Ep. 040 - Build a Championship Team on a Salary Cap: Healthcare Lessons from Sports

0:00So Bridge Builders, we made it to episode 40. In this episode, we're definitely going to be talking about some things that are definitely important, especially when it comes to how to build a team with a limited salary cap, your resources are low, and the importance of mastering the skill set of training. I think it's very important. Those two things. I want to mull over a little bit, but I'm excited to come back in front of you. I think this is three episodes in the same week. I don't remember the last time that we actually did that. So I'm inspired to share and to teach. So welcome back to Bread to Lead.

0:32And we will see you after the intro.

0:52As you all know, this podcast is an amazing podcast. We stay in the top 20, top 15, top 10 rankings in business category all the time on Apple Podcasts. And in all categories, we're always top 50, top 70, between that range that I'm excited and grateful for. And we have an amazing team. But to be honest with you, if you were to look inside my office right now, I don't have a big production team. It's just a camera, a switchboard, my laptop, I mean, my keyboard and my mouse. notes in you know the book and the biggest concept is because i truly treat each pod cast like a pie class and for those of you that are newer to the um to the podcast i just want to say welcome um i am an operations engineer by trade i turn around under performing organizations i me and my team are what you will call tornado chasers um we love to go and solve the most difficult problems, especially when it means bringing people closer.

1:57Being a bridge builder, the reason why I call you a bridge builder, because building a bridge is someone who's intentionally connecting two sides that cannot naturally be connected. Connecting generations, connecting ideologies, connecting philosophies, connecting spiritual beliefs, connecting, again, generations, if I said that before, connecting beliefs. a bridge builder is definitely a new type of way that I want to identify true leaders that actually care about the developing of people while embracing the beauty and the nuance of technology innovation and growth I think that all kind of matter and I'm excited about doing this podcast simply because one I haven't had this much time in a while to just think we've been on the go we operate our organization in seasons and this just happens to be the season of system implementation or installation hospital systems actually getting our technology and our systems and seeing the importance of having a true standard in their sterile processing departments and for those of you that are not from the health care space nor am I I come from private sector so you'll hear a lot of isms and and things that you can pull away for your own personal businesses or your own categories that you are in.

3:19But the concept of Bread to Lead is specifically focused on building a new type of leader, transformational leader that actually sees the playing field of organizational growth for what it is. It's a developing map of all these different spaces that never have an end. And getting to that is very important to me. and I'm very excited that we all are a part of this journey and that you all have decided to be on this journey with us. So for that, I want to say welcome. If you're new, this is season three, episode 40, and we've been doing this season somewhat a bit different. Every episode is built around my newest book, Operational Blindness, and we believe that this is the hidden force that's destroying healthcare.

4:06This operational blind is here and what healthcare leaders can't see and what's costing them. This is actually available now. You can get a copy at bread2lead.com. Fill out a comment and you'll get a link to get access to the book. So today's episode is going to hit different for some of you because we're talking about something every healthcare leader thinks they understand, but almost none of them actually do. We're talking about how to build a team that wins not with unlimited resources not with more FTEs not with budget increases that never come we're talking about building a championship team with constrained resources much like a sports franchise trying to win a title under a salary cap and I really want to get into it because I want you to think about something with me every professional sports league that dominates American culture operates under some form of a salary cap.

5:10The NFL, the NBA, the NHL. And these leagues force teams to build winners within financial constraints. You can't just outspend everyone. You can't just buy a championship. And yet some teams figure it out. year after year certain franchises compete for championships while others with similar payrolls wallow in mediocrity and there's a reason why and it's not because the winning teams have better luck it's because they understand something that losing teams just don't building Building a championship roster isn't about having the most talent. It's about having the right talent in the right positions deployed with a system that maximizes what you have.

6:04Now, here's where this connects with health care. And the reason why I bring up health care, for those of you that don't know, we're in the business of health care. And the beauty of it is that the nuances of the lessons can transfer to any industry. Every hospital, every health system, every department you lead operates under a salary cap. And it's called your budget, your FTE allocation, your labor cost targets. And just like any professional team, you can't just buy your way to success. You have to be intentional. You have to build it. But most health care leaders don't think this way. They've never been taught roster construction.

