soft-leadership competencies for today's healthcare ftnance executives

The role of today's healthcare finance leader is evolving as organizations shift from volume-based to value-based care delivery, assume accountability for the care of patient populations across the continuum, respond to healthcare reform, manage operations in the face of declining payment, and strive to meet demands for high-quality, cost-effective, and customer-oriented service delivery.

Beyond a solid grounding in the fundamentals of financial performance, organizations are seeking finance executives who can pilot an organization along a steady path while making nimble course adjustments in response to the uncertainty and rapid pace of change. In addition to traditional competencies that revolve around technical skills, demand is high for finance executives who are visionary yet adaptable, accountable and performance-oriented, and able to support key decision-making processes.

In other words, organizations are seeking finance leaders with soft leadership traits.

Taking a Closer Look

Ten soft-leadership competencies are critical to the success of today's healthcare finance leaders, who should take the development of these attributes as seriously as they do the development of fundamental technical skills.

A strategic orientation. Leaders who have a clear vision of success and a timetable for achieving that vision are in high demand. Healthcare organizations recognize the need for leaders with a well-constructed plan for overcoming obstacles, implementing action steps, and assuming accountability.

Healthcare finance executives are practiced strategists. They are well-schooled in analyzing underlying financial parameters to forecast trends and make sound recommendations for investments that will support the growth and development of their organizations. In today's environment, they should strive to broaden their frames of reference and think outside the finance box. Strategic acumen and creative thinking will be essential as finance leaders help prepare their organizations for a new healthcare environment in which acute care is deemphasized and primary care and post-acute care sites generate a greater share of business-and in which healthcare delivery increasingly focuses on quality, safety, and customer service.

A more global understanding of the intersections of healthcare delivery and emerging competitive forces also is vital, including benchmarks and other metrics of performance outside of acute care; local and regional market dynamics; and the links between financial performance and results of trends involving clinical improvement, safety standards, and physician and patient satisfaction.

Agility. More and more organizations seek leaders who can adapt to constantly changing conditions. These leaders should be flexible enough to recognize and capitalize on opportunities while remaining true to their vision-and realizing that a changing environment actually can propel that vision forward. For example, as value-based care becomes more prevalent, finance leaders should understand the direct relationship between finance and clinical operations. Leaders who can effectively connect fiscal outcomes with quality initiatives and patient care outcomes will be in a position of strength, influencing the organization on a much broader level and outside the traditional scope of a finance leader.

Being agile means no longer expecting to measure progress toward strategic goals over five- or 10-year periods. Executives should be satisfied with 18- to 24-month planning targets and be prepared to fast-track key projects and assess improvements incrementally.

Finance leaders should adapt their work and leadership styles to adjust to dynamic situations and provide guidance to younger generations of workers. An agile leadership style incorporates subtleties of body language and writing style and tone, and is able to respond to changing priorities with adjustments in workflow, schedules, and processes. For example, as the healthcare workforce becomes more generationally diverse, a finance leader's communication style will need to be flexible. Baby Boomers tend to prefer in-person communications that occur over longer periods, whereas Generation Y employees generally prefer using technology to communicate much more abbreviated messages. Similarly, as finance leaders begin to expand their influence beyond their traditional roles, they should adjust their leadership styles when engaging colleagues with a clinical background.

Courage and passion. Pursuing new ventures in volatile environments usually requires taking risks. Organizations understand this fact and are recruiting leaders with the courage to embrace large goals and to challenge the status quo and conventional thinking. Along with a disciplined approach to risk taking, strong leaders demonstrate a passion for encouraging innovation and bringing about change.

Finance leaders also should seek to instill passion and courage in others by fostering a nurturing environment, in which innovation and thought leadership are balanced with thorough analysis and structured action plans to ensure that risk-taking efforts produce results, channel creativity, and breed confidence. The environment should be characterized by strong teams of individuals who have diverse experiences, ideas, and perspectives but share the same commitment to achieving organizational goals.

Ability to inspire. In the past, finance executives tended to concentrate on "doing the numbers," focusing their energies on accounting practices and profit-and-loss statements. Today, with executive roles evolving to meet a wider array of demands, finance executives are expected to be inspirational leaders who can motivate their teams to take the sorts of calculated risks that move organizations forward.

As a trait, inspirational should not be confused with charismatic. To inspire involves communicating clearly and frequently the value each team member brings to the organization. Finance leaders inspire their teams by holding each member accountable, fostering a sense of community and support, helping team members enhance their skills and progress along their chosen career tracks, and providing honest and constructive feedback.

Ability to be influential. Finance leaders have more of an opportunity than ever to influence the direction of their organizations and guide CEOs, as well as board members and physicians, in making decisions that go far beyond the numbers. Finance leaders provide valuable insight in areas of strategic development, including recommendations on new service lines, joint ventures, and affiliations-for example, by presenting the case for a valuable partnership with a long-term care facility that significantly advances the organization's population health management initiatives and positively affects financial and clinical outcomes. Finance executives exercise their influence by being active and persistent advocates for their vision and the success of their organization. Their actions, conduct, and personality set the tone for their department and the organization, helping them build trust quickly with key internal and external stakeholders to gain support with new initiatives.

Ability to communicate. A key component of soft skills is the ability to embrace and encourage different ways of thinking about financials. Finance executives should listen as well as speak, tailor their message to their audience, and present their ideas with patience and confidence. They should incorporate transparency into their communications by proactively sharing their vision, strategy, and expectations. Transparency builds trust, provides direction, and increases employee performance, engagement, and satisfaction.

