it comes to financial matters. Shortly after his arrival, he began hosting monthly all-hands meetings to communicate the goals that had been established in terms of capital spend. And because it can be a thorny subject, he related it to home finance. That way, “they understand how cuts that are made impact our finances,” said Podesta. “Be honest and transparent and over communicate. They’ll appreciate that.”
What’s just as important, he added, is creating an environment in which people feel comfortable asking questions and voicing concerns. “You have to look at the organization and ask, do they have a sense of security? Can they say what’s on their minds in a professional way? You have to create that sense of security.”
It’s also about making sure people feel a sense of belonging, Podesta emphasized. “They need to know how the work that they do connects to the rest of the organization. Whether it’s the goals of IT or the goals of Renown Health, connecting the dots is really important.” An easy way to do that is by showing the staff the ROI of a project they worked on so that they can see the actual savings. “When you can point to those numbers and say, ‘you were part of getting us this quality score,’ that’s huge.”
Back to basics
The other significant benefit in meeting metrics is that it helps build credibility, which has been a key piece of the puzzle for Renown’s IT team. “We did what we said we were going to do, and we’re still doing it,” Podesta said. “Now we have trust in the organization.”
That trust will continue to prove pivotal as they seek approval for more projects in 2024, which won’t be easy considering the organization is in a fiscally conservative mode. However, because of all the work his team has put forward, it also won’t be impossible. “Now,” he said, “if we say we need something, they know we need it, and our asks will be granted.”
It may sound simplistic, but that’s precisely the point, according to Podesta. At its core, turning around an organization is just as much about people and process than it is technology. It’s taking a hard look not just at where things went wrong, but at what made the organization successful in the first place, and finding a way to bring it back.
“That’s what ‘stick to the knitting is all about,” he said.
To view the archive of this webinar — Anatomy of a Turnaround: How Getting Back to Basics Yielded Transformational Results — please click here.