6:50They've never been taught talent mix optimization. They've never been taught how to win with constraints. So what they do instead, they do what every losing franchise does respectfully. They complain about the cap. They blame resources. They keep asking for more. But if I had just two more techs, if I could just hire one more coordinator, if leadership would approve one more position, this is the staffing request as a strategy and it doesn't work and the truth is if you look up statistically it actually never has and yet it's the default play playbook for many operationally blind leaders everywhere and I want to read to you from the book this section that's called the under supported leader and you'll find this on page 54 so I'm going to go to page 54 in the book operational blindness if you do not have a copy you can go to bread to lead.com and fill out a comment fill out a comment and you'll get a link and there's some free goodies I think that the team has for you on the site um there and it's just so that we can you know keep information with you and keep up on you know who you are and and let you know the kind of stuff that we have going because we do have some phenomenal things going and and maybe in a newer episode I'll talk to you all about the 44 fellowship and how we're giving back to leaders specifically in still processing that want to be developed but doesn't have access to specific resources to get developed we're going to be supporting that and I'll talk about that in later episodes.

8:31So on page 44 we talk about the under supported leader and how it reads is before we go further I want to be clear about something SPD directors are often the most under supported leaders in the hospital And think about what we hand them. Expectations set by OR schedules that they don't control. The surgical schedule is built around surgeons' preferences, room availability, inpatient needs. Nobody asks SPD whether the schedule is feasible given their capacity. Nobody factors instrument processing time into case sequencing. And SPD is expected to support whatever schedule appears regardless of the complexity or timing.

9:13budgets based on volume projections that are almost always wrong. Healthcare volume is unpredictable. Caseload fluctuate. Procedure mixes change. But SPD budgets are set annually based on projections. And when reality diverges from projections, as it always does, SPD is expected to absorb the variance, do more with the same or do the same with less. staffing models designed for predictable work in an unpredictable environment SPD staffing assumes a steady flow of instruments moving through a linear process but the actual work is anything but linear stat requests priority changes emergency add-ons equipment failures staff call-outs every shift is an exercise in managing chaos with resources is planned for order.

10:07Technology that often dates from previous era dressed up with modern interfaces. Many SPD tracking systems are decades old in their core architecture. They were designed for a simpler time with simpler instrumentation and simpler expectations. The interfaces have been updated, but the fundamental capabilities haven't kept pace with the demands of modern surgical services. and metrics that measure activity but ignore outcomes. We've covered this extensively. The measurement system is designed to track what SPD does, not whether what SPD does actually serves the organization needs. And through all of this, zero visibility into downstream impact, no systematic feedback loop connecting SPD operations to OR outcomes, No way to know whether the decisions made today are helping or hurting surgical services.

11:03No basis for learning, improving, or optimizing what matters. Then we put this leader in a room with the CFO, the COO, and the CNO and ask them to explain why things aren't working. What exactly did we expect to happen? The SPD director who gives defensive answers in that meeting isn't being obstinate. They're being rational. They're doing exactly what everyone would do when asked to account for outcomes they can't see using tools they were never given to serve expectations. They weren't consulted on with within a budget that doesn't reflect reality. The problem isn't the director. The problem is the system that sets them up to fail and then holds them accountable for the inevitable failure.

11:52I want to Again that's page 54 to 55 The Undersupported Leader In our newest book Operational Blindness I want to teach on this

12:08Because what I read Was just a setup The context The context To what I just read needs to be explained because before we can talk about building a championship team, we have to understand why most leaders are set up to fail before they even get started in the first place. The knee jerk response to operational struggle is always the same. We need more people. But look at what I just read. The problem isn't the headcount. The problem is that we're asking leaders to hit targets that they can't see with tools they weren't given against timelines they don't control. Adding staff to that situation doesn't fix anything.

12:58It just gives you more people operating blind. In professional sports, teams don't just add players. They build systems first. They create a style of play, a culture, a set of expectations. Then they find players who fit that system and healthcare does it backwards we throw bodies at problems without ever fixing the system those bodies operate in then we're shocked when more bodies don't produce better outcomes and here's the truth you can't hire a broken system you can't outstaff dysfunction you can only mask it temporarily while the costs keep compounding

13:42and I think it's very important for us to actually understand this especially when it comes to system building because when we talk about system building

13:57we have to understand that usually when an organization comes or a leader comes or a coach comes to a team the owner of the team knows that that head coach is probably going to want their own team that understands their system or members on their team this time that they couldn't get last time because that time that person was with another team but now they have the right people that can think creatively but usually there's a game plan there's a natural system there's a natural flow There's a natural ebb that each coach brings to the table. And from there, that coach or that system, that structure knows what type of players they want to actually fit and what players that are really, really, really good and really talented actually don't fit that mode or that space.

14:54And that's what we bring when we talk about we install SturlBuy Design. thoroughbred design is a playbook it is a system it is a it is a way that your organization can operate um you know regardless of who the players are in most organizations they miss that you don't have a a system um that your entire organization operates on and is held accountable to regardless it's kind of like everyone it's just kind of plug and play and um in sports we had when we go play with our buddies at the park, you have what we call 21, which is organized chaos. It's every man for their self for finding one victor.

15:37Or you have open gym where people just kind of come and they do their thing and they float and they feel each other. And you may hope that you have team members that know how to play the ball, the game of basketball. But if you're on a team with people that are just kind of running around, it looks extremely chaotic. And a lot of organizations are actually built that way. And we take a page out of page 81 of our operational blindness book The Premium Labor Trap And in a book in page 81 it actually reads in this book That every hospital CFO knows the premier labor Overtime and agency staff They know the cost They know what's going on I'm going to bring it here and read it.

16:27Every hospital CFO knows that premium labor, overtime and agency staff, temporary workers cost significantly more than regular labor. Everyone knows that. The fully loaded cost of an overtime hour can be 1.5 to two times the regular weight. Agency staff often cost even more, sometimes two to three times where the permanent employee will cost for the same hours. The standard assumption is that premium labor is a temporary measure to handle temporary situations. Volume spikes, staff illness, vacancy gaps during recruiting. You pay the premium to get through the crunch, then return to normal operations at normal cost.

17:16In departments with operational blindness, premium labor isn't temporary, it's structural. and here's how it works SPD budgets are set based on projected volumes and standard productivity assumptions these projections typically assume efficient operations work flowing smoothly through the department resources allocated optimally minimal disruption and rework but reactive operations aren't efficient when when you're constantly firefighting you lose efficiency to context switching, to prioritization changes, to rework when rush jobs don't meet quality standards. The same volume requires more labor hours to process than the budget it assumed.

18:05And then the SPD director operating with a budget built on efficiency assumptions that don't match the reality they face structural gap they can either fail to meet service demands or fill the gap with premium labor they choose premium labor because failing to support the OR isn't just not an option so this is the premium labor trap where the department is structurally understaffed for the inefficiency its reactive mode model is creating and premium labor fills that gap and it's becoming permanent rather than temporary so what does this cost consider an spd that runs 15 percent over budget on labor due to structural premium spending for a department with the two million annual labor budget that's three hundred thousand dollars per year in excess cost in over five years 1.5 million and that's a conservative estimate and i've seen departments running 25 to 30 % over budget on labor year after year with no end in sight.

19:10And the trap is self-reinforcing. The premium spending consumes budget that could have gone to permanent staffing. Without adequate permanent staff, the department remains inefficient. The inefficiency perpetuates the need for premium labor. The cycle continues. The trap goes on and on. I want to teach on this. This is from page 81 82 in the book and then sports teams this is like a team that keeps signing expensive free agents to pass the holes instead of building through the draft they're paying top dollar for short-term solutions while their development of pipeline stays empty every dollar you spend on premium labor to fill gaps created by system dysfunction is a dollar you can't spend on building real capability and championship teams understand positional value hierarchy not every position is created equal not every roster spot creates elite talent or requires it and trying to fill every position with expensive players is actually a losing strategy in the NFL you need an elite talent at quarterback left tackle an edge rusher and a quarterback quarterback you can win with replacement level players at fullback, punter, right guard.

20:30That's no disrespect to those positions. It's recognition that some positions have more impact on winning than others. And healthcare operations honestly works the same exact way. You don't need 10 elite techs. You need two or three anchors in a system that elevates everyone else. But because most departments are blind to actual performance, they treat all positions the same. same pace structures same expectations same rotations and this is like paying your punter the same as your quarterback because everyone on the team matters equally true in a philosophical sense it's terrible when you talk about roster management and the premium labor trap happens because leaders don't understand that their real roster what the real roster needs they keep paying paying premium prices to fill every gap instead of strategically investing in the positions that actually drive outcomes and I and I think it's very um I think it's very important because um when you think about it you have to think about it in terms of what I call the five position framework and every championship team needs five types of contributors one uh position one and the five types of contributors every championship team needs um every team needs one or two anchors these are your elite performers the tech who can handle any trade any surgeon any crisis they set the standard they train every uh they train others by example they can disproportionately load uh carry any load when things get hard um this person right here is very key and here's why it's key you probably already have them but you might not be deploying them correctly most departments treat all techs the same same assignments same rotation same expectations and this is like putting your franchise quarterback in at running back because everyone should be able to do everything and your anchors should be anchoring that means putting them on the most critical work during the most critical shifts that means protecting their time and attention that means compensating them appropriately so they don't leave when you talk about an anchor many organizations actually only have room for maybe one to two anchors you have your manager and then you have the sidekick it's either the assistant manager the supervisor the team lead or that one tech that is just that good you can put them anywhere you can do great in those type of scenarios you have to make sure that you are going to one compensate them correctly you want that person only focusing on your hospital so you have to pay them accordingly But you have to do that from being able to have a development process or development program so that you know how long you typically will have with an anchor.

23:18So usually a championship team, you build around one or two people. You build around that one core person. If you think about a CEO of a company, the team is built around that CEO's capability. um if I if I if I am building a NFL team and my quarterback is very good at running and throwing the ball equally I probably don't have to spend a lot of money on a top tier running back because my quarterback can actually get 60 70 yards themselves a game I just need a running back that can get me 60 70 on their own I don't need a running back that needs a bunch of touches because that creates some type of push and pull I need a running back that can do their job and stays out the way but these are this is kind of how you build your organization you have someone what we call on the offense someone that can handle that and you got someone on the defense someone that can deal with customer support customer service they may be the ones going back and forth talking with the surgeons talking with the OR they can go in they can scrub in they can do whatever they need to do they're just that good but in most organizations you don't have the budget to have more than one maybe two the organizations that have unlimited budget probably got a solid three to five of those but their organization staff is larger okay position two the reliable core below your anchors like who you're building your organization around You need three to five solid, dependable performers.

24:48These aren't superstars. They're professionals. They show up. They execute. They don't cause problems. They won't dazzle you. They won't disappoint you either. This is where most departments actually need to invest, not in adding more bodies, but in developing the bodies they have into reliable core players. This is a training problem, not a hiring problem. And most organizations don't have a development process. Remember, I talked about this. Now, on the top note, let's go back to position one when we're talking about our anchors, our core team, our core people. Now, when it comes to a core person or a core team or your core position players in your organization, any organization, you don't want them to have thinking overload or thinking fatigue.

25:33and this simply means you have that's why you have to have a system that can run and operate with or without them so they can use more of their energy on actually making your organization look great if they always feel like they have to use their energy for heroism or hero ball it's going to be hard for you all to win a championship why because they're always operating from a deficit think of for think for an example if you have a star player that always have to operate the organization from a deficit the team is always losing you never get to actually experience them actually thriving when ahead so when they get in the game where they're actually ahead you see them blow a team out the water so you just have to make sure that you have a system stir by design if you're interested in your health care you want to know more about our system please go to simshealthcare.com and find out more about our stir by design system but in this process we have to understand that when we talk about a system now your team your people that are your top performers they're not going to be processing uh having to come back from and having anxiety from coming back from behind many great players yes they like the they like to climb mount everest right but they don't want to call climb um they don't want small mole hills uh to take the representation of Mountains if you look at a molehill right down on the ground real small and you pretend that you're an ant a molehill looks like a mountain however as a human being I look at the mountain as a mountain and a molehill as a molehill but if I'm a small critter I'm a small animal I may make that happen and your anchors see those small issues every day as small molehills but if they feel like they have to climb Mount Everest for something so simple and so small because you don't have a system that can actually correct the reliable core and the people under that support them you're missing it you're missing it and i understand in an organization everybody wants to be treated the same everybody wants the same pay everyone wants the same thing but if you have anchors that are true outperformers they overdo everything you don't want them to feel like they're a part of everyone else because now them them overperforming means nothing and when they realize that that's when you'll start losing them then under your anchors again you had your reliable core we talked about them um now position three remember we're filling five positions position three is your developmental slots every roster needs space for people who aren't ready yet but are worth developing these are your newer hires this this is your less experienced technician this is people with potential but without polish the the mistake The mistake that most leaders make is expecting developmental players to perform like core players or like your stars.

28:22Then you get frustrated when they don't. That's a leadership failure, not a not a staffing problem. And again, again, it goes back to the same thing. If I have too many development players, I look like the Hornets or the Browns. where we're going to have to spend a lot of years taking losses but getting our guys good but if i have the right mix i can develop my players alongside of my core team and alongside of my anchors and then from that development i'm able to see who can be a new core or who will be a new anchor at some point and also understanding that guess what just like in sports everyone has That's where you want that star player to finish with your team, your hospital.

29:09But the truth is, depending on what happens when they're in free agency and everybody ends up naturally kind of looking into the market every two to four years. That's quite natural. Every two to four years. And we think about a contract and in most sports, unless you are a legacy player and they're banking their bottom dollar on you. most people are in a hospital for about two to four years before they're looking for hey i need a raise i need a promotion i need something two to four two to four two to four so when i know that and i know where my people are i have my anchors then i have my core team then i have my development slots i know who's going to be what and i'm sorry everyone in your organization doesn't have the capability of being a star but everyone has the capability of being a leader in their own right okay position four the specialist some roles require specific expertise that your general staff shouldn't be expected to have maybe it's your or liaison maybe it's your instrumentation expert maybe it's someone who handles a particular service line that requires specialized knowledge and specialists aren't interchangeable with your general staff so stop treating them like they are so if you have a specialist the endo specialist and they're really good at what they do and they really specialize in their thing and all the scopes that's needed in their own point stop trying to mix them in with the other people some of them so i'm sorry y 'all your special teams are special teams you you don't you don't mix a kicker in a punter in with a quarterback you don't do it unless everybody's gone your specialists are not interchangeable you have to treat them that way but when you have a developmental pipeline that allows for your your developmental team to actually pick what route they want to go your core team those are going to be your captains they're probably going to be your managers your supervisor leaders that's going to be i'm sorry not your core your anchors are going to be your supervisor your manager your leader that's going to be that those anchors then you have that core those are going to be like some good star star the starters they support they're pretty good at their job they can do their thing but they're not the stars right but they can handle their weight Then you have your development team.

31:21Those are your newbies coming in that are newer to the industry. Every organization, you have to have new blood coming in or your organization is going to die. Then you also have to have the specialist, the one that can play offense or the one that can only play defense. Dennis Rodman was a specialist. You did not treat Dennis Rodman the same way you treated everyone else, nor did you treat him like a leader or a captain. He was a defense and rebounding specialist. So you kept them there and you judged them based on that. okay and number five position five is your flexibility slot this is where smart teams gain an edge the flexibility slot is someone who can plug into multiple positions at an acceptable level not elite anywhere but functional everywhere in sports we call this the sixth man the utility player the swiss army knife in health care this is the person who covers gaps without creating new problems.

32:11Now, here's the revelation. Most departments don't think about their team this way. They think in terms of FTEs and coverage ratios. They think about bodies per shift. They think about headcount as a number, not as a portfolio. And because they think this way, they keep asking for more staff when what they actually need is better deployment of the staff that they actually have and that is something that is extremely key and I cannot I cannot um um I cannot I cannot I cannot uh skip that I can't I can't I can't allow for you to skip that you have to start really assessing like where your team is and this is why we have in our talent development system we have a special way that we're able to identify who's going to be our stars and who are not we know it's kind of like on the sports team there they know who is capable of being a star and who's not you know you know who has natural talent but they don't have the natural talent that can carry a team can they score the ball sure are they extremely athletic absolutely do they have gifting here do are they analytical oh my gosh you name it can they memorize anything Yes.