Dependabilty. Because of their familiarity with data, finance executives always have been comfortable using analytical tools that ensure the accuracy of decision making. In today's digital age, organizations are seeking finance leaders who can move beyond familiar metrics. A wide range of additional metricssuch as total cost per patient, cost per medical visit, and numerous measurements at the population health level-can be tapped to support the integrity of data, benchmark and leverage success, identify areas in need of improvement, and recognize, reward, and guide top-level performance. Organizations will turn to finance leaders to interpret these new data, provide a credible perspective, make accurate forecasts even during uncertain times, and accurately assess financial risks and rewards.

Drive. Top performers possess resilience, intensity, and determination; they cultivate a positive and energetic atmosphere to overcome resistance and push key initiatives forward. Instead of focusing simply on profitability and the bottom line, healthcare finance leaders should direct their energy and drive toward expanding the scope of business and enhancing the position of their organization in the market. They should be unflagging in their efforts to build support for making quick decisions, marshaling resources and intelligence, and solving problems.

An integrative disposition. Healthcare providers understand that finance leaders fill a centrally important role as the bridge between the clinical and business sides of organizations. As healthcare reform continues to redefine payment structures, physician and hospital alignments, and patient-centered models of care, this role will become more critical.

An in-depth understanding of care management should span multiple delivery sites, including physician practice settings and behavioral, long-term, and home care. A systemwide perspective shapes and drives the adoption of strategies that may not be profitable in the short term, but that produce downstream revenue and financial security over the long term.

A systemwide perspective also fosters technological integration to create a seamless, simple, and straightforward experience for patient, payer, and provider. In addition to advocating for hardware and software platforms, healthcare finance executives should ensure that people, policies, and procedures support the smooth passage of information from the beginning of the healthcare delivery experience (e.g., scheduling and insurance eligibility verification) to the end (e.g., follow-up care and billing).

Engagement. Organizations want healthcare leaders who are involved at every level. Finance executives should connect inside the organization with key staff and physician stakeholders, and externally with consumers-patients, families, communities, purchasers, and suppliers. Solidifying these relationships is vital to ensure that consumers identify with the vision and goals of the organization, and that internal stakeholders unite to achieve that vision.

Developing Soft Skills

Soft skills can be enhanced by networking, participating in a mentoring program, and obtaining formal, informal, and nontraditional education.

Networking. By meeting with people who are in leading finance roles at other healthcare organizations, finance executives can learn how their counterparts are approaching industry challenges, identifying and bolstering weaknesses in their own core leadership competencies, and balancing the need for soft-leadership skills with traditional financial fundamentals.

To gain wider perspectives, healthcare finance executives should network with individuals in other aspects of healthcare delivery, such as heads of operations and physicians. Leaders in industries such as retail, hospitality, and transportation bring strong backgrounds in customer service and will provide valuable insight as health care increases its focus on the patient experience. Social media offer a powerful avenue for networking, as do industry conferences and seminars.

Mentoring. Based on my observations, the healthcare industry has been woefully lacking in the creation of high-quality mentoring programs. Mentoring creates an environment in which current and future leaders can learn how top performers respond to everyday practical issues. Mentoring also gives leaders the chance to serve as a sounding board, provide honest appraisals, and raise future leaders to the next level. Healthcare executives should encourage their organizations and professional associations to support active mentoring programs.

In the absence of a formal program, finance leaders can seek out mentors on their own-either within their organizations or through healthcare associations or social media networks. As is the case with networking opportunities, some leaders even look outside health care.

Education. Increasing numbers of healthcare providers are seeking finance executives who have earned an MBA or added a management dimension to their education by pursuing an MHA. Formal, targeted seminars and workshops also are essential for keeping up with new rules and regulations related to the Affordable Care Act and with other developments in the healthcare industry, such as the implementation of ICD-10.

Outside the classroom, healthcare executives can become better acquainted with day-to-day issues in less familiar care settings by making rounds with finance staff in physician offices or ambulatory practices.

Workshops or seminars conducted by outside industries, including manufacturing and customer service, can offer insights about improving the efficiency, quality, and consumer-orientation of service delivery. Courses on personal-skills development, such as public speaking, can help fill in gaps that may be undermining effective leadership.

A Call to Action

Healthcare professionals recognize the changing nature of executive skills. In a collection of recent B.E. Smith surveys of healthcare executives, 53 percent of respondents rated communication as the most important leadership skill, followed by vision/strategy (39 percent) and agile/adaptable (31 percent).3 A 2013 study sponsored by Bank of America Merrill Lynch and conducted by HealthLeaders Media had similar results, with 84 percent of respondents listing communication as the most important leadership skill for healthcare executives.*5

The demands of today's healthcare environment are creating challenges for organizations and the executives who lead them, but these demands also bring growth potential for both organizations and leaders. Finance executives have the opportunity to cultivate multiple skills that will not only set the course for their organizations, but also help pave the way for leaders who follow. *

AT A GLANCE

* With the healthcare industry changing rapidly, organizations seek finance leaders who have skills that go beyond traditional expertise in revenue and expenses.

* These additional competencies fall under the heading of soft-leadership skills and include the ability to be strategy-oriented, agile, passionate, inspirational, influential, communicative, dependable, driven, integrative, and engaged.

* Networking, participation in a mentoring program, and continuing education provide avenues for finance leaders to develop these sorts of skills.

a. B.E. Smith, "Executive Insight into Industry Trends: Recent Surveys."

b. Executive Insight Report: Top Skills for Top Executives, Bank of America Merrill Lynch and HealthLeaders Media, 2013.

Mark Madden is senior vice president for executive search at B. E. Smith., Lenexa, Kan., and a member of HFMA's Sunflower (Kansas) Chapter ([email protected]).