Tuesday, March 17, 2009

True Leadership


Paul Levy, the transparent blogging CEO at Beth Israel Deaconess Medical Center in Boston, is facing what many hospitals are going through: reduced Medicaid and insurance payments, declining census due to the economy and predicted operating losses of $20 million. His financial team is looking at hard choices that include massive layoffs of valued employees.

So how does he approach this awful situation? He sent letters to all the employees and held town hall meetings at several locations where he layed out the problems clearly and openly. He made suggestions for avoiding layoffs and asked for input. He quickly developed an an electronic suggestion box and website where employees could weigh in and comment on the plans. He asked for help to find ways to minimize or even avoid laying off workers that are working 2 jobs to make ends meet.

He announced : "The senior managers of the hospital have recognized their personal responsibility to help with this problem. The senior vice presidents, vice presidents, and chief operating officer have been asked to take voluntary 5% pay reductions, and I have eliminated all of their bonuses for 2009, a total potential pay reduction of 15% to 25%. I am personally taking a 10% salary reduction and will forgo my bonus opportunity for this year, a total potential pay reduction of 30%."

The response has been nothing short of amazing. Hundreds of employees have entered the chat rooms and agree to voluntarily give up vacation time, bonuses, pay, weekend differentials to help keep their fellow employees working. None of the comments are "edited" by the marketing department (a feat I find amazing!) and open communication is encouraged.

The publicity from this simple act of LEADERSHIP has inspired other business owners to look at the economy and alter how they think of employees. Paul Levy posted this letter he received from another owner on his blog Running a Hospital:


JUST WANTED TO LET YOU KNOW SIR AS A BUSINESS OWNER MYSELF HERE IN FT.LAUDERDALE, FLORIDA. PLEASE LET MR.LEVY KNOW THAT MY HEART AND MY BLESSINGS GO OUT TO HIM AND I THINK THAT HE IS ON THE RIGHT TRACK. I ALSO MAY NEED TO LAY OFF SOME OF MY STAFF BUT AFTER READING HIS STORY I SHALL RECONSIDER. AFTER I READ THIS STORY I HAD A MEETING WITH MY STAFF AND THEY ALL CAME TOGETHER AND ARE ON THE SAME OPINION AS HIS STAFF AND I THINK THAT WE WILL TRY DIFFERENT MEASURES TO TRY TO KEEP ALL OF OUR PEOPLE WORKING. I REALLY THINK THAT THIS NEEDS TO BE ON THE NEWS WORLDWIDE. THE MAN TO ME IS A HERO. THANK YOU FOR YOUR REPORT SIR. IT MADE MY LIFE AND MY EMPLOYEES LIFE A WHOLE LOT HAPPIER TODAY. THANK YOU AGAIN.

VICE PRESIDENT OF EXPERT DIESEL
BOB RUIZ

4 comments:

Anonymous said...

Do they still get to take a vacation but just not get it paid?
He might not have explained that I guess.

jobb said...

I, too think this story should be widely published which will, hopefully) lead other owners/managers to emulate this option to include employees in the management process. Thanks Dr. Toni for the up-beat blog.

KM said...

I used to work for a medical clinic with a variety of specialties and primary care physicians. I was there for almost seven years and it closed giving employees as well as doctors only three days notice. (the owner orginally wanted to give no notice, but hte paper found out)

It was a non practicing doctor who turned into Real Estate bussiness man that decided to handle it that way. There were many really good people that worked there as well as some great doctors.
I wish our situation had been handled the way it was in your post. Paul Levy is a much more human, caring, CEO with integrity then who we had running things which makes a world of differance.

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