33:27But am I going to build my organization around this person? No. Am I going to give this person my resources, our time, invest in going to conferences? Is this the person for us or is it not? And when you start looking at your organization, much like people look at their team, it'll be easier for you to start kind of building what that actually looks like in perpetuity. Okay And Which takes me to Knowing When I'm building a team You got to know when to hold them You got to know when to fold them You got to know when to walk away You got to know when to run Know when to fold them Know when to walk away Know when to run You got to know when to hold them Know when to fold them Know when to rock away know when run you got to know who can you keep building with and who not and on page 143 on operational blindness book when people are actually the problem um on page 143 if you're reading the book go to 143 we're kind of going we're slaying through this thing when it talks about when people are the problem and in the book i state i've argued that the system should be the primary target of transformation but i want to be honest about a more complicated reality.

34:50Sometimes after the system is fixed, some people still can't perform. This is different from blaming people from the system's failure. It's recognizing that even in a well-designed system, not everyone has the capability, motivation, or fit to succeed. And once you've created the conditions for success, you can fairly evaluate whether individuals are actually meeting them the key is your sequence fix the system first create visibility true visibility provide resources build infrastructure train people on new processes give them time to adapt and then only then do you evaluate their performance In my experience, most incumbents rise to the occasion when the system supports them.

35:52The director who seems to be struggling becomes effective when they can finally see their impact. The staff who seems resistant become engaged when they understand why the changes matter.

36:13But not everyone. Not everyone makes the transition. Some people are genuinely mismatched with the requirements of a transformed operation. Some lack skills that can't be developed quickly enough. Some are so burnt out from years of firefighting that they can't embrace a different way of working. And some simply just don't want to change. And when you encounter these situations, when the system has been fixed and someone still can't perform, you can make personnel changes with confidence. You know, the change is necessary because you've ruled out the system as the cause. You can explain the change fairly because you gave the person every opportunity to succeed.

36:59The point isn't the people are never the problem. The point is that you can't know whether people are the problem until you fix the system. lead with the system change and follow with individual evaluation get the sequence right we say people first systems always so we have to in order to put the people first you have to ensure that the system is always intact so that you're properly judging the people if your head coach sucks and their scheme sucks i can't really blame the players if the head coach keeps calling wrong plays

37:33if the o-line team if the o-line is not on the same page as the offensive coordinator o-line coach they're all of these things matter and this is usually when a union is created a union is usually created when staff feel like they're not being fairly judged or assessed based on their ability because of other factors that have nothing to do with them so they union up to protect themselves but the best way to break a union is to provide an environment that is standardized and that is fair for people to grow and rise in but fair does not mean everyone has the same access fair means everyone has the same opportunity to get themselves to the table to be chosen i want to teach on this in sports we call what most do in health care leadership

38:33we call it roster hoarding losing teams hoard players they're afraid they're afraid to let anyone go because they might need them someday so they keep mediocre talent around taking up roster spots and salary that could be used for better fits winning teams build rosters they make hard decisions they move on from players who don't fit the system even if those players have talent they're willing to create short-term gaps to build long-term strength health care leaders are notorious roster hoarders we keep underperformers because firing is hard we retain mediocre managers because we've always had them and we tolerate dysfunction because the devil we know feels safer than the devil that we don't but here's what the book makes clear here's what it makes clear you all and i want and i want you to hear this i want you to hear this loud and clear here's what it makes clear you can't make those personnel decisions with integrity until you fix the system first and too many leaders blame people for system failures and that's cowardice disguised as accountability.

39:48Real accountability means creating the conditions for success, then fairly evaluating who meets them and who doesn't. And building a championship team sometimes means subtracting before you add. It means creating space for the right people by removing the wrong people. But only after you've given everyone a fair chance to succeed in a system designed for success, do you have the opportunity to actually see the talent that you actually have and to be able to grade that. And so within our organizations that we support with our system, the very first thing that we do, we do a system assessment and a people assessment.