We recently completed the deployment of an ambitious HR transformation initiative for one of the largest healthcare organizations in the United States.
Ambitious is an understatement. The subject organization, henceforth referred to as “the company,” “the enterprise,” or “the organization,” has well over 100,000 employees across more than 200 hospitals and continuing care locations in 25+ states. Its revenues approach $20 billion. A predominant national health care provider with an amazing legacy and compelling future.
Over a period of three years, we built, implemented, and began optimizing a new HR function based on a unified vision of HR excellence intended to be closely aligned with the organization’s values, mission, and business strategy – from the ‘outside-in’ (more on this later!). Though this work remains ongoing, we have transferred day-to-day accountability to a cohort of newly empowered HR stakeholders and are ready to reflect on what we learned from — and achieved with — the initiative.
Where We Found the Organization
We began our work with the HR function operating well below its potential overall. Significant challenges included:
- Counterproductive variation in HR systems, policies, procedures, and philosophies across business units
- Inadequate use of technology and analytics to proactively enable the business
- Disconnected talent management and organization development practices
- Limited strategic support driven HR capabilities within the organization
- Inconsistent distribution of HR expertise and resources across the enterprise
The organization itself was also misaligned in fundamental ways; operating more like a highly autonomous conglomerate (think Berkshire Hathaway) than a high internally collaborative healthcare provider – given its stated ‘integrated’ corporate strategy. It had grown rapidly through consolidation and hadn’t fully assimilated its acquisitions; one hand didn’t readily know what the other was doing. Growth, profit margins, patient outcomes, and talent engagement all suffered accordingly.
Our Unified HR Vision
The organization’s CHRO tapped us to transform a 1,000+ employee HR function to help shift this trajectory.
To do this, we adapted our unified vision to the organization’s needs. HR is now an outwardly oriented optimizer of business outcomes, not HR-centric activities; and a facilitator for a more nimble enterprise. It asked that HR stakeholders:
- Eliminate non essential support work
- Redesign (non strategic) essential support processes for maximum efficiency at industry-parity on quality and cost
- Perform and resource strategic support work directly impacting “advantage work” above industry parity for maximum leverage, effectiveness, and responsiveness to business needs
- Organize to optimize best-in-class advantage work capabilities — basically, ensure an excellent patient experience while delivering industry-leading health outcomes
A Three-Year Transformation
Then we got to work. The first year, the Build phase, established the structure that would guide it through the transformation and beyond. Among the most important pieces of this structure were three people-centered HR support platforms:
- HR Shared Services (HRSS), the support for HR standardization and self-service (essential and transactional functions)
- Centers of Expertise (COEs), the responsible nodes for five critical strategic HR functions: planning and development, talent acquisition, organization effectiveness, employee and labor relations, and total rewards
- HR Business Partners (HRBPs), the vice president- and director-level colleagues who liaise between COEs and business units and align their respective strategies
The second year was the Implementation phase. It saw us extend the build organization-wide, transition business units and specific HR functions to it, and refine leadership, governance, and service delivery models as needed to ensure a smooth implementation. By the third year, the COE and HRSS structures were fully operational and the HRBPs were freed to pursue maximally effective strategic support work.
We’re proud of what we achieved through this transformation. Even as the enterprise grows into its new unified structure, it’s clear that the new way of doing things is a massive improvement on the old. And we expect the organization’s financial statements and patient outcomes to reflect this in due time.