The Turnaround of Continental Rehabilitation Hospital of San Diego
When Greg Davis took over the CEO position of Continental Rehabilitation Hospital of San Diego, a subsidiary of SunBridge Healthcare Corporation, ironically, he was tasked with the job of rehabilitating a hospital that focused on rehabilitating patients suffering from disabling injuries and illnesses through comprehensive inpatient and outpatient services. On average, Continental’s patients stayed at the hospital for more than 25 days, but Davis would need more than 25 days to turnaround a hospital that had lost money for nearly every year of its 13 years in existence. In addition, the employees had such low morale that Davis was faced with the added challenge of infusing new energy by building on the successes that the staff could achieve, rather than constant focus on what had gone wrong.
When Davis started at Continental in January 2004, he had already been working for the SunBridge Healthcare Corporation Group for 13 years, so he was quite familiar with the company as a whole. Moreover, Davis had overseen well over 100 different facilities. But that didn’t necessarily prepare him for the challenges he discovered when he arrived at Continental. Davis described the environment as “morose and somber” with numerous factions throughout the facility. “It was a culture that had gotten used to failure,” said Davis.
Fast forward three years, Davis had all the quantitative and qualitative results to prove his success. Under his leadership, Continental had logged a successful tri-annual survey (administered by the Joint Commission—an independent not-for-profit that evaluates and accredits nearly 15,000 health care organizations and programs in the United States). Furthermore, Davis had brought Continental’s financial results back to health with profitable numbers every year for three years, as well as lowered employee turnover rates and improved patient satisfaction survey results to the point where Continental now hovers at the top end of performance levels when compared to its peers.
But the path to success did not come easily. In addition to the low morale, Davis also
inherited a blaming culture. “One of the
biggest problems that I inherited was a commonly shared viewpoint that everything that went wrong was a result of external circumstances,” said Davis. “Enough things had gone wrong that a culture of identifying who was at fault developed. Too much energy was spent on finding who or what was to blame and too little on finding solutions.”
The key problem for Continental, according to Davis, was a lack of leadership. “The organization was absolutely floundering in terms of what direction to move strategically,” said Davis. “Any strategy,” according to Davis, “has pluses but it will only work if the organization has a clear understanding of what the core business drivers are. The hospital was floundering because no one knew what the organization’s core strategy was while the leaders were spending their time looking for new services to add on without a clear understanding of what they were trying to do in the end. For example, if you’re going to put together a mall, you have to determine what kind of mall you want to be—a discounter or outlet, or a high-end retail mall. And if you want to be a high-end retail mall, you don’t bring Wal-Mart in.”
By the time Davis arrived at Continental, the hospital was in a downward spiral due to the lack of a core mission: “It all came down to a single problem,” said Davis. “That is, a failure to identify what the core mission was, as well as a subsequent rallying around that mission with appropriate business choices and decisions. The hospital was a rudderless boat in the ocean being thrown around with every wave that would come its way.”
Luckily for Davis, he didn’t need to solve Continental’s problems all at one time and in a sense, he didn’t have to solve all of Continental’s problems alone. Because he had enrolled in the University of San Diego’s Master of Science in Executive Leadership (MSEL) program in August 2004, just seven months after assuming the CEO role, he could use Continental as a laboratory to test ideas that he had learned in class.
“Along the way, I experimented and played with things I was learning in class,” he said. “This started out as a kind of flavor-of-the-month approach, but as I progressed through the program and finished the program, things started to weave together. Now that the program is over, it’s much easier for me to pick up certain aspects of learning and weave them into a cohesive plan.”
And obviously fixing Continental’s financial problems was first on Davis’ list. “There were some fundamental financial things that were being done incorrectly that with a little financial expertise, we were able to have a significant short-term impact,” noted Davis. Moreover, a common strategy and vision was on the top of Davis’ list of things to develop. Davis led the organization to focus on the core business and mission of the hospital of inpatient long-term acute care, rather than just looking for alternative services through partnerships with others.
“One of the things I learned from MSEL was how to get people thinking around a common goal and a common vision,” he said. “Granted, I did this along with the classes at MSEL so it was a bit fragmented, I think, but I felt that this was the biggest overall positive change at Continental. The leaders and managers are engaged and know that they are a ones who have created our successes.”
Davis found that several aspects of MSEL were useful and effective in terms of creating a positive culture where people could rally behind a common strategy and vision. One was the “DISC Profile” evaluation, a personal assessment that all MSEL students had to take in the first course of the program. Davis had his leadership team at Continental go through the process in order to “get people to understand each other better.” According to Davis, the process “really resonated well with Continental’s leadership team and helped people identify their own leadership styles and the leadership styles of others.”
Davis also used lessons from MSEL to improve group dynamics and buttress participation in meetings and training sessions at Continental. “When I started, gaining trust was one of my major challenges,” said Davis. Having several new chief executives swoop in over the past several years had led people to become reticent. Specifically, Davis found MSEL courses, “Optimizing Individual Learning” and “Sustaining Competitive Advantage: The Learning Organization” particularly useful to help him solve such issues. “In both courses, we learned how to facilitate group learning, as well as to understand group situations and group dynamics,” said Davis.
In order to gain trust and improve Continental’s culture, for example, Davis created an environment where during the organization’s monthly meetings, instead of lamenting over the facility’s failures, people would instead share success stories: “The prior meetings were ‘woe is us’ meetings,” he said. “During the first few meetings, our department managers didn’t have anything to share and it was like pulling teeth. To break this negative morale that was eating everyone alive, I started to establish some basic boundaries in terms of identifying acceptable behaviors among professionals, and that did not include public lambasting your co-workers.”
But sharing success stories sounded easier in theory than in practice. Davis thought of an interesting tactic where he would ask his management before meetings to find success stories and then “plant” the stories with individuals during meetings so that he could guarantee positive stories. “Early on, if I planted two stories and got three during a meeting, it seemed like a miracle,” he said. However, things gradually changed and now during the meetings, Davis regularly receives 40 to 50 success stories.
One of the success stories delivered in a recent meeting was the growth of positive patient surveys. At the bottom of Continental’s satisfaction surveys, patients can mention staff members that helped to make their stays more comfortable. In the past, there were rarely positive mentions of staff members. But these days, it is typical for Continental to receive as many 50 staff mentions per month. After three years along a “complex journey,” Davis had successfully begun the turnaround process for Continental and he attributed much of the successes to the MSEL program. “I can definitely see that these objective results would not have been possible if I had not taken the ideas, thoughts, and concepts from the MSEL program and applied them here.”
But Davis knew that his team’s efforts and successes were only the beginning of a much longer process. “Now that I’m finished with the program and ready to move to the next level, I think the organization as a whole is also ready to move to a higher level. MSEL allowed us to get to this point where we have management, leadership, and organizational excellence as goals that we can realistically achieve in two to five years. Whereas three years ago, when I first started, achieving excellence was not the top item on my agenda; rather solving problems and stabilization of the situation were the priority.” As Davis looked out further into the horizon, he identified leadership, service, quality, and financial excellence as long-term goals.
Davis did not simply outline big picture goals, however. To keep his team involved, he implemented an internal strategic planning process that included all of Continental’s department managers where each came up with goals and objectives, along with a complete strategic plan that they and their team would be responsible for achieving.
“I think that getting our leaders engaged, involved, and participating in that process is really what MSEL is all about,” said Davis. “For the future, I want to pull together the whole set of MSEL learning to create a high performance organization. As an MSEL student or alumni, I think that is the ultimate goal—to lead such an organization.